Requirement: Moral dilemmas in Accounting Employment
Abstract
In today’s digital world and commercial sphere, the profession of accounting must focus on maintaining and provide high levels of accuracy. Accounting professionals thus, who are accountable for generating timely, concise, and accurate financial reports, need to maintain the utmost principles of moral accountability. Regrettably, ethical conduct among accountants is often not guaranteed (Behrman, 1988).
Introduction
According to the International Ethics Standards Board’s (IESBA) recently published new regulations on ethical quandaries, ethics is an essential and integral part of the accounting profession. Professional responsibility is critical in building public trust in financial reporting and business practices. To ensure the dependability, correctness, and credibility of the financial statements, ethics codes have to be implemented. Ethical standards exist to protect the vital principles of accounting and to identify threats to these principles so that decisions can be made to resolve ethical quandaries (Willmott, 1986). During ethical dilemmas, Accountants are challenged to remain professional by putting the welfare of the public and clients before self-interest (Duska et al., 2011). Accountants have ethical obligations to themselves, their clients, their employers, their families, and their profession because their profession requires them to maintain a duty of loyalty relationship with the public. The International Ethics Standards Board (IESBA) addresses potential ethical contradicting risks in the place of work, as well as the guarantees that can be used to rectify them. During moral dilemmas, they are challenged to remain professional by serving the interests of clients and the public ahead of self-interest (Duska et al., 2011). Accountants have ethical obligations to themselves, their clients, their employers, their communities, and their profession because their job allows them to preserve a trustee relationship with the public (Duska et al., 2011). As a result, being just and fair when attempting to deal with ethical quandaries is a form of deontology practice. Nevertheless, when there is proof of conflicting interests, deontologists must contemplate the results of the actions, which relates back to deontological ethics. Lewis and Gilman (2005) define ethics as “conventional behavior that form a pattern and show what is proper and right.”
The core principles of professional ethics for professional accountants in the Code are as follows, according to the IESBA.
Objectivity – not allowing others’ bias, undue influence or conflict of interest to override business or professional judgments.
Confidentiality – to maintain the confidentiality of information obtained through professional and business relationships.
Integrity – to be honest and forthright in all business and professional interactions.
Professional due care and competence– to maintain specialist skills and expertise in the field to safeguard a customer or employer gets qualified expert solutions grounded on legislation, present advancements in practice, and to behave conscientiously in agreement with appropriate practical and expert morals.
Case Study One
Devic Ltd
Case Outline
Devic Ltd is a Timber/Timber Products company formed in 2016 by two founding members.
- Steve Main – an MBA Director.
- Jenniffer Harvey – a former Sales manager at a German Company.
- Accountant
Devic Ltd is a supply of quality Timber/Timber products, responsibly sourced.
You are currently conducting an internal control review when one issue comes to your awareness.
A problem with the Timber suppliers when you look over some delivery notes, you notice that one delivery was canceled and replaced with clearly lower-quality imported timber/timber Products from a local supplier. As a result, customers are now requesting a specific original high quality timber/timber products that they are accustomed to. Devic Ltd appears to be lacking in proper procedures for tracing the source of its timber/timber products imports.
Case Study Two
As an accountant, you notice Jenniffer Harvey has recently updated the list of trusted timber/timber products suppliers. Jenniffer’s niece is the Managing Director of a large Taiwanese exporter of timber/timber products, so she is able to obtain lower prices for certain low quality timber/timber products. This is against Devic Ltd policy. Jenniffer disagrees with Devic Ltd’s guidelines.
Solution
Objectivity: Because the new supplier is run by her Niece, the Accountant’s objectivity may be negatively affected.
Professional Behaviour: Jenniffer’s behavior is not professional. It’s okay to break company policy just because she doesn’t agree with it.
Integrity: Honesty is one aspect of integrity. It is critical to determine the true causes of supplier changes.
Considerations
Identify relevant facts:
- There have been latest supplier changes.
- We don’t know what caused the adjustments in the timber supplier.
- We know that the new timber procurement company is run by Janeffer Good’s niece.
Identify Affected Parties:
- The above may have an impact on Devic Ltd’s reputation.
- As a result, the other founder member is also impacted.
- Customers of Devic Ltd are impacted by the suppliers choice.
Possible Course of Action
There may be a quality issue with the timber/timber products that needs to be resolved, as well as a tough dialogue with Jenniffer Harvey about her violation of company policy. This situation could easily escalate into a more formal procedure. The remedy here may well entail going back to the previous supplier. It is impossible to know how the timber was obtained without proper procedures for tracing the source of imports. This means that there may be not only ethical and reputational concerns, but also legal concerns regarding timber/timber products standards. Immediate steps should be taken to determine the scope of the problem and to put in place proper controls to prevent it from happening again. Devic Ltd may also consider issuing a public statement on the subject in order to avoid any unchecked discovery (possibly by a recently sacked Accountant) (Öhman et al., 2006).
Conclusion
The Accountant’s decision to stand firm on the International Ethics Standards Board’s (IESBA) fundamental principles was a rare occurrence. Admittedly, they led him into an ethical problem, which “tarnished” his reputation, according to his senior Jenniffer’s assessments. Nevertheless, consulting Steve Main would result in a long-term solution to the fraudulent practices, increasing investor confidence (Gambling, 1977). To ensure that everything they do is lawful and suitable, all accountants must pursue the ethical code of conduct. Issues such as false reporting and whistleblowing would be detrimental to organizations and accountants. They can, notwithstanding, be resolved through the use of the law and effective communication. An organization can stabilize and adapt to future cases by properly evaluating internal audit (Power, 1997).
