Accounting fraud and corruption issues in the societyhas become prevalent. According to the Committee of Sponsoring Organizations(COSO), the number of fraudulent cases continued to soar high in between theyear of 1997 and 2007. While accountants are expected to follow the ethicalguidelines established by the accounting bodies, certain cases are still committeddespite having this customized code of conduct.
Accountants are a public server that is usuallylooked upon as a business’ physician (Berger et. al., 1912).
Most of the time,they provide and examine timely financial information of an economic entity,produce records and a summary of business transaction and interpreting theresult thereof to affect the business’ decision-making. With that being said,they are required to work in an ethical manner in order to nurture and maintainhigh professionalism in their line of career (PICPA). In addition, anaccountant following the ethical codes maintains public trust and shows fairnessand honesty in work.Pakaluk and Cheffers in their text UnderstandingAccounting Ethics stated that as a profession, accounting is in many respectsthe most altruistic and ethically demanding of the professions.
Finance andaccounting departments in industries are taking ethical considerations to beextremely important (Vickers, 2005 as cited in Mathenge, 2012). So as to whatSmith and Smith (2003) have .stated, a well run business or profession musthave high and consistent standards of ethics in order to stand fast and tostand the test of time. However, fraudulent cases are still verging in somebusiness entities. Take for example the greatest corporate fraud case reportedin the American history, Enron Scandal, caused one of the top audit firms inthe United States, Arthur Andersen, to close forcefully due to the deliberativemanipulation of the business’ huge debts in the balance sheets. The scandalbrought into questions the accounting practices and activities of manycorporations in the United States.
This gave rise to pass the Sarbanes-Oxleyact in the United States in 2002 to protect investors from corporatemisinformation.While other accountants rigorously commit fraud,others play a major role in fighting against it. IFAC CEO Choudrey said thataccounting profession is an important part of the cure in corruption andfraudulent acts.
In order to accomplish it, greater adoption of high-quality internationalstandards on financial reporting, auditing, and ethics are required.With the above mentionedissue and central idea, the main objective of this research is to determine therole of an accountant in fighting fraud and corruption in society and thesignificance of abiding in the ethical standards and principles of theaccountants in their profession. The purpose of this studyis to let the accounting students, as early as possible, to acquire and learnthe ethical guidelines in order to be far-flung from committing such issue orcases in the near future.