Importance of ethics in accounting profession

Importance of ethics in accounting profession.


Ethics in accounting are important because of the nature of the work carried out by accountants and auditors which require high level of ethics and integrity due to the following reasons.

.The financial statements prepared and released to the public are used and required by important stakeholders in the economy to make informed decisions about investment. Shareholders, potential shareholders, managing directors and governments rely on these accounting reports to have the view of the company or the sector and to rate whether it is performing.

The stakeholders rely on the opinions of the accountants who prepared the statements as well as the auditors who verified   it; to present a fair view of the company .therefore the codes are important in ensuring investor confidence in entities.

Knowledge of  Accounting ethic are important to the  accountant and auditors in order   to overcome ethical dilemmas to guide them in making the right choices that besides benefiting the company,  will benefit the public who heavily relies on the accountants’ financial statements and reports. This will help save scandals which have led to bankruptcy and closure of companies.

Professional accounting ethics are key in maintaining and increasing confidence to enhance responsibility and high sense of integrity. Integrity is the quality from which public trust is pegged on and the benchmark against which decisions are tested. Professional ethics enable accountants develop values of reputation, integrity and professional skepticism.

Strong code of ethics and adherence to those ethics, will create certainty about investments, life saving and retirement will be protected and secure. Accountants and auditors must have a strong grounding in ethical and moral reasoning as their regarding financial reporting and recording could have devastating consequences on both individuals and corporations and the entire nation by adversely affecting the capital markets and unprecedented losses to small and large investors.