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SS1 First Term Financial Accounting Lesson Note – Ethics of Accounting

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WEEK THREE (3)

TOPIC: ETHICS OF ACCOUNTING

CONTENTS:

Ethics

Ethics can be defined as established codes of conduct, modes of behavior, pattern, practice, standard and principles generally accepted or strictly adhered in a given profession or situation.

Accounting Ethics

Is used to refer to generally accepted codes of conduct, standard, practices and principles of accounting to be strictly adhered to by accountants/professionals in accounting profession.

Qualities and Accounting Ethics

Honesty: Honesty means to be truthful. Not only to being truthful but candid and forthright, absence of lie and deception.
Transparency: Transparency means to be open-minded, being straight-forward in dealing with clients without hypocrisy and pretends.
Integrity: An accountant should behave with integrity in all professional, business and financial relationships. Integrity implies not mere honesty but fair dealing and truthfulness. Integrity is an important fundamental element of the accounting profession. Integrity requires accountants to be honest, candid and forthright with a client and financial information.
Accountability: Accountants should acknowledge and accept personal accountability for the ethical quality of their decisions and omissions to themselves, clients, and their companies. Accountability simply means being responsible for any cause of action. Ability to be depended or relied upon.
Fairness: Fairness means just in all dealings. Not to exercise power arbitrarily or use overreaching or indecent means to gain, maintain any advantage nor take undue advantage of another’s ignorance or difficulties. Fairness also means to be open-minded
Objectivity: Objectivity is the state of mind which has regard to all considerations relevant to the task in hand but no other; Objectivity is essential for any professional person exercising professional judgement. It means accountants should not allow bias, conflicts of interest or undue influence of others to override professional or business judgement. It is sometimes described as ‘independence of mind’