Managerial Accounting Ethics are Required to Combat Fraudulent Activities in The Business
Ethics in the managerial accounting primarily refers to the practice of applied ethics, study of moral values and the steps of judgments as they apply to accountancy in the business. It is form of professional ethics that was introduces in the field of accounting by Luca Pacioli, and further expanded by the groups of the government, independent companies and other professional organizations. These ethics are taught at the level of higher education. Many companies are also teaching managerial accounting ethics during training to the accountants and auditors.
The attention toward the ethical standard has been drawn due to the diversification in the accounting services and some latest corporate collapses. At some point accountants have to take a decision whether their decision is really ethical or not. And when the collapses in the business have been widespread, we need some critical rules and regulations to combat and prevent the fraudulent accounting in various accounting organization. In this regard, the government has also developed the some regulations and remedial ethics to improve the ethics in accounting profession. Confidentiality and competence are necessary attributes of the accountant professionals to ensure that you must keep the information confidential unless the authorized or legally required to disclose that information. There is the matter of credibility which decides when one must communicate information.
There could be an ethical issue that comes in the organization and one could encounter the unethical behavior and practice. So it is the duty of such professionals to follow the organization’s policy to resolve the issue. It also suggests to whom you have to communicate in case the unethical situation arises. The accounting job carried out by accountants and auditors requires a high level of ethics. The shareholders and other users of the financial statements rely on the yearly financial statements of a company by using the appropriate communication network while taking decisions.
The knowledge of ethics helps accountants and auditors to overcome the ethical issues. Many countries have different enforcing accounting laws. In the United States, there is Accounting Standard Board (FASB) that determines the purview of the managerial accounting ethics. One can find certain framework that has been outlined specifically to combat unethical practices in the business.