What are the 05 Accounting Ethics?
What is accounting ethics?
Accounting ethics are the rules and regulations that one must follow while maintaining accounting records.
An individual in the accounting field has to follow these rules to avoid the misuse of financial information.
Accounting ethics are regulated by the guide published by various governing bodies such as the Institute of Internal Auditors (IIA), the Chartered Institute of Management Accountants (CIMA), and the Association of International Certified Professional Accountants (AICPA).
There may be variations in their ethical codes, but all these organizations want accountants, auditors, and other people to act responsibly while handling accounting tasks and sensitive financial information.
It is important for individuals practicing in the accounting field to utilize their best professional knowledge and moral judgment while executing accounting tasks.
That is because they offer professional service and present the public with a true and fair view of an organization’s financial position.
Ethics in accounting plays an important role in the true and fair reporting of financial information, which is required by decision-makers, stakeholders, and the public.
What are the five-accounting ethics?
- Integrity:
Integrity is essential in accounting professionals. Accountants, auditors, and other finance professionals must ensure they don’t manipulate numbers or clients’ financial information for any kind of personal gain.
They are required to display a high level of integrity to avoid association with any misleading information.
- Objectivity:
Objectivity is one of the important ethics in accounting. It means no favoritism or favor to one side or another.
Accounting professionals are required to act best as per their professional criteria and make unbiased judgments, free from any influences, bias, questionable business relationships, and conflict of interest.
- Professional competence and due care:
If you are an accounting service provider, it is necessary to update yourself on the latest technology, existing legislation, and best practices in your field and maintain appropriate knowledge and skill.
It enables sound decision-making and judgments and provides the client with the best professional service.
Besides, as an accounting professional, you should practice due care. You must exercise diligence, competence, and an in-depth understanding of financial information.
And it’s also equally important that your team has received proper training and guidance on how to execute their jobs.
- Confidentiality:
Confidentiality means ensuring the privacy of the clients’ confidential financial data.
For instance, if you disclose any crucial and sensitive information without the client’s consent, you are violating the trust and relationship with clients that took time to build.
- Professional Behaviour:
Accounting ethics codes require all accounting professionals to comply with laws and regulations. Any unprofessional behavior that impacts reputation and integrity must be avoided at any cost.
They need to display respect towards colleagues, officials, clients, and even competitors.
Meru Accounting as an accounting service provider ensures each and every accounting professional strongly follows ethics in their accounting practices while handling the financial information of the client. Compliance with accounting ethics is of utmost importance while providing service to clients.
