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Code of Ethics for Accountants
Brittany Jones
Kaplan University
AC504

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Introduction
A clear distinction between personal and professional ethics exists. Although each
individual believes in some form of ethics, varying perspectives are individually held. In order
for advancement in one’s personal career it becomes essential to first discover the ethics and
morals he/she maintains in life. Once a person is able to sustain the principles of ethics in his/her
personal life the individual is then able to uphold the same ethics in his/her professional life. The
following will discuss ethical standards and codes which are the building block of the accounting
standards and will investigate the influence of further development and advancement of the
ethical standards and codes on a professional practice in the field of accounting. Lastly, the
importance of professional ethical standards and codes will be examined in the field of
accounting. Therefore, what exactly are ethical standards and codes?
Ethical Standards and codes
A dictionary defined “ethical standards” as principles that when followed, promote values
such as trust, good behavior, fairness, and or kindness. There is not one consistent set of
standards that all companies follow, but each company has the right to develop those standards
that are meaningful for their organization. Ethical standards are not always easily enforceable, as
they are frequently vaguely defined and somewhat open to interpretation. Others can be more
specific, such as “Do not share the customer’s private information with anyone outside the
company. This same business term dictionary defined “Code of Ethics” as a written set of
guidelines issued by an organization to its worker and management to help them conduct their
actions in accordance with its primary value and ethical standards.
Accountants Professional Ethics

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With the recent mega bankruptcies of Enron, WorldCom, there have never been a more
appropriate time to focus is the ethics of individuals and professionals in business. The Financial
Executives International business group (FEI) uses phrases such as:
Act with honesty and integrity
Avoid conflicts of interest in personal and professional relationships
Provide information that is accurate, complete, objective, and timely
Comply with the rules and regulations of federal, state and government (Eber, 2010,
Paragraph 1).
A professional accountant is required to comply with the following fundamental principles in
the code of ethics:
Integrity - A professional accountant should be honest and straightforward in
professional and business relationships
Objectively – A professional accountant should not allow bias, conflict of interest or
undue influence of others to override professional or business judgments
Due Care – Continuing duty to maintain professional knowledge and skills to ensure
receipt of competent professional service – act diligently and in accordance with
technical and professional standards when providing professional services
Confidentially – A professional accountant needs to respect the confidentially of
information acquired and should not disclose any information to third parties without
authority

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Professional Behavior – A professional accountant should comply with relevant laws
and regulations and should avoid actions that discredit their profession. (Saeed, 2000,
Page 2)
Importance of Ethics in Accounting
Ethics are important throughout the business world, but they are especially important for
accountants and all accounting practices. In general, this is because accounting deals more with
facts, figures and hard data than any other business area. This means that there is less room for
perspective, and the results of unethical behavior are much more widespread.
Ethics in accounting and financial decision making
Ethics is the system of rules that governs the ordering of values. Ethics in accounting is
another environmental factor affecting accounting, and business in general, is the growing
concern over ethics. This concern has been a focus of the accounting scandals of the early 2000s.
Enron, WorldCom, and Tyco (to name a few) each resulted from upper management’s falsifying
financial reports (with the help of the company’s internal accountants) and external auditors not
detecting those falsifications. Accounting rules and the resulting information are designed to
capture and reflect the underlying performance of a company (University of Phoenix, 2008).
Conclusion
When discussing the topic of ethical standards and codes in the field of Accounting,
many areas in which one can explore the topic exist. Throughout discussions involving ethical
codes in general, it becomes clear how vital they are to the field, research, and occupations of
accounting and its practitioners. Without ethical standards and codes there would truly be no
rules to live by, creating possible chaos in the field. The overall importance of established

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professional ethical standards and codes are all necessary in mitigating the full understanding of
ethics in psychology overall.
When you become an accountant, you should be familiar with the standards and rules of
the position, accept personal responsibility for the foreseeable consequence of your actions, and
realize the long term effects of your behavior on the accounting industry and the citizens. At all
times, an accountant should conduct themselves with integrity, dignity, and respect for the
position held in society.

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References
Eber, William A. 2010, Accountants Professional Ethics,
Retrieved from http://www.metrocorpcounsel.com/articles/4037/accountants-
professional-ethics
Maughen, Jennifer, N.D., Basic Accounting Code of Ethics,
Retrieved on April 6, 2010, http://www/life123.com/career-
money/accounting/accounting-ethics.shtml
Saeed, Ghazala, 2003, Are Ethics Important for Professional
Accountants? Retrieved from http://www.ezinarticles.com/?Are-Ethics-Important-For-
Professional-Accountants?&id=516791