Objective 1.03 Understanding Ethics Needed
For Employment In Accounting
Objective 1.03 Understanding Ethics
1
 Ethics is the study of right and
wrong and how people choose
what is morally good and bad.
 Business ethics refers to how
a company uses a code of
conduct, which is designed to
encourage ideal behavior
when making decisions.
Objective 1.03 Understanding Ethics
2
 AICPA – American Institute of
Certified Public Accountants
 IMA – Institute of Management
Accountants
 IIA – Institute of Internal
Auditors
Objective 1.03 Understanding Ethics
3
 Is the action legal?
 Does the action violate company code
of conduct or professional standards?
 Who is affected by this decision &
how?
Objective 1.03 Understanding Ethics
4
 Integrity
 Competence
 Objectivity
 Confidentiality
 Independence
Objective 1.03 Understanding Ethics
5
 Accountants must choose between right and
wrong.
 Accountants are responsible for entering correct
entries.(Accuracy)
 Accountants are responsible for true and correct
financial statements. (Accuracy)
 Integrity is necessary for accountants to build trust
in regards to their professional judgments.
Objective 1.03 Understanding Ethics
6
 Accountants must be:
 Impartial
 Honest
 Free of personal conflicts – “not wanting someone
else to get in trouble”
 Accountants must not be influenced by personal
interests.
 Accountants should behave in a way that does not
suggest inappropriateness.
Objective 1.03 Understanding Ethics
7
 Accountants do not have an interest or profit
financially from the companies they audit. (They
can’t suggest a client do something, “invest in” a
venture that will benefit the accountant in the
long run)
 Accountants must have the public’s confidence in
their professional services.
Objective 1.03 Understanding Ethics
8
 Accountants should be knowledgeable in their
profession.
 Accountants must have the skills necessary to
perform their jobs.
 Accountants must have experience in their field.
 Accountants are expected to keep abreast of current
laws by continuing education classes.
Objective 1.03 Understanding Ethics
9
 Accountants must not share private information
regarding their clients.
 Accountants are expected to protect personal and
private information regarding their clients.
 An accountant should not use information learned for
personal gain.
Objective 1.03 Understanding Ethics
10
Glencoe Accounting 1st Year Course, McGraw-Hill, 2007.
Objective 1.03 Understanding Ethics
11