About Ethics In Accounting (1a)

In accounting, ethics and integrity standards are based on a broad commitment to honesty, impartiality and objectivity. Ethical standards also require that accountants present information in the clearest and most accurate way possible, with the expectation that the information constitutes an independent report of a business' financial situation.

Integrity is an important fundamental element of the accounting profession. Integrity requires accountants to be honest, candid and forthright with a client’s financial information.

Objectivity and independence are important ethical values in the accounting profession. Accountants must remain free from conflicts of interest and other questionable business relationships when conducting accounting services.

The article discusses the effects of ethics in accounting, including business reputation, personal consequences, criminal activities, and the usefulness of financial statements. Ethics in accounting can impact a company's reputation, as unethical practices can lead to a loss of trust and credibility among stakeholders. Personal consequences can also occur, such as legal or professional repercussions for individuals involved in unethical behavior. Additionally, the article highlights the potential for criminal activities in accounting, such as fraud or embezzlement. Finally, ethics in accounting is important for ensuring the accuracy and reliability of financial statements, which are essential for decision-making and assessing the financial health of a company.

New disclosure standards require companies to institute internal control systems and assess those systems annually. Companies also are required to provide full disclosure of off-balance sheet items in periodic reports. In section 802, the act clearly states the penalties for unethical accountants, which includes fines and imprisonment.

The IMA notes the following ethical standards in managerial accounting: competence, confidentiality, integrity and credibility

Ethics refer to the level of honesty you carry into your job. In principle, ethics are subjective and can vary between individuals with opposing views of right and wrong, which is why codes of ethics are created by certain groups to govern themselves. In accounting, there is only one acceptable position -- complete trust and honesty. Never are accountants more tempted to forgo that ultimate ethical duty as when cash accounts are involved.

The entities discussed in the article that "created the 'Generally Accepted Accounting Principles' that define the ethical practices and principles of accounting that businesses use" are the SEC (Securities and Exchange Commission) and FASB (Financial Accounting Standards Board). The SEC is responsible for overseeing the financial reporting of public companies and has the authority to establish accounting standards. FASB is an independent organization that sets accounting standards for private companies. The AICPA (American Institute of Certified Public Accountants) is not mentioned in the question as being involved in creating GAAP.

The statement is true because the "separation of functions within the department" is a commonly used internal control measure in accounting. This control ensures that different tasks or responsibilities are assigned to different individuals within the department, reducing the risk of errors, fraud, or conflicts of interest. By separating functions, it becomes more difficult for one person to manipulate or misuse accounting information for personal gain. This internal control helps to promote transparency, accuracy, and ethical behavior within the accounting department.

Ethical behavior is a fundamental principle that should be followed in all aspects of business, regardless of the specific function. It involves conducting business in a fair, honest, and responsible manner, considering the impact on stakeholders, and adhering to moral and legal principles. Whether it is in finance, marketing, operations, or any other function, ethical behavior is crucial for maintaining trust, reputation, and long-term success. Therefore, the statement that ethical behavior applies at all times, in any function in business, is true.