Due to the very nature of the profession, business ethics in accounting is an issue that is taken very seriously. The emphasis on business ethics in accounting is largely due to the premium placed on the outcome of the services performed by accountants in their various capacities. Apart from the fact that accountants are expected to be eminently qualified in order to provide the most efficient service to their clients, they must also exhibit a high moral and ethical code when handling other peoples’ finances. Another reason why business ethics in accounting is vital is due to the fact that individuals and organizations use their final reports and recommendations as a basis for making decisions, which may affect them in a positive or negative manner.
An example of the application of business ethics in accounting can be seen in the area of due diligence in respect to handling the financial affairs of a client. For example, a public figure who makes a lot of money usually engages the service of an accountant or an accounting firm, depending on the size of his or her portfolio. Where the accountant fails to exercise the necessary vigilance and diligence in respect to such a client’s finances, he or she may fail to properly reconcile the client’s taxes, leading to allegations of missed back payments of taxes. Issues regarding mixed tax payments are often taken seriously and may even damage the reputation of the public figure, even if it was not intentional on the client’s part. As such, ethics in accounting address such matters, requiring a high level of dedication from accountants in respect to the finances of their various clients.
Most professional careers, such as medicine, law, engineering and accounting have a professional code of ethics that applies to all members of the profession. The reason for such ethical standards is as a result of the highly sensitive nature of the professions and the danger for the abuse of privileges associated with the professions, including accounting. As part of a general rule of ethics, accountants are expected to maintain a high level of integrity as well as objectivity in relation to the conduct of their profession. Just like lawyers and medical practitioners, they are also expected to keep the confidence of their clients, meaning that they cannot reveal the affairs of their client in any way, with limited exceptions. An example of such an exception is when a court subpoenas the records.