AreĀ ethical accounting practices equally important for both public and private companies?

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thanatassa | College Teacher | (Level 1) Distinguished Educator

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Ethical accounting practices are important for all companies. Although one could argue that they are more important in public companies because they affect shareholders, and even a broader area of the market due to participation in stock exchanges, unethical accounting practices in private companies still do harm to commerce. Ethical accounting is related to several forms of public good, including preventing such illegal activities as money laundering and tax evasion which hurt a community as a whole. Next, a privately held company can employ thousands of people and unethical accounting practices can have an adverse effect on employees, creditors, and suppliers, as well as owners.