Chapter FiveAccounting Codes of Conduct1

Accountants have a responsibility to present the most truthful and accurate financial pictures of an organization. As auditors, they have a responsibility to evaluate other accountants’ pictures and attest to their truthfulness and accuracy. In doing so, accountants accomplish the purposes of their profession – to meet the needs of the clients or companies for which they work, or to serve the best interests of the stockholders/stakeholders who are entitled to truthful representations of an organization’s financial status.

Individuals have an ethical obligation to perform their jobs. (As we discussed in Chapter 2, the act of accepting a job entails a promise to do that job, and promises should be kept.) Job responsibilities are usually spelled out in a job description, employee handbook, managerial guide book, company code of conduct, and/or, finally, the profession’s code of conduct or ethics.

The accounting profession has developed multiple codes of ethics that set the standards for accountants’ behavior, standards that require more than simply adhering to the letter of the law. We suggest that these sophisticated codes are the equivalent of a binding organizational moral law. Consequently, the codes determine what is ethically required of an accountant. Business Ethics2 enumerates six ways that codes of conduct can be valuable:

  1. A code can motivate through using peer pressure, by holding up a generally recognized set of behavioral ...

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