Ethics for Professional Accountants


Ethical responsibility in the corporate world cannot be considered holistic. However, it is important to consider every particular phenomenon that exists within the context, and influences ethical behavior (FEE, 2011). The responsibility of accounting ethics is to ensure that there is a system of information, placed in a way that would support and encourage rational behavior in business. Accountants are not personally held responsible for the structural environment within which they are employed to communicate information and produce goods, as well as for the intended purpose of such information (IFAC, 2006). One central goal that should be keenly monitored and put to consideration in the evolution of accountants’ profession is the development of personal moral judgment. Moral obligation is laid on every member of staff, and responsibility is deemed key to every action that has to be taken.

The need for the maintenance of public trust and the integrity of the profession has led to the growth in the number of researchers analyzing the capacity and good judgment abilities. Many scholars and professional researchers are becoming interested in studying the issue of morality and ethics in business (FEE, 2011). It is caused by the fact that it is central to the sustainability of every business entity and the society in general. Most of the studies focus on accountants who work in large companies, while only a few of them take an interest in the small firms and accountants working on their businesses. Thesis: Ethics and integrity in the accounting profession are the pillars of business, since they provide notions of the organizational structure to the outside world.

Research Methodology

In my attempts to find out the significance of accounting ethics in the corporate community, I used secondary methods of data collection where I studied the pre-recorded research information from previous researchers. I was able to compare different kinds of literature to understand what different situations in the current field research. I use data from the American Accounting Information databases, reading through the recorded research information regarding traditional activities and managed to outline the most necessary issues from such comparisons. The reason for opting to take secondary sources of information instead of the primary ones is the fact that gathering accounting professionals and taking their time asking the question is a difficult and time-consuming activity.

One fundamental fact is that professionals who are always occupied with issues of business are guided by codes of conduct not to disclose information regarding their profession to non-accountants. It means that it can be very challenging to collect information from them, raising concerns of falsehood and non-compliance. My primary source of information was the archives of International Federation of Accountants (IFAC) where all the information regarding accounting profession is documented. I also spent some time studying the European Federation of Accountants (FEE) database to find out what researchers from Europe have gathered data concerning ethics in the field of accountancy.


The mechanism through which ethics and morals are incorporated in the accounting profession impacts naturally on the comparability of the information being conveyed. Such aspect, as well as harmonization of the accounting process, outlines the globalization process and its primary effects on the wide audience. Since business ethics represents a philosophic and complex concept, the current report will focus the analysis on a regional and deeper perspective. It will be accomplished by considering the most recent developments in the field belonging to the European Accountants (FEE). Previously, we mentioned the five fundamental principles composed in the IFAC code of ethics, where integrity is one of them. In September 2011, FEE availed a discussion paper focusing on integrity within professional standards, which emphasized the necessity of such particular principle.

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Moreover, FEE press release in April 2011 stated that vocational and personal integrity is the most fundamental ethical principle for behavior in the corporate world. We can comfortably consider the discussion paper issued in September 2011 as a representation of a significant step towards the clarification of professional ethics. FEE Annual Review covers the most fundamental principles and values and of professional accountants as they are in the IFAC’s Code of Ethics of 2006. Thus, integrity can be defined as the act of being honest and straightforward in business and professional relationships. It calls for truthfulness, fair dealing, and not associating with information that could contain materially misleading or false statements or data. A total of 30 responses were documented in the discussion paper.

The respondents were members of the audit firms, FEE bodies, professional accounting bodies, and other professional organizations, regulators, as well as separate individuals. The consultation with such respondents brought interesting observations about the meaning of integrity in business and how it can be installed in their organizations. The respondents’ arguments proved the FEE’s consideration and understanding of ethics and integrity as the core principle from which the others derive. Some of the respondents still insisted on interaction with other ethical principles, as well as their importance. Threats and factors that tend to undermine integrity were interpreted to vary in consideration to the economic period in question. Such idea was further supported by the FEE President, Johnson Philip. Philip stated that it is necessary to look at how disciplinary arrangements and codes of ethics can respond adequately to unethical behavior in the different cycles of the economic. Conmsidering the interaction of professional and personal integrity, the respondents asserted that personal character was significant to the needs of professional integrity. However, its effects on the accountancy bodies’ disciplinary mechanisms raised mixed reactions.

Answering the question whether it can be helpful for the professional organizations’ codes of ethics to incorporate more discussions regarding integrity, the majority favoring such idea pleaded for coordination and willingness at international levels. Respondents also confirmed that individual accountants have a primary responsibility though it varies according to the circumstances. However, they disagreed with the idea of adding additional guidance to the issue of integrity. It means that everybody must be driven by their instinct whenever they are taking a step without waiting for some form of law or regulation to prevent them from doing something wrong. Another fundamental aspect revealed by the consultation process is that ethics and integrity of organizations is a significant matter in the industry. The respondents agreed to the fact that individual actions form a collectivity that represents an organization to the outside world. It means that everybody plays a role in creating the picture that is seen by the outsiders about a firm.


As it has been discussed previously, the role of an accountant in an organization is to give a faithful and genuine representation of economic realities based on the recorded facts. Integrating ethics to the role of an accountant, the subsequent interactions are considered. A high level of ethical behavior and integrity would make it easier for the individual accountant to give a fair and genuine representation of the economic facts. Creative accounting occupies the fundamental part of the institutions representation due to its complex interpretations. Used in an appropriate manner, ethics and integrity should help the accountants in attaining the faithful representation. Accounting knowledge can be manipulated to yield fraud, since it is placed at the center of the business, where income and expenditures are determined and recorded. Faithful representation of institutions is attached to the highest levels of ethics. Nevertheless, there is an issue of faithful and honest representation, regarding the users of professional accounting information and the primary objective of financial reporting.

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Despite all the facts and claims, it is considered a good way to argue for necessity of ethics in relating to the accounting profession. Ethics focus on moral principles, human behavior, and then make attempts to distinguish good behavior from the bad one. Trying to distinguish common issues being addressed within the corporate environment, professional bodies’ codes of ethics become the appropriate place to consult. Such codes dictate what should be considered as a reflection of business ethics and integrity. Moreover, the codes of ethics should primarily address the issues deemed to be of high risk to the business and its stakeholders. Ethics and integrity are defined as the basis of every business entity, since they are the defining factors for the relationship between objects and the outside world. The information gathered from the research activity confirmed the fact that ethics is the pillars of business and every situation where the ethical standards have been questionable results in business risks collapse.

Business ethics evaluates the manner in which individuals solve complex issues where morals have to be tested at both personal and corporate levels. According to IFAC, business code of ethics is the reference points for individuals when they are faced with a complex and pressing issue. For instance, a person may find a chance of adjusting figures and help the business entity win a contract and make profits. However, before any digit can be adjusted, there are issues regarding ethical standards and their implications that should be evaluated. Corruption and fraud are some of the issues that face the accounting profession, and it is evident from the information gathered from the research. Accountants form the basic unit for controlling business income or expenditure, and their figures represent the general overview of the financial situation to the stakeholders, giving them a leeway to present what they deem favorable in a particular case. Honesty, integrity, and general ethical standards are to be upheld at all times, with every individual taking responsibility for every action he/she executes.


During the few last decades, public interest and concern for business ethics and integrity have significantly emerged due to a continuous flow of fraudulent business management and transactions (FEE, 2011). Therefore, it should not be surprising that public trust in corporate entities and accounting professionals is decreasing. It represents the arguments and grounds for finding means of incorporating ethics within the professional educational environment, as well as accounting practice. Accounting education should be considered as a potential solution to the professional ethics and integrity crisis (IFAC, 2006). If the corporate world wants to have ethical professionals, ethics should be taught in school so that it could grow with children. There should be a comprehensive relationship between learning and practice with no differences between initial training and its continuation in the field.

When analyzing the academic environment in most places, students have significant backgrounds where ethics can be used, but the stakeholders fail to implement the necessary measures to achieve it. Therefore, training ethics to accounting students in schools should no longer attempt to convince them that there are instances where unethical behavior can be used to solve situations. On contrary, they should raise the alarm concerning ethical activities in the accounting practice. It should focus on enhancing the analytical abilities in individuals and help them develop a sense of moral obligation in every act they perform. In regard to the given research literature, three primary methods of teaching ethics to account students have been pointed out as integrated within other classes, being a separate category. Accounting education systems have internationally been criticized for their inability to develop and nurture competencies that are fundamental for students (IFAC, 2006). Such skills are necessary when individuals face ambiguous, complex, and unstructured problems where reasoning is demanded. Consequently, the educators are recommended to employ alternative teaching mechanisms that will develop and nurture students’ critical thinking and ethical reasoning together with a series of competencies and attitudes.


Business Ethics and Corporate Social Responsibility


Business ethics can be defined as an underlying principle that produces action in preventing a major harm to others, while an individual or group of persons has an opportunity to act for their benefit. Such concept of a person’s moral standard is primarily based on the perception that can injure or severely affect others (Arnaudov & Koseska, 2012). Therefore, the premises of one’s moral judgment can serve as a function to blame and delay plans or activities that can create unfavorable circumstances for other people. People’s morality and ethical standards play a significant role in limiting selfish actions that could be harmful to others, even though they are considered one’s benefit (Arnaudov & Koseska, 2012).

In a business perspective, stakeholders are the people involved in most of the firm’s operations usually comprising of the government, owners, the customers, media, and the employees among other interested parties. They form the parties who are directly affected by the decisions made by people who are entrusted with the responsibility of managing and running activities in a firm. Lately, society has recognized ethics, quality of work life, and job satisfaction as the three fundamental factors that can be determined by the competitiveness of a company when it comes to giving benefits to stakeholders (Boddy, 2011). Thesis: The relationship between ethics and job position may be defined by the channels of instructions and hierarchy of authorities, rather than the age or gender of the individual employee.

Research Method

The primary underlying goal of the current study is to investigate and analyze business ethics regarding the job position, age, and gender of workers. It is also meant to foster the development of an ethics program from organizations, which matches the perceptions of workers on ethics. When considering employees from firms, a quantitative correlation study was employed where participants from the employees were selected to gather the needed facts. A questionnaire method was applied, where questions were issued to the employees of the target firms to fill at their convenience. Personal questions were asked to receive the responses and study the similarities that could foster understanding of the relationship between ethics and personality. They include the demographic details of the respondents regarding their age, gender, marital statuses, and job position. The perceptions of the individuals on business ethics in regard to personal, organizational, operational and situational characteristics, as well as characteristics of work were also inquired.

The data collected from the questionnaires was examined and critically analyzed to address the research questions driving the study. A quantitative correlation research design was fully employed to determine the relationship between business integrity and ethics with the individual’s job position, age, and gender of the respondents. It is a non-experimental design that does not review the effect and cause of relationship between variables. Alternatively, the correlation research design examines and analyzes the relationship between pre-identified variables. A survey questionnaire was used to measure the perspectives of the research respondents on their understanding of business ethics quantitatively. The quantity considered in the study is categorical, ordinal, and continuous in nature. A categorical variable represents classification groups or data which is represented by numerical values. The research questionnaire was composed of five parts. The first part included demographic questions for the respondent. It included information on age, gender, and position of the respondent in his/her organization.

The second part was Likert-type questions on individual perspectives regarding business ethics. Respondents were requested to rate according to their level of agreement on each statement considering the following scale: 1-denoted strongly disagree, 2-disagree, 3-neutral, 4-agree, and 5-strongly agree. The third part of the research questionnaire involved 13 Likert-type questions regarding individual variables, ten components for the operational element, 8 item for the organizational variables, seven components for the situational variables, and seven items for the characteristics of work. The scores of each respondent in every subscale were added to obtain the total scores for the perspectives on business ethics. After receiving the approval to conduct research in the target institutions, a letter of intent to continue the activity was sent to the firms’ Human Resource Management to confirm.

The Statistical Package for Social Sciences (SPSS) v19.0, which is the excellent statistical software, was used to group and analyze the data. The information was inputted to the statistical software and grouped into different components. For gender, males were recorded as 1 and females were recorded as 2. Regarding age, respondents from 18 to 27 years old were coded as 1, 28 to 40 years old were coded as 2, 41 to 55 years old were coded as 3, and 56 to 65 were coded as 4. Regarding position, respondent were classified as administration (1), production (2), quality control (3), sales and marketing (4), information technology (5), and others (6). Descriptive statistics was used to characterize the respondents, as well as the scores for the perceptions of participants on business ethics. Some of the demographic characteristics were presented as frequency and percentages, while the participants of business ethics knowledge were presented using measures of central tendency, such as the mean, standard deviation, and range.


The principal motive of such exercise was to examine the relationship between business ethics with personal characteristics, such as job position, age, and gender of staff in organizations critically. Employees from the target firms were considered as the study respondents. Specifically, the study focused on critically addressing each of the following research questions:

  1. To what extent, if any, does a relationship between staff perception of ethics and the age of employees in the firm exist?
  2. To what magnitude, if any, does a link between employee perception of values and their job position in the entity exist?
  3. To what magnitude, if any, does the relationship between employee perception of values and their gender in the organization exist?

A total of 70 respondents participated in the study and filled the questionnaires. Participants were classified based on their demographic traits, such as gender, age, and job position in the firms. Out of 70 respondents, 41 were males representing 58.6%, and 29 were females representing 41.4%. Based on age, individual respondents were classified into four open-ended categories: 18-27; 28-40; 41-55; and 56-65. 36 respondents, 51.4% were put together in the group of 28 to 40 years old, while 16 (22.9%) and 15 (21.4%) were grouped as 41 to 55 years old and finally 18 to 27 years group. Respondents were also grouped considering their current job positions in the firms in an attempt to see the relationship between age and positions as a determinant of ethics in business. Most of the study participants were in sales and marketing job positions (n = 18, 25.7%), while production department comprised of (n= 16, 22.9%). The results of the ANOVA revealed that there exists no significant difference between the perspectives of respondents on business ethics regarding their gender and age.

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However, there was a fundamental difference in the views on ethics with the job position held. Thus, no evidence was available that could deny or reject the first and second null hypotheses of the study. On the other hand, there was an adequate evidence to warrant rejection of the third null hypothesis. There was no major difference in the mean scores of organizational and operational characteristics, as well as characteristics of job variables between respondents who held diverse positions (p-values > .05). However, it was revealed that significant differences exist in the mean scores of individual employees (F (5, 69) = 3.973, p-value = .003). At the same time, situational variables (F (5, 69) = 3.443, p-value = .008) and the overall score for the perspectives on corporate ethics were based on job position (F (5, 69) = 3.578, p-value = .006). Thus, it can be concluded that there exists a significant relationship between the perceptions of corporate ethics and an individual job position in a firm.


The findings and the outcomes of the research suggest that there is a probability that the higher the job position an individual holds, the higher his/her perception on business ethics. Additionally, the results suggest that the ways of practicing business ethics in different situations primarily depends on their position in the firm. Past research shows that leaders in business entities are more expected to have ethical values to train their subordinates. It means that the higher the job position is, the higher the need for proper integrity and corporate ethics. The discussion on ethical leadership has significantly supported the above-stated outcome, as it has been stated that managers are more experienced in dealing with issues of an ethical dilemma as compared to junior staff. It is also emphasized that the managers need to give more support to their juniors on ethical behavior so that they could be used as a reference point in case an issue arises within the working environmental. Based on such finding, managers have a fundamental role to play in the development and nurturing of ethical culture in the firms.

The study aimed at examining facts and determines whether age, job position, and gender of an individual have any predetermined relationship to business ethics in an organization. Such findings reveal that job position that individuals hold in firms is the only identifiable independent variable that has a relationship to business ethics. Consequently, the researcher is limited to only using position variable as the fundamental basis for developing an ethics program model. Depending on such notion, business ethics and integrity are mostly believed to be a necessity for stakeholders to trust the firm. For the ethical culture of an entity to be developed and nurtured, managers have to develop a program of training the staff. An ethics program is an authoritative control system with purpose of publishing and outlining ethical values and the code of conducts in an attempt to discourage unethical acts. In structuring a proper ethical culture that the employees will adopt, the proposed ethics program must be designed to suit the perceptions of the staff members. Since age and gender have no definite relationship with ethics, the program should focus primarily on the hierarchy of job levels in the business.

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Business ethics should not be limited to the objectives, mission statement, and rules and regulations of the firm, but should have an expansive and pervasive influence on the culture, as well as the staff in general (Arnaudov & Koseska, 2012). To be genuinely ethical, corporations and their executives must make a conscious and indefinite effort not to participate in unethical, immoral, or otherwise illegal business dealings. Engaging in unethical activities is a choice the individuals makes based on the benefits they intend to receive. However, any positive outcome from a cynical move is as wrong as the action itself, and should not be taken into consideration when evaluating options. To implement such culture, the firm needs to have a structured framework containing a package of ethical principles and laws that allow it to function effectively.

Transparency is often the basis of corporate ethics (Boddy, 2011). Companies that want to be considered moral and ethical must also be upfront with their actions, as well as their business strategies. They should also try to emphasize such idea when it comes to human resource development. Commercial entities have a wider responsibility when it comes to taking care of their stakeholders, starting from their staff, to the investors and customers (Boddy, 2011). Business ethics is ranked based on the positions the individuals hold, and not their gender or age. It makes employees accountable for their actions according to who they report to, and from whom they receive their instructions and not their personal characteristics.

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