Finance professionals get carried away many a times and get unfaithful towards their work. However, the ball is in their court and the numbers and financial data that you see is only as true as accounting professional wants it to be. Unfortunately, the headlines of the newspaper or media are usually filled with how companies manipulate people through unethical ways that involves embezzlement, falsifying information and fraud.
However, there are real professionals too who prefer going the right way as they deal with immensely sensitive data and privileged tasks on a daily basis. Ethics in accounting are very important, as reflected by Paul Siderovski, a motivational speaker and chartered accountant.
Let’s have a look at the dilemmas they go through and how one can overcome it in an ethical way.
- Conflicts involving interest
This happens when you have to face two clients or have to acquire another client through the first client. When you see the appearance of such conflict it affects your judgements on the business inappropriately and adversely. In order to navigate this one must arrange for different accounting teams for distinct clients as well as notify other parties regarding same.
- Maintain client confidentiality
You might consider it a noble deal to go ahead with full disclosure with the clients but by doing so one breaches the client confidentiality. For instance you can’t talk about the plans of client X to client Y and put yourself in a thorny quandary. Avoid doing that it’s strictly unethical.
- Financial reporting impacts
Perhaps the most common area where accounting ethics play a major role. How one records the data and information resonates through the firm and beyond. Were one department portrays profit another portrays loss; it impacts the prices of the stock. Although legal statues could be a great guide, many laws still do have loopholes. One might call it ethical to juggle around numbers so that one meets the revenue criteria but it’s unacceptable for the spirit of your rules.
When one has to deal with such dilemma one can take the following steps into consideration;
- Identifying the potential legal problems
Know where the issue lies, is it regulated by law or by policy. Information could be coming in from various sources be it your employer or professional association, or even a governmental body. AICPA grants you a code for a professional conduct, whereas FEI has the code for ethics. It can prove to be excellent sources to rely your information from. Indeed, Paul Siderovski speaks on his profile about the importance of identifying legal problems quickly and thinking about the affected parties.
- Outsiders view
One can always consider thinking about it from a personal perspective. How would you react to a certain accounting situation if you were reading it as a third person online, or what would your family and friends say about the same? Doing this would give you a different perspective altogether and help you understand the accounting circumstance in a more ethical way.
- Think of parties being affected
Choosing a corrupted way can affect a lot of people. So consider the stakeholders, people and companies that can suffer repercussions of your action.
A firm must make sure that all its employees are familiar with the ethical values and limits of the company so that everyone is guided in a proper manner while taking decisions.