Academic journal article Economics & Sociology

Addressing Ethical Matters in Ukrainian Accounting Practice

Academic journal article Economics & Sociology

Addressing Ethical Matters in Ukrainian Accounting Practice

Article excerpt

Introduction

Nowadays professional ethics is rapidly gaining its importance all over the world in general and accounting ethics in particular. Financial scandals have shifted the focus from the technical competence of accounting professionals to their ethical norms and perceptions and caused an increase in the public interest towards ethics in accounting over the last decades (Melé, 2005). According to the findings of Baldvinsdottir et al. (2009) the image of accountant as seen in accounting software adverts has changed from responsible and rational person in the 1970-s and 1980s to a well instructed action man in the 1990s and then to a more hedonistic person in the 2000s. With years the image of accountants has undergone serious transformations, from the ordinary book-keeper to a highly qualified specialist in financial area. In their everyday work accountants face ethical dilemmas and find solutions to various complex situations, which are not always straightforward (Peursem and Julian, 2006), however, various factors including "combined influence of commercialism and regulatory response have led to a systemic decline in accounting's professional ideals and, as a result, an erosion of public trust" (Lail et al., 2017). The governing idea of making money has influenced the developments of accounting profession and harmed the overall image of accountants, who seem not having realized the ethical aspect of their work (Flanagan and Clarke, 2007) and its crucial influence on external users. Therefore, it is extremely important that accounting should no more be regarded as a technical tool only, with no connection to ethics (Mele et al., 2017) because nowadays, the reliability of accountants' work often depends on their ability to comply with professional ethical and behavioural norms which first of all should be treated as a moral obligation and maintaining high ethical standards (Caglio & Cameran, 2017).

All these developments and changes in rapidly expanding business world have made the code of ethics a vital tool to maintain the reputation of the accounting profession and achieve the true and fair view of their tasks and responsibilities and according to Claypool et al. (1990), good knowledge of such code may help accountants identify more clearly the dominant ethical code provision in each dilemma making it vital for professional accountants involved in international business to have a good and proper understanding of all the differences (Jakubowski et al., 2002). However, it should be noted that Velayutham (2003) revealed that in some cases the code may focus more on technical competences and compliance with accounting standards than on the moral responsibility for external users. While findings of Pflugrath et al. (2007) indicate that the existence of code of ethics had a positive impact of the judgments of professional accountants, the studies of Baker (2014) revealed that "ethical discourse of the profession can be found more in the self-forming practices of the profession rather than its code of ethics". In general, it can be stated that code of ethics serves as the framework for making ethical decisions, containing common rules varying across countries.

While the importance of the code of ethics for professional accounting is growing and gaining popularity, little is known about the recent developments in this regard in Ukraine, whose business environment is still considered as to be in transition. The country regained independence in 1991, since then it strives to establish a strong market economy, however, with little success so far. A significant constraint for the economy is the unstable political shifts, therefore, under such uncertainty the businesses are mainly struggling to survive concentrating on profit and not on the moral values or social responsibility. Ukraine has fully recognized The Code of Ethics for Professional Accountants and adopted it in 2004. It was translated and localized by the Audit Chamber of Ukraine in collaboration with the Federation of Professional Accountants and Auditors of Ukraine. …

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