Describe the ethical responsibility of accountants?Ethics

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readerofbooks eNotes educator| Certified Educator

What an important question for our day and age. I would say there are many important reasons why accountants must be ethical. I will only mention two. First, accountants need to be honest in describing to the public how companies are doing. If they falsify information, investors can and will get hurt. Recently, a lot of people lost money on the company Sino-forest due to accounting fraud. In the past, even more people lost money on Enron and MCI World Com. It was mostly due to accounting fraud. People thought these companies were doing well, because the numbers were manipulated. Examples can be multiplied. Second, honest and accurate accounting helps companies to correct problems that might be endemic. In a sense, good accounting is a diagnostic tool that checks the wellness of a company. Once the leaders of a company know what is going on, they can steer the company in an appropriate way. Finally, these points are so important that outside accounting agencies are necessary to do audits.