Question

• Explqin why ethical culture is important for a company and how it informs good decisions and how you would incorporate integrity and ethical culture in an accounting department,

Answer 1

Why ethical culture is important and how it informs good decision

Even after the crisis of 2009, the world has a very clear stance that the USA is the safest country to invest in. the reason behind that fact is very simple the USA is the country governed by law and ethics. one of the most important features in the companies long term success is its ethics. some of which important benefits of ethical culture are

• In an environment of ethics employees always trust their management about unbiasedness and fair appreciation of work so employees are able to work beyond their capacity.
• The customer always prefers the company to have high ethical values even at the premium price because the customer always prefers the company who keep his words and support customers even beyond the area covers by the policy.
• All related stakeholders in the company whether it is shareholders, suppliers, the government will support the cause of the company because in the ethical company they believe in the company and major projects progress a very prominent manner.

Integrity and Ethical culture in the accounting department

Finance is the most important area because the whole organization somehow or the other is connected with the finance department. Development of Ethics in the accounting department is a holistic process and not very easy but the following measures could be taken for the development of ethics in the accounting department.

• Internal control measures should be proper e.g. segregation of duties, reporting hierarchy. if internal control is in place ethical culture development will be easy.
• Proper checks and balances should be maintained by way of various audits like internal audit, statutory audit and responsibility should be assigned to concern persons.
• Proper appreciation for the person of accounting should be maintained so keep the morale high.
• Corporate Governance should be maintained in each and every case.
• Maintaining transparency towards the stakeholders also bring ethics in the company.
• Timely interact with managment is very important to incroporate ethics in enviornment.