Question

In 5 lines, Discuss about code of ethics in accounting and give examples of SOX and IMA

Answer 1

Code of ethics in accounting makes accountants/public accounting firms responsible for their actions while performing work for their clients. Accountants are expected to act ethically while carrying out their activities. They shouldn't indulge in fraudulent conduct (such as collaborating with management) in order to ensure client satisfaction or for their own personal benefits. They should highlight the errors or misstatements identified in the financial statements (provided by the client) and issue a qualified opinion as and when there is a need. Likewise, it is a must for every organization to ensure that employees behave ethically while performing their day to day activities. IMA code of ethics comprises of four main components/principles that the accountants are expected to exhibit while performing their duties. These four principles are honesty, fairness, objectivity, and responsibility. SOX makes top management including chief financial officer, principal accounting officer and other financial senior financial executives to adopt a code of ethics in order to ensure that the financial statements contain true and correct information and represent the true state of company's financial affairs.