...ASSIGNMENT ON ASSURANCE OF LEARNING – ETHICS IN MANAGEMENT ACCOUNTING (CMA) Awoluyi Adekunle, Matric Number: 201403007 JUNE 29, 2015 MEMBA 3 LBS, Lagos AWOLUYI ADEKUNLE Matric Number: 201403007 Introduction The source of cost management ethical problems in any organization can be one or more of the following; 1. 2. 3. 4. Organisation’s management expectation Vs. professional ethics Personal desire for recognition / and promotion within the company Strife for quick money or cash Personal commitment or colleagues commitments In view of this, certain steps are required to be taken to ensure that strict adherence to business ethics is promoted within every organization. Several professional bodies have tried to ensure that best ethical practices are promoted and impunity punished. Take for instance the issue surrounding the stigma surrounding Cadbury Nigeria Plc in 2006. The organization posted profits not earned and the audit firm was also found culpable in the process. The company’s CEO was sanctioned by the Institute of Chartered Accountants of Nigeria (ICAN), being a chartered accountant himself, and the Audit firm was also sanctioned by the same body. All of this was done to promote high level of ethical standards amongst professionals and ultimately within organisations. The Institute Management of Accounts (IMA), USA developed four basic principles required by its members to maintain ethical standards. They are; Confidentiality ...
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...PART I: EXPLORATION OF BUSINESS ETHICS Ethics not only guide people what is right or wrong, but also are the basic standards in people’s lives and depending mainly on different perspectives, people will have their own ethical standards. Generally, a person will face difficult decisions whether their decisions have to violate ethical standards because of their personal purposes or they will disregard personal interests to accomplish their responsibilities. Obviously, it is not easy to stand between ethics and personal benefits. I remember that when I was in high school, I had to make one of the toughest decisions in my life. To be more specific, I needed to pass the final test if I wanted to pass Math class because my in-class grades were not good, and the proportion of the final test took 30% of the total. The conflicts between my mind and heart made me confused because the trade-off costs at that time were the same. In the end, instead of spending time to make that silly decision, I decided not to cheat on the final test and tried my best to finish the exam. Consequently, I got a B plus in total grade and also I realized that if I did cheat on the final test, I would be caught by supervisors. Each job will have their codes of ethics in which professional workers need to qualify in order to maintain the integrity of a profession. Somehow, I believe that the codes of ethics of doctors and accounting are the most relevant principle in which they will have the similarities and...
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...Behavioral Aspect of Accounting: The Need to Emphasize on Ethics ------------------------------------------------- Ahmad Zubair Chedi ------------------------------------------------- Abstract Accounting plays a vital role in providing information that permit economic decision, therefore the information has influence on its users. The financial statements that serve the basis for the economic decision are drawn up, not by the users, but by the enterprise’s accountants under the authority and control of the enterprise’s management. Ideally the preparers should take as their objective the fulfillment, (to the best of their ability) of the users’ needs. However the preparers have their own objectives, which often are quite different from those of the users. The financial statements can play a very important role in helping the enterprise’s management to achieve its objective. If the accounts show that the enterprise is doing well, the shareholders will be happy also the market price of the company’s shares will remain high. Since the accounts are prepared under the direction of the management there is a temptation for the management not to present the full truth about the enterprise in the financial statements, particularly when the company is doing badly. The paper examines the behavioral aspect of accounting with emphasis on the need of ethics; the methodology used is purely content analysis, using secondary data. The study reveals that unethical behavior is less...
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...Review of Accounting Ethics Dr. ACC 557: Financial Accounting May 22, 2013 Table of Contents 1.0 Corporate ethical breaches in recent times. 3 2.0 Accounting ethical breaches and their impacts 3 2.1 The Scandal of Enron 3 3.0 Organizational ethical issues and the management failure 5 4.0 Breach of the accounting practices and its impacts 5 5.0 Recommendations by the CFO 6 6.0 References 8 1.0 Corporate ethical breaches in recent times. Ethics is an important aspect of business in today’s enironment. Sometimes management ignores or leaves to state laws to govern the code of ethics within a company. Companies have faced a lot of issues regarding ethical situations in modern times. According to Baker (2012) contrary to the popular belief of the recent global financial crisis resulting from failures of accounting ethics, he argues that there is not enough evidence to support this connection. 2.0 Accounting ethical breaches and its impacts Breaches of the accounting ethical policies have become a source of concern for the firms today. The proper application of IFRS and GAAP standards is vital for each firm. In recent years as more scandals have come into the spotlight firms have taken more and more internal measures in addition to the policy making at the governmental level to ensure breach of consumers’ trust and laws does not take place in the future. There has been a tremendous increase in the interest in accounting ethics (Cowton, 2013). 2.1 The Scandal of Enron...
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...Journal of Economics and Management 11, no.1 (2003): © 2003 by The International Islamic University Malaysia ETHICS IN ACCOUNTING EDUCATION: CONTRIBUTION OF THE ISLAMIC PRINCIPLE OF MAêLAîAH Abdul Rahim Abdul Rahman Assistant Professor, Department of Accounting, Kulliyyah of Economics and Management Sciences, International Islamic University Malaysia, Jalan Gombak, 53100 Kuala Lumpur, Malaysia. (e-mail: abdulrahim@iiu.edu.my) ABSTRACT There is a growing concern over the apparently low moral standards of some accountants and an increasing number of academics who suggest that the education system should bear some of the blame. Ethical components in accounting education have been found to be insufficient and there is a lack of emphasis on humanizing accountants. The objective of this paper is firstly to address the importance of ethics in accounting education and evaluate the development of literature in this area. Secondly, the paper argues for the direction of accounting education to focus on religious ethical development and values in developing accounting ethics. The paper argues that the Islamic worldview and ethics perspective can provide some insights into the process of developing a more humanized and ethical accountant. This paper proposes the Islamic legal principle of ma§laúah as an ethical filtering mechanism to be taught as part of the ethical accounting education process. This is aimed at providing awareness to accounting students and accountants...
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...Financial Management of Health Care Organizations Latasha Rowell August 4, 2015 HCS/405 Conway Brew Financial Management In any business, financial managers should ensure that financial reporting practices and ethical standards are being met as well as maintained. These practices are vital in the financial success for any company, especially in health care finance. Within this paper, a summary of the four elements of financial management, generally accepted accounting principles, and general financial ethical standards will be discussed. Summary of the Four Elements of Financial Management There are four main financial statements of a profit earning organization. They include the balance sheet, the statement of revenue and expense, the statement of fund balance or net worth, and the statement of cash flows. The balance sheet provides a snapshot of what an organization's owns and owes. This is displayed as assets and liabilities. The balance sheet provides a snapshot of a company’s net worth. The income statement provides an overview of the financial flow of an organization. This report is commonly extracted for a specific period of time rather than a single point in time. This statement is most often utilized in an audited financial report on a quarterly and annual basis. The statement of net worth calculates the non-operating expenses and allows the income statement to tie back to the balance sheet when the three statements are prepared for the same point in time...
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...Reporting Practices and Ethics Paper HCS405 Reporting Practices and Ethics Paper Introduction The ethics and financial reporting of a company or corporation go hand in hand. It is easy to try and find any way to be financially successful. That is why there are accounting principles, ethics, and elements utilized to help ensure that a company can stay at a high level of ethics. One article discusses how companies with high levels of ethics tend to be more successful than those that do not have a high level of ethical standard. Ethics play a large part in the financial management of a company. Elements of Financial Management The first element of financial management is planning. Planning consists of upper level management setting forth what needs to be done for a facility to come out in the ‘green’ and break even or have a profit. This plan should also have details on how to do it on top of the objectives. Planning is needed so that a company knows what it wants and the route they plan to take to get to where they want. The next element is controlling. Controlling is where upper level management does a checks and a balance by comparing past financial reports to current ones to see that the financial objectives and goals are met. This can help to narrow down exactly which departments are in need of assistance to meet their goals. If a company has kept accurate and detailed financial reports it is more likely that the company can heavily rely on these reports to help...
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...Reporting Practices and Ethics Yolanda Jones HCS/405 March 10, 2014 Darlene Tomlinson Page Break Reporting Practices and Ethics The healthcare industry is a rapidly growing segment of the U.S. economy, amounting to over $2.1 trillion annually. Healthcare focuses on diagnosis, treatment, and prevention among other things. Health care makes up one sixth of the U.S. GDP it is the largest source of the nation's public expenditures. With large amounts of revenue going in and out of hospitals and facilities and health care reform accounting can be challenging. To help ensure fair and accurate financial reporting, there are practices and ethical standards that must be followed when accounting for finances in health care. This paper will provide the four elements of financial management and standard accounting principles and ethics. Financial Reporting Practices The Financial Accounting Standards Board was established in 1073. It is the designated organization in the private sector that establishes standards of financial accounting for nongovernmental entities. The standards established are officially recognized as authoritative by the SEC and the American Institute of Certified Public Accountants. The FASB also has accounting standards for health care entities. "The AICPA Health Care Expert Panel developed technical guidance on the application in consolidated financial statements of a recent accounting standards update for health care entities"...
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...Reporting Practices and Ethics Paper Teresa Lucas HCS/405 04-13-2015 Elizabeth Caissie The key to understanding finance is learning the four elements of financial management and their relationship to one another. It is important that all financial records are up to date because this helps keep track of how an organization, so they know if they have a profit or a loss. There are four elements of financial management are planning, controlling, organizing and decision making. The first one is planning it allows an organization to set goals and guidelines to ensure success and accomplishments in set goals. The second element of financial management is controlling. Controlling allows an organization to ensure that all rules and regulations within the organization are being followed. The third element of financial management is organizing. Organization is important because it guarantees that the organization is working at its best and it is organized while directing the medical office to work and fix problems that may come. The last element of financial management is decision making. All decision relies on information, and evaluation. Decision making works along with the planning, controlling and organizing...
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...Managers’ Ethical Evaluations of Earnings Management and Its Consequences* ERIC N. JOHNSON, University of Wyoming GARY M. FLEISCHMAN, University of Wyoming SEAN VALENTINE, University of North Dakota KENTON B. WALKER, University of Wyoming 1. Introduction and motivation The purpose of this study is to investigate, in an experimental setting, how favorable versus unfavorable organizational consequences influence managerial responses to an employee’s earnings management behavior. We focus on the following question: Do the ends of positive organizational consequences justify the means of earnings management? Earnings management is defined as ‘‘the choice by a manager of accounting policies so as to achieve specific objectives’’ (Scott 2003: 369). Earnings management can be fundamentally classified as either accounting related, involving the manipulation of accounting records through aggressive or fraudulent applications of accounting principles, or operating related, involving choices made by management regarding the timing of investment or operating activities, with the result that reported earnings are influenced by these choices (Lev 2003; Cohen, Dey, and Lys 2008; Roychowdhury 2006; Gunny 2010).1 The effect of earnings management on the value of the firm and the related issues of financial-based incentives for managing earnings has been widely examined in the accounting literature (e.g., Healy 1985; Dechow, Sloan, and Sweeney 1995, 1996; Healy and Wahlen 1999; Fields...
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...The Role of Accounting in the Medical Office By Joy Hicks Medical Office Expert An accounting department plays an enormous role within the medical office. As the backbone of the organization, the accounting department allows the organization to operate at its fullest potential. Without an accounting department, it would be impossible for any type of organization to operate in a cost effective manner. General Accepted Accounting Principles (GAAP) are the common set of accounting principles, standards and procedures that companies use to compile their financial statements. GAAP, are simply put, the customarily accepted ways of recording and reporting accounting information. Each organization may operate differently but all have to follow by set guidelines within the organizations community, state and at the federal level. If these standards and procedures are not followed the U.S. Security and Exchange Commission (SEC) will fine the organization and possibly pursue criminal action to enforce compliance. Within accounting and financial management, there are four key elements recognized. The four elements are: Planning, Controlling, Organizing and Directing and Decision Making. The planning element allows an organization to set forth goals and guidelines to ensure the future success and accomplishments of the medical office. Controlling provides the organization the opportunity to ensure that all areas within the organization are following the previous planned...
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...Financial management is the management of any business finances or an organization in order to achieve the business financial objective (Jones & Bartlett, 2010). There are many financial decisions that are made on a day to day basis for any transactions to occur (Jones & Bartlett, 2010). These decisions are made according to the organizations fiscal objectives (Jones & Bartlett, 2010). But we all may have one question and that question is “How well are health care organizations’ finances and are these health care organizations financial records accurate? The four elements of financial management are recognized as planning, controlling, organizing and directing, and decision making (Jones & Bartlett, 2010). These are decisions are made on what kind of task is being performed. Some organizations strain over three of the elements which are planning, controlling (organization and directing is part of the controlling element), and decision making (Jones & Bartlett, 2010). 1. Planning can be defined as: The financial manager identifies these four elements as steps for an organization to accomplish their objectives. The planning process is to identify and take the initial steps to accomplish those objectives (Jones & Bartlett, 2010). 2. Controlling: Financial manager will take control and making sure that each part of the organization is following the plans that have been put into place (Jones & Bartlett, 2010). 3. Organizing and directing: This is a decision made by the financial...
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...Accounting 1370 Accounting Ethics Session 6 Governance, Accounting, and Auditing, Post-Enron Group 1: Student Name__Seven Autrey_____________________________________ Student Name__Duc Nguyen_____________________________________ Telling the Enron Story Name five ethical problems and the existing conditions that caused the Enron fiasco. Explain each. 1. Fiduciary Failure – the board of directors failed to safeguard the companies from many inappropriate practices. 2. High Risk Accounting – Enron allowed high risk accounting in that the partnerships with Chewco and LJM1 and LJM2 did not conform with accounting rules 3. Enron had extensive undisclosed off-the-books activity. There were billions of dollars in off-the-book assets and liabilities. 4. Excessive Compensation – There was a cash drain caused by the 2000 annual bonus and performance unit plan. 5. Lack of Independence – There were financial ties between Enron and board members. Arthur Anderson provided internal auditing services as well as consulting services. Accounting 1370 Accounting Ethics Session 6 Governance, Accounting, and Auditing, Post-Enron Group 1: Student Name__Carol Cates_____________________________________ Student Name__Brenda Bohm____________________________________ Telling the Enron Story Name five ethical problems and the existing conditions that caused the Enron fiasco. Explain each. 1. At Enron, a lack of integrity was built into the foundation...
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...Ethics Paper HCS/405 December 12, 2011 Professor Ethics Paper When we talk about financial planning we have to take step back, look at the whole picture, and understand how it begins. Financial Management is the key essential in an organization when you plan financially. Financial Management is the building blocks for all accounting records and business transactions that occur. We cannot forget that decisions are based on the organizations fiscal objectives others are based on general accounting principles. So to better understand you must ask the question of “Is the financial management of the organization strong and how is the financial reporting records validity”? When we think of financial management we have to start with the basic framework of any accounting structure and that would be the generally accepted accounting principles (GAAP) is the hierarchy of accounting standards. As we look at these accounting standards, the GAAP has a long list that follows such as; standards, conventions and the rules of the organizations accounting follows when during summarizing all transactions for the financial statement. Then we have what is known as the third parties these should be free of any type of bias and inconsistency without debate or the GAAP standards will follow. With any organization the “general accepted accounting principles are guidelines precisely, are a group objectives and conventions that have been set up permanently over time to set how financial...
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...are Ethics? Generally, why do people act unethically? 2 3.0 Justify why is there a special need for ethical conduct in professions including those in the accounting and auditing related field? 6 4.0 Discuss how the Barings collapse serves as an example of failed internal controls and governance within organization. 13 5.0 Conclusion 20 1.0 Case Summary Nick Leeson, an employee of Barings Bank who after a successful spell working for the firm's office in Indonesia is sent to Singapore as General Manager of the Trading Floor on the SIMEX exchange. Leeson's rise as he soon becomes one of Barings' key traders. However, everything isn't as it appears — through the 88888 error account, Nick is hiding huge losses as he gambles away Baring's money with little more than the bat of an eyelid from the powers-that-be back in London. Eventually the losses mount up to well over £800 million and Nick, along with his wife Lisa, decide to leave Singapore and escape to Malaysia. Nick doesn't realise the severity of his losses until he reads in the newspaper that Barings has gone bankrupt. They then decide to return to London but Nick is arrested en route in Frankfurt. Nick is extradited to Singapore where he is sentenced to six and a half years in jail and is diagnosed with colon cancer. 2.0 What are Ethics? Generally, why do people act unethically? At its simplest, ethics is a system of moral principles. They affect how people make decisions and lead their lives. Ethics is concerned...
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