Hi-Fong 1
Robert Hi-Fong
Professor Tammie Neeley
Accounting 2010
October 22, 2014
Personal Ethics in Accounting
Personal ethics should always be a principle applied, and that go hand-in-hand with
financial accounting. As a professional accountant of a large firm, accountants are constantly
faced with opportunities to create discrepancies for any sort of personal monetary gain. Let’s
evaluate how personal ethics is in fact the best approach to financial accounting and the
consequences in which the lack of ethics could be devastating for an individual.
Financial Accounting contains Internal Control Procedures such as: smart hiring practices
and separations of duties; comparison and compliance monitoring; adequate records; limited
access to both assets and records and proper approvals. (Harrison , 2014).
These procedures are set in place to protect the company and accountants within the
company. Accountants nonetheless have imminent access to financial records and other internal
access to the ongoing financial activities of a company. Accountants are constantly around the
opportunities of altering any financial records to benefit one’s financial situation.
Ethics and morals are vital in a professional accounting situation for the mere fact that the
consequences of any immoral or unethical endeavor could lead to a great deal of severe lawful
punishments; not to mention, the personal disposition within employers, family and friends.
Hi-Fong 2
Throughout my time as a student, most of all the business-related classes emphasize the
fact of personal ethics being vital for a successful career. This has always impacted the
importance that it really has on the well-being as a future professional in the work force.
Most people are taught at a young age the differences between what’s right and wrong, as
we develop throughout our teenage years and adulthood, it is really predominant on what we do
as individuals and the environment we surround ourselves with, that will help us define that
cognitive thinking more and more in our lives. Personal ethics is something that is developed
since a young age and it’s carried out throughout our lives through the choices we make.
I work for an office staff at a whole-sale supplier to the food industry. I’ve been assigned
to the petty cash box for small cash transactions on a day-to-day basis (small purchases of
supplies, change for customers, etc.) It has always been a matter of self-integrity and realizing
that nothing is worth my job altering the petty cash records for a personal monetary gain. Nor
would it be explaining such situation to authorities if charged in the event that an unethical
situation would take place.
To me, personal ethics is much more than the difference between what is right or wrong;
to me, personal ethics is a higher level of self-respect, integrity and holding myself to a higher
standard. When faced by opportunities of creating financial discrepancies in the duties we are
assigned in at any professional level, we should always do what it is ethically the correct thing to
do. Not only to avoid any kind of lawful trouble, but doing ethically what is correct can say so
much about an individual; that reputation will carry always with you, even from one work place
to another.
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The popular accounting fraud of Enron is a prime example as to why financial accounting
should always have the ethical approach and highest standard for the professional level in which
it should be executed. Four-thousand employees lost their jobs and many of them their live
savings; many people also lost large amounts of investor stocks’ money and their lives were
immensely affected by this scheme.
“Texas-based Enron collapsed in 2001 after revelations of fraudulent accounting
practices. Several former executives were convicted and sentenced to prison terms on charges
relating to the accounting scheme. The fall of the company cost 4,000 employees their jobs and
many of them their life savings, and the collapse led to billions of dollars of losses for investors.
Newman said that the firm hopes to make a distribution by the end of the year. "The order
approving the plan of allocation is a big step toward that goal," he said.” (Frayter, CNN.com,
2008).
In summary, we should all apply great ethical manners to any position or situation that
we may come across when handling any accounting, whether it would be filing taxes, preparing
financial statements for an employer or simply keeping an accurately reflective record of petty
cash duties. We are not only disrespecting and affecting ourselves, but potentially affecting many
other innocent individuals around us when ethics is not our upmost principle to follow in any
accounting involvement. We all have come to financial burdens at some point in time within our
lives; the solution simply does not rely on a “simple fix” if we commit any scale of financial
fraud. If we chose to ignore integrity and ethics behind future accounting involvements; the
consequences are always much greater than the temporary fix of unethical financial practices.
Hi-Fong 4
Work Cited
Harrison, Walter T., Charles T. Horngren, and C. William Thomas. "Chapter 4." Financial
Accounting. 10th ed. N.p.: n.p., n.d. 200-02. Print.
Frayter, Karina. "Enron Investors to Split Billions from Lawsuit." CNN. Cable News Network, 9
Sept. 2008. Web. 22 Oct. 2014.