Ethical Values In Accounting

My major is business administration with concentration in accounting. It makes

me sad to realize that in the last couple years this discipline that has been so

useful and respected has been under pressure and looked down upon, due to

multiple behaviors by big companies that have resorted to accounting fraud in

order to report greater earnings for their own purpose as well as to fool

investors. Prominent companies and CEOs have been authors of such fraud which

has weakened the business industry. Companies like Enron, Tyco, WorldCom and

others have been an example of how high profile unethical behavior has become.

It has been increasingly visible that ethics were overlooked for the sake of

profits. Some will argue that given that the goal of a firm is to maximize

profits for shareholders, ethics should take a backseat to profits; however in

this paper I will try to show that good business ethics in accounting are

increasingly important and that it should be the norm for every firm.

I am a firm believer of strong ethics in accounting because I believe ethics

provide the foundation on which a civilized society can exist. More people will

benefit from transparent accountability. Without strong ethical behavior this

very old discipline will collapse. More than just a concern for firms,

individuals who intend to make a living in this discipline must make efforts to

conduct themselves in a good way, in their quest for wealth fame and knowledge.

Integrity in this case has to come first.

It has often be said that in business it is good to be greedy, because it is

this greed that makes one move on and achieve greater profits. Thus whenever we

instill to many moral codes, we will take away the motivation for individual to

excel, thus making the firm weaker. However I think such belief is extremely

shortsighted; I think people can get motivated even if they have other values

that are much higher than just getting profits. I think people shouldn’t do

everything for profit, especially engaging in unethical behavior. The goal of

firms and the people who work in it should focus on getting owners wealth not

just profit, and wealth requires more than just making money, but also having

trust from the organization, the society and everyone who can be directly or

indirectly affected by the way an accounting firm conducts its business.

It is sad that accounting has suffered from such bad reputation in the last

years, however a bigger question is how can accounting as a profession move out

of such dark times and regain the confidence of every body by going back to its

roots and mission which is to conduct audits and book keeping using moral rules

and correct business practices. The solutions I believe are with government

intervention and high punitive measures against those who break the rules as

well as educational institutions and firms telling future accounts that moral

integrity should come first. The government can only do so much, after all this

is a capitalistic market, thus a greater responsibility lays on individuals

themselves and the supporting institutions. Moral integrity should be rewarded,

as gaining profits has been up to date.

In considering the impact of ethical values on a society, Chuck Colson made the

following observation:(1)

Societies are tragically vulnerable when the men and women who compose them lack

character. A nation or a culture cannot endure for long unless it is under

girded by common values such as valor, public-spiritedness, respect for others

and for the law; it cannot stand unless it is populated by people who will act

on motives superior to their own immediate interest. Keeping the law, respecting

human life and property, loving one's family, fighting to defend national goals,

helping the unfortunate, paying taxes--all these depend on the individual

virtues of courage, loyalty, charity, compassion, civility, and duty.

In 2002, the accounting profession was under attack with the fall of Enron/Andersen

and WorldCom. The government was forced to intervene and help curb such problems

that seemed to widespread.

The government has made efforts in punishing unethical behavior in accounting.

We can see the fate of firms and individuals who have been unethical up to date:

“Jurors on Wednesday convicted one of the former executives from Enron's defunct

broadband unit to be retried after his original case ended in a hung jury last

year.

The verdict came six days after another jury convicted Enron founder Ken Lay and

former Enron CEO Jeff Skilling of fraud, conspiracy and other