1- Class, it seems like compliance gets tougher and tougher and there are many issues with ethics. Why do you think these two areas are such a focus these days?
Accounting ethics simply refers to the standards of right and wrong that must be applied in the accounting department. According to Velayutham (2003), the department must maintain a professional code of conduct that will assist the accountants to uphold ethical behavior. It is this essential for accountants to follow ethical principles and perform all their duties in the most impartial way because failure to do so might result in the ethical and criminal violation. The majority of the accountants have failed to comply with these ethical standards as a result of ranges of factors including intense pressure from the management, unwillingness to report any form of accounting violation in addition to possible ignorance of accountants of ethical principles. Failure to comply results into ethics violation and the accountant might lose his job or subjected to any other punishment. Accounting Compliance is primarily focused on the accounting department to meet their overall financial reporting requirements as outlined in various countries where they operate (Alm & Torgler, 2011). Compliance will help prevent possible violation of established rules and regulation which might affect the normal operation of the company hence the need for the accounting department to comply with established rules and ethical principles strictly.
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1-Challenges in Accounting Department
It is evident that accounting department has undergone many changes such as accounting information system that further possess various challenges related to implantation and updating of the information system. For instance, real-time reporting will allow accounting department to understand overall corporate performance better and gain confidence. To meet current stiff competition, there is the need to have more updated information that will enable the accounting management to adapt to diverse opportunities rapidly. Real time accounting technologies will help solve this including business process management, cloud computing, in addition to business intelligence (Romney et al., 2006).
2- The challenges facing accounting departments within organizations are unqualified accountants and online technology
The unqualified accountant has been established to pose a major problem in the accounting department. The majority of the organizations have failed to focus on accountant’s qualifications and this, in the long run, has affected their overall operation. It is evident that the unqualified accountants have a narrow skill set, but most of the organizations have continued to use their services (Matthews, Anderson & Edwards, 1997). In most instances, these corporations often take a greater risk regarding receiving bad advice which often reflected badly on the entire profession resulting in the negative effect on the growth and development of the business. Additionally, unqualified accountants might impact negatively on the trust and reputable status that the accounting organization has been able to earn for many years.
References
Alm, J., & Torgler, B. (2011). Do ethics matter? Tax compliance and morality. Journal of Business Ethics , 101 (4), 635-651.
Matthews, D., Anderson, M., & Edwards, J. R. (1997). The rise of the professional accountant in British management. The Economic History Review , 50 (3), 407- 429.
Romney, M. B., Steinbart, P. J., Zhang, R., & Xu, G. (2006). Accounting information systems . Pearson Education.
Velayutham, S. (2003). The Accounting Profession’s code of Ethics: is it a code of Ethics or a Code of Quality Assurance?. Critical Perspectives on Accounting , 14 (4), 483-503.
