Question

Professional ethics take center stage for accounting professionals- CPA's, managerial accountants... It has been said, “Integrity—Gained over a lifetime, lost in an instant.”   What is the significance of that for the accounting profession - give examples.

Answer 1

Accounting professionals are the are one of the most important professional of the company.Investors and stakeholders rely on the financial and income statement of the company which is prepared and audited by these professionals.Accounting professional are hence pressurised to be ethical as window dressing of financial statements can be helpful in current year but will not be will damage the organisation's image. Business survives at the cost of society and it must give something in return to it no business should survive at the cost of society There are some professional ethics that must be followed by the accounting professionals:-

•Integrity

•Objectivity

•Professional competence and due course

•Confidentially

•Professional Behaviour

Example- A company Alpha makes a profit of 256 million USD but in preparation of financial statements the company with the help of core accounting professionals manipulate the financial statement by window dressing and it shows the profit of 300 millions USD this goes for few years after few years the stakeholders knows the manipulation of financial statements and it is the point where the company began to fall .Now,even if company starts to work ethical the stakeholders lost the faith over the company and once the integrity is lose ita gone for lifelong.