The Ethics code prevents a firm or organisation from doing this unless there is a legal reason for doing so. The integrity of the employees. The Ethics code ensures that all members of the company demonstrate integrity and honesty in their work with clients and other professional relationships. The ethics code also prevents accountants from associating themselves with any information that could be misleading or damaging to the client or the organisation. If companies or individuals fail to comply with the rules and regulations listed under GDPR, it could result in serious consequences.
Therefore, it is essential for companies to maintain the integrity of the employees and ensure that they abide by GDPR rules. The accountant needs to be knowledgable. The accounting industry is constantly evolving and with the introduction of new technology such as automation of accounts payable , the role of accountants is changing.
This means that accountants need to stay updated on their skills to provide an accurate judgment on issues faced by clients. Possessing professional competence also includes being aware of where your skills and expertise lie and not implying that you have knowledge in areas you are not familiar with. If you are a supervisor, the code of Ethics ensures that your subordinates only carry out their duties after they receive the proper training.
The code of Ethics states that accountants need to abide by all the rules and regulations listed by the governing body. Failure to comply with the Ethics code can affect the reputation of the company and could even land them in legal trouble! In the U. K companies need to comply with the U. The goal of the GAAP is to standardise accounting practices and ensure that all companies maintain integrity and professionalism when it comes to preparing financial statements.
Tax payments. All companies have a legal obligation to represent accurate financial information on their tax forms. Some companies can provide inaccurate information to the tax authority to reduce their financial burden. However, they can face perjury and high fines if they get caught. The Code of Ethics ensures that accurate information is provided when filing taxes and keeps you in the clear.
Financial planning. It is the duty of the accountants to provide information that helps facilitate planning for the future of the business. In addition to accuracy, the information needs to be provided in a timely manner so that the company can make sound judgments based on the numbers.
Senator Paul Sarbanes and U. Representative Michael G. As a result of SOX, top management must individually certify the accuracy of financial information. In addition, penalties for fraudulent financial activity are much more severe. Also, SOX increased the oversight role of boards of directors and the independence of the outside auditors who review the accuracy of corporate financial statements. The bill, which contains eleven sections, was enacted as a reaction to a number of major corporate and accounting scandals, including those affecting Enron, Tyco International, Adelphia, Peregrine Systems, and WorldCom.
These scandals cost investors billions of dollars when the share prices of affected companies collapsed and shook public confidence in the US securities markets.
The act contains eleven titles, or sections, ranging from additional corporate board responsibilities to criminal penalties, and requires the Securities and Exchange Commission SEC to implement rulings on requirements to comply with the law. It created a new, quasi-public agency, the Public Company Accounting Oversight Board, or PCAOB, charged with overseeing, regulating, inspecting, and disciplining accounting firms in their roles as auditors of public companies.
The act also covers issues such as auditor independence, corporate governance, internal control assessment, and enhanced financial disclosure. Debate continued as of over the perceived benefits and costs of SOX. This information about the Sarbanes-Oxley Act was taken from Wikipedia , where you can learn more about it if you are interested. Michael G. Skip to main content. However, those dealing with money and sensitive personal and company information must adhere to strict ethics and integrity standards.
This is imperative to gain and retain the trust of clients, co-workers and business partners. Integrity is generally considered one component in the ethical standards of accounting practices. Accounting is a detail-oriented career that requires knowledge and skills to do the job correctly. Mistakes lead to problems with investors, business partners, finance lenders and the Internal Revenue Service.
It is imperative that anyone working at any level in accounting understands what is required of the job and how to execute it properly. Accountants see the good, the bad and the ugly of a company or a person's financial situation. Clients have a right to know that this information is kept in the strictest of confidentiality and is only shared with other professionals if consultation is required to address a specific problem.
Failure to keep information confidential could result in bad publicity and possible defamation of a company or person.
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