Ethics and morals in every field play an influential role. In accounting, when all the information about a person lies with the accountant, ethics become more critical for professionalism. However, today, there are many cases where codes of conduct are broken for personal gains. Following ethics in an accounting firm provides innumerable benefits along with deep self-satisfaction.
What are Accounting Ethics?
Ethics in accounting is following specific regulations and codes of conduct for the information privacy of a client. The appropriate practice of ethical principles helps build a good work environment within the firm and a positive image for the firm’s clients. It ultimately increases business by safeguarding valuable client data.
Why Follow Ethics in Accounting?
Applying ethics in the accounting field has many benefits. Some of them are-
- Maintains a standard of professionalism- When ethics are engraved in the firm, every member follows them, which gives them a reason to be professional with their work.
- Protection of clients’ data- Accounting firms have all the critical data of their clients about money usage, which they are bound to keep confidential.
- Builds the firm’s reputation- A loyal firm produces loyal clients who further promote their firm by personal feedbacks.
- Creates a trustworthy image of the firm- The client entrusts the firm’s accountants with their crucial information about money. If the data is misplaced or sold, it gives prospective clients and existing clients a wrong message about trusting the firm. But if moral values exist, there will be no such issue to deal with.
- No legal liabilities to worry about- There are no legal obligations to worry about when every person in the firm follows ethical rules. This will warrant that the firm protects its clients and its image over personal greed.
How Can Accounting Ethics be Breached?
Ethical methods are ignored in many cases today as a result of personal interests. Other reasons may be fraudulent activities, manipulating statements for self-preservation or greed, black-mailing, client request, or taking advantage. In scenarios where the firm obliges to follow ethics, but the client doesn’t want to break their image, they should take action or be liable for the breach.
What are the Effects of Ethical Breaching in Accounting?
Violating the codes set by governing bodies can have multiple effects on the conduct of the firm and other associated organizations.
- Lowered Level of Respect: In a firm that does not obey ethics, the employees find the freedom to misuse data and not respect their seniors.
- Support to Fraudulent Acts: Violations of morals can lead to fraudulent activities in the firm. The auditors can manipulate the data to hide their mistakes or illegal information for the clients.
- Firm’s Status: Breaking laws can lead to a bad reputation for the firm. It reduces the trust their clients have in their results, degrading the image of the firm. Even if the firm improves its mistake, its data will hold less weightage due to the absence of trust.
About Hoshi CPA, LLC
We are one of the trustworthy CPA firms in Portland, Oregon. Hoshi CPA, LLC offers expert planning services to business owners, executives, and independent professionals in Tigard, Oregon. Udai Hoshi assists individuals, Japanese-speaking communities, and U.S. business owners with tax planning, tax compliance, tax resolution, and CFO services. You can call us at (503) 388-6580 or drop an email at staff@hoshicpa.com to know more tax-related services offered by HOSHI CPA in Portland, Oregon.
