Question

Ethics in Accounting:

What are the differences between legal and ethical conduct, can an accountant act legally but unethically? What responsibilities do an accountant have and who do they owe the responsibility to?

Answer 1

Difference between legal and ethical conduct:

Legal conduct	Ethical conduct
A legal conduct is a conduct that is set in government laws.	Ethical conduct are not set by government i.e they do not have legal basis.
Legal conducts are all the statues and laws that lawyers point to.	Ethical conduct are based upon the human principles of right and wrong.
Example: parking sign not to ark vehicle at that location is a legal conduct.	Example: Not harming others.
These help people to know what they can't do.	These are the principles which tell them what should they do.
Legal conduct have a wider scope.	Ethical conduct applies to individuals.
Its basis is in ethics.	Its basis is in morals.

NO, an accountant cannot act legally but unethically. An accountant needs to work ethically and legally. If in case accountants get engaged in unethical practices then they are entitled to receive punishment. The punishment can result him in receiving financial costs, prison, or legal penalties depending on the crime he had committed.

Accountants have responsibility towards his clients, his company manager, creditors, investors and regulatory bodies. Accountants are responsible to provide information to the management by analyzing the accounting data. He is responsible for researching and analyzing data and prepare reports. He is also responsible to prepare entries for assets, liabilities, capital accounts.