Ethical Codes Of Conduct Are Secondary Thoughts - 1531 Words

Enron, WorldCom and Bank of Credit and Commerce, just to name a few, runs chills up and down the spines of, well, just about everybody. These scandals swirled around several large businesses, and hinged on unethical practices – unethical accounting practices, specifically. The idea of ethics is a hot button these days in all genres. In fact, universities and colleges are including ethics in the curriculum of every discipline instead of offering an ethics major, per se (Kanaiah Kumar, 2009). It seems that ethical codes of conduct are secondary thoughts after the critical elements of a chosen discipline, when in actuality; ethics are a common thread across the disciplines. When considering accounting and ethics, the implications of†¦show more content†¦In addition, and maybe most important to the layperson, an auditor does not prepare financial statements, nor do they determine the amounts included in said financials. In essence, an auditor sets the stage to a co mpany’s claim to reliability and accountability to its stakeholders. To that end, ethical standing is essential. Ethics In a perfect world, a company does not commit fraud or some other action to deprive its stakeholders standing, financially or otherwise. However, since the world is a smidge short of perfection, there are some checks and balances to protect stakeholders. Usually, a company’s accountants are such that the financial credibility is maintained internally and then confirmed by an auditor externally with the minimum of adjustments. If internal controls are ineffective, and a company is determined to undermine its stakeholders financially, those types of incidents are reined and culpable accounting practices are discovered by an auditor’s refusal to endorse the financials associated with said business. If the external process fails, the business’ potential viability fails. This has been proven over and over and quite famously. With all that having been said, it is safe to assume that auditors are not perfect; and commit ethical failure as the Arthur Andersen firm did with Enron. There are many ways or reasons