Essay on Ethical Dilemma for Accountants

All accountants should behave responsibly in every place and at every time. They should be able to account for all their actions relating to the financial records and accounting books of an organization. The senior accountants are mostly approached by their juniors in the case of unethical practices. Therefore, they should always be ethical so as to be good role models to their junior staff. In case one of the senior accountants is unethical, he or she will not have a voice about ethical behaviors because the junior analysts will not listen to him. A public accountant should maintain good practices because the staff, the clients, and the community members are always on watch. No client wants to be attended to by an unethical accountant. It is because unscrupulous accountants lead to losses of the clients' companies and reduce the overall economic growth of the country. Moreover, customers want accountants who are competent, honest, and trustworthy and have a high level of integrity. Therefore, a professional accountant who is a principal or a senior employee within a practice will have an especially important role to play in creating, promoting and maintaining an ethical culture within the practice and, possibly, among the clients of the practice (Kittson & Campbell, 2016). Accountants must have an impact on the organization as they steer the direction of an organization. It is because they prepare budgets for an organization and keep and maintain all financial records. In the case of any irresponsible behavior, then they will lead the company to make losses, and if they maintain ethical practices, then they will lead the organization to perform exemplary thus earn a lot of profits. Consequently, all accountants are deemed responsible in case the team fails and should, therefore, act in the best interests of an organization and the public as a whole.

Is your time best spent reading someone else’s essay? Get a 100% original essay FROM A CERTIFIED WRITER!

Order now

Ethical Dilemmas for Accountants

A professional accountant should maintain objectivity, confidentiality, integrity, professional behavior, professional competence and due care at all times. However, while performing and managing all those responsibilities, he or she is faced with different ethical practices since he or she wants to please all parties involved. For example, in an organization, the chief executive officer (CEO) may lie to the bank that the organization is in good shape whereas it is not and tell the accountant about it. The controller is faced with the dilemma of whether to adjust the accounting records they are to provide to the bank so as to confirm the statements of the CEO or to provide the real accounting records that show that the organization is not competent and make the CEO a liar. Such dilemmas face accountants every day. Therefore, it is up to them to maintain the code of ethics and make decisions wisely so as not to harm any party involved (Blake& Gowthorpe, 2014). Some of the ethical dilemmas professional accountants face are; firstly, they have to comply with the governance principles. However, they should promote the real objectives of their clients. It may compromise the rule of compliance whereas failure to comply is considered as a breach according to the law and inability to promote the aims of the clients is also acting irresponsibly. Another ethical dilemma faced by accountants is when they should act in the best interests of the customer as well those of the public. It may lead to a difficulty especially when the interest of the public is not similar to those of the client. Therefore, the accountant is expected to maintain objectivity not only when re-assuring both parties but also when making the decision of whose interests are more valuable. Also, accountants are required to work hand in hand with their clients, but there are times they are expected to distance themselves from them. Therefore, it becomes difficult for the accountant to explain to the customer why they are maintaining the distance. The accountant is faced with a dilemma of whether to ignore and just continue working with the client or distance themselves and have to explain to the customer why they are keeping distance or lose the client. An example of an accounting dilemma was faced during the Enron scandal (Low, Davey & Hooper, 2014). It was when Andersen revenue model was informed that its client, Enron Company had been fraudulent. Andersen revenue model destroyed all the files they had regarding Enron's accounts. The dilemma was whether to act in the best interest of their client or the best interest of the public. However, they acted in the best interest of their client as well as their best interest and were thus deemed fraudulent as well because they abetted Enron in committing the crime.

Resolving Ethical Dilemma

When resolving an ethical dilemma, an accountant should carefully consider whether other parties could or should be involved in discussions and, if appropriate, how those individuals should be approached (Bagratuni, 2013). An accountant should always consider the code of ethics to resolve the ethical conflicts. It is important to note that ethical conflicts may arise as a result of self-interest; whereby the accountant may feel that the financial interest may affect his or her judgment. On the other hand, the accountant may find that objectivity is compromised when he or she wants to promote one partys position than the other. Conversely, an accountant may feel sympathetic to an unethical staff member or client because of the feeling of familiarity and due to having developed a closer relationship with the party. Moreover, other parties may seem to have undue influence over the accountant since he or she does not want to hurt either party and maybe feel intimidated by the parties. Lastly, the accountant may feel that his decisions are not appropriate since another accountant made similar decisions and it resulted in absolute failures. Therefore, an accountant should always make wise decisions and keep in mind that the decision made should always be fruitful and not have effects on any party.

Conclusion

We are all faced with ethical dilemmas in our daily lives, and most people find it hard to recognize it. Most individuals do not know that they are unethical but most of the things we do have an ethical dimension. The ethical dilemmas are always controversial, and it is so unfortunate that it is hard to find solutions to the ethical dilemmas. However, they are important in life since they provide individuals with the chance to exercise freedom and have the sense of personal responsibility and also give people an opportunity to develop morals and principles that guide the community. A professional accountant deals with significant pressures when resolving ethical dilemmas since he or she has to fulfill the competing demands of all parties; which are the public, clients and the organization. It may waste his or her time that could be used to conduct his duties thus leading to other arising ethical issues to fulfill all those demands. Accountants faced with ethical dilemmas should seek legal advice or ask advice from a professional body. However, accountants have the opportunity to choose not to rely on merely technical information. They should always consider the depth of the ethical dilemma so as to know how to resolve it.

References

Bagratuni, P. (2013). Ethical dilemmas in accounting.

Blake, J., & Gowthorpe, C. (Eds.). (2014). Ethical issues in accounting. Routledge.

Kittson, A., & Campbell, R. (2016). Ethical issues in accounting. In The Ethical Organization

Macmillan Education UK.

Low, M., Davey, H., & Hooper, K. (2014). Accounting scandals, ethical dilemmas, and

educational challenges. Critical Perspectives on Accounting, 19(2), 222-254.