Accounting Ethics: A Practical Guide for Professionals

Accounting Ethics: A Practical Guide for Professionals

Accounting Ethics: A Practical Guide for Professionals

Accounting Ethics: A Practical Guide for Professionals


This book addresses the specific issues that accountants are often obliged to resolve in the context of their work. The authors take a case-based, pragmatic approach to the subject, examining "real life" dilemmas often faced in the practice of accountancy. Each chapter investigates a specific issue, such as whistle-blowing or the implications of independence, and includes several case studies that put the theoretical analysis into practical perspective. Throughout, the authors seek to go beyond the formal codes of professional behavior to confront the subtle personal, corporate, and governmental pressures that make ethical decision making difficult.


"Does your accountant owe his loyalty to you or to the law?" This question was posed in Newsweek during the summer of 1989 in response to an emerging court case that involved a St. Louis CPA's relationship to his client, a pizzeria owner. From 1982 to 1985 the CPA performed auditing and other tasks for the pizzeria owner and received more than $50,000 for his services. At the same time, the accountant was secretly giving details of his client's financial life to IRS special agents. The pizzeria owner was eventually indicted on charges of tax evasion. His attorney argued that accountants should respect client privacy and sued the CPA in federal court.

The attorney argued that "a client has a right to feel he's getting undivided loyalty and confidentiality from his accountant." Many believe that codes of professional conduct in accounting--including the American Institute of Certified Public Accountants (AICPA) code-- sustain the attorney's contention. The prosecutor in St. Louis disagreed and stated that "the accountant has a moral and legal obligation to turn over information.''

Conflicts of value, disagreements about codes and regulations, and dilemmas of loyalty are encountered every day by professionals. Among other duties, accountants are pledged to truth telling and have clear responsibilities to exercise good judgment and honesty in their professional work. But what happens when professional duties come into conflict with moral principles? And how, indeed, are accountants to sort out such problems, no less resolve them?

Accounting Ethics faces such issues head on. This book does not argue that there are absolute rules of conduct for accounting professionals that will answer all dilemmas. It does, however, claim that identifying moral conflicts, thinking them through, discussing them with colleagues and others, and utilizing the tools of ethical analysis are useful, in fact . . .

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