Understanding principles and challenges in ethical practices
BUSINESS ETHICS AND
ETHICS IN ACCOUNTING
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AGENDA HIGHLIGHTS
• Fundamentals of Business Ethics
• Overview of Ethics in Accounting
• Addressing Ethical Dilemmas and
Promoting Ethical Culture
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FUNDAMENTALS OF
BUSINESS ETHICS
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DEFINITION AND PURPOSE
“Standards of moral conduct, behavior and judgement in business”
Main Purpose
Help businesses and would-be businesses to determine what business practices
are right and what are wrong.
Special Purpose
1. Avoid double standards
2. Assess common practices
3. Standard or ideal for the conduct of business
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SCOPE AND IMPACT
Covers all conduct, behavior and judgement in business.
• Economic Impact
• Social Impact
• Environmental Impact
• Impact on Business Managers
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COMMON ETHICAL DILEMMAS IN
BUSINESS SETTINGS
Misrepresentation
1. Direct
2. Indirect
Over-Persuasion
Conflicts of Interest
Discrimination
Environmental Responsibility
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OVERVIEW OF
ETHICS IN
ACCOUNTING
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FUNDAMENTAL PRINCIPLES
• Integrity: Be honest and straightforward in all
professional dealings.
• Objectivity: Avoid bias, conflicts of interest, or outside
influence in judgments.
• Professional Competence & Due Care: Keep skills and
knowledge current to provide competent service.
• Confidentiality: Protect client information and only
disclose with proper authority or legal duty.
• Professional Behavior: Follow laws and avoid actions
that harm the profession’s reputation.
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ETHICAL FRAMEWORK AND PROFESSIONAL CONDUCT
IN ACCOUNTING
Conceptual Framework guides accountants in
ethical and independence issues.
Use the reasonable Exercise
Professional judgment is essential in applying
and informed third professional ethics to real-world scenarios.
party test judgment
Threats to ethical compliance include self-
Addressing Identifying interest, familiarity, and intimidation.
Threats threats
Evaluating and addressing threats ensures
adherence to fundamental principles.
Maintaining independence is critical in audits
Evaluating
Threats and assurance engagements.
Continuous re-evaluation is necessary as facts
Remain alert for new information and and circumstances change.
changes in facts and circumstances
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REAL-WORLD CASES OF ETHICAL
AND UNETHICAL ACCOUNTING
Unethical Accounting Scandals
Major scandals reveal how unethical accounting can lead to financial
crises and loss of public trust.
Consequences of Unethical Behavior
Unethical actions result in legal penalties, damaged reputations, and
economic harm to stakeholders.
Ethical Accounting Practices
Ethical firms uphold transparency, trust, and regulatory compliance to
maintain stakeholder confidence.
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CONCLUSION
Importance of Ethics Proactive Ethical Approach
Business and accounting ethics are foundational for Proactively addressing ethical challenges supports
maintaining trust and integrity within organizations. sustainability and long-term organizational success.
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