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Accounting I

Gain an understanding of ethics in accounting, including the meaning of ethics, organizations that provide ethical guidelines, a three-step checklist for making ethical decisions, and key principles for ethics in accounting. Learn about integrity, objectivity, independence, competence, and confidentiality in the accounting profession.

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Accounting I

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  1. Accounting I Objective 1.03 Understanding Ethics Needed For Employment In Accounting Objective 1.03 Understanding Ethics

  2. What is meant by Ethics? • Ethics is the study of right and wrong and how people choose what is morally good and bad. • Business ethics refers to how a company uses a code of conduct, which is designed to encourage ideal behavior when making decisions. Objective 1.03 Understanding Ethics

  3. Organizations That Provide Guidelines for Making Ethical Decisions • AICPA – American Institute of Certified Public Accountants • IMA – Institute of Management Accountants • IIA – Institute of Internal Auditors Objective 1.03 Understanding Ethics

  4. Three-step Checklist for making Ethical Decisions • Is the action legal? • Does the action violate company code of conduct or professional standards? • Who is affected by this decision & how? Objective 1.03 Understanding Ethics

  5. Key Principles for Ethics in Accounting • Integrity • Objectivity • Independence • Competence • Confidentiality Objective 1.03 Understanding Ethics

  6. Integrity • Accountants must choose between right and wrong. • Accountants are responsible for entering correct entries.(Accuracy) • Accountants are responsible for true and correct financial statements. (Accuracy) • Integrity is necessary for accountants to build trust in regards to their professional judgments. Objective 1.03 Understanding Ethics

  7. Objectivity • Accountants must be: • Impartial • Honest • Free of personal conflicts – “not wanting someone else to get in trouble” • Accountants must not be influenced by personal interests. • Accountants should behave in a way that does not suggest inappropriateness. Objective 1.03 Understanding Ethics

  8. Independence • Accountants do not have an interest or profit financially from the companies they audit. (They can’t suggest a client do something, “invest in” a venture that will benefit the accountant in the long run) • Accountants must have the public’s confidence in their professional services. Objective 1.03 Understanding Ethics

  9. Competence • Accountants should be knowledgeable in their profession. • Accountants must have the skills necessary to perform their jobs. • Accountants must have experience in their field. • Accountants are expected to keep abreast of current laws by continuing education classes. Objective 1.03 Understanding Ethics

  10. Confidentiality • Accountants must not share private information regarding their clients. • Accountants are expected to protect personal and private information regarding their clients. • An accountant should not use information learned for personal gain. Objective 1.03 Understanding Ethics

  11. Resources Glencoe Accounting 1st Year Course, McGraw-Hill, 2007. Objective 1.03 Understanding Ethics

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