What are ethics? According to the Merriam-Webster dictionary, ethics are defined as,
“Rules or behavior based on ideas about what is morally good and bad.” Ethics are an
individual or group’s moral values that govern daily behavior and crucial decisions. From
a professional standpoint, ethics ensure quality and fair practice. In business terms, it is the
moral duties and obligations that apply to the conduct of various professions. Ethics
encompass a set of understood rules to guide the direction of a business. Ethics play a
valuable role in the profession of accounting.
According to the Merriam-Webster dictionary, accounting is defined as, “The skill, system,
or job of keeping the financial records of a business or person.” The system of accounting
records and summarizes financial transactions and analyzes, reports, and verifies the
results. Accountants perform these tasks by establishing these reports through a system
known as bookkeeping. The three common reports that are generated by accountants are
balance sheets, income statements, and cash flow statements. Each of these reports serve
an essential purpose to the success of the organization. The balance sheet summarizes an
organization’s assets and liabilities. The income statement reports an organization’s gross
proceeds, profit or loss, and expenses. The cash flow statement analyzes the flow of
incoming and outgoing cash within the business.
Ethical standards are important in any profession. However, there is a higher expectation
of ethical conduct in the accounting profession. Ethics in accounting is vital to various
organizations. Accountants perform duties such as auditing, consultation, financial
planning, managerial accounting, and tax accounting based on their different skill levels
