Ethics and Accounting :: Finance Business Accountant Accountancy

Ethics and AccountingWhats ethics got to do with accounting? Everything opine me,everything. When the word ethics is mentioned, what readily comes to mind is the questionof deciding amidst doing what is in force(p) and doing what is wrong. But doing what isright versus doing what is wrong within what context? The wishful thinker will say that finales of ethics should non be conditional. But it is not as simple as it sounds, forwhat constitutes right to one person, may be wrong to another person. What bridges the gap,guides, and clearly distinguishes the line between right and wrong in political,economic and social systems are traditions, culture, laws and regulations. Even then, whatis wrong may not necessarily be illegal, even though at that place exists a close relationshipbetween the two. These dynamics apply to close to every legal profession, accounting notexempted. This paper examines the issues of ethics in accounting. It also looks at thedifferences and similarities between financial accounting to managerial accounting. entrywayAccording to Marshall et al, (What the numbers mean, 2003)accounting involves identifying, measuring, and communicating economic instruction about anorganization for the purpose of making decisions and informed judgments. Thisdefinition clearly shows that there are stakeholders in the information generated byaccountants. These accept managers, shareholders, care and law enforcement agencies,and the general public. Since these entities rely on the reports generated byaccountants for critical decision making, it is important that the information be reliable,objective, and presented in an easy to understand format. Ignoring or circumventing these valuesrenders the information generated unreliable. It can lead to devastatingconsequences as show by events which led to recent legislation such as the Sarbanes-Oxley subprogramwhich seeks to make top management of organizations accountable for the financialstatement produced by their organizations through the native controls they develop andenhance, and to oversee auditors who hitherto could have patronage interests other thanauditing in the organizations they were responsible for auditing.fiscal versus managerial accountingManagerial accounting refers to the management of company resourceswhile applying management accounting principles in decision making. Oneimportant characteristic of management accounting is that, it is internal to theorganization even though external information such as financial accounting reports willhave some amount of influence.Financial accounting refers to the identification, recording,computation, and reporting of financial information to users who may have a stake in theinformation reported. An important characteristic of this information is that it is pitchtowards users external to the company.A financial accountant generates information for externalconsumption. These products include the income statement, the balance s heet, the statement