Litigation, Censures, and Fines

Litigation, Censures and Fines
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Litigation, Censures and Fines
Importance of Ethics in Accounting
The accounting role is considered essential in any firm due to its responsibility for financial matters. As a result, ethics and professionalism are mandatory to ensure that financial information released is always accurate, transparent, and reliable for all stakeholders (Ferrell et al., 2021). As a professional occupation, accountants are required to always adhere to best practices and relevant codes of conduct, thus maintaining trust and integrity for themselves and the organizations they represent.
In accounting, ethics promote compliance with legal requirements and any financial regulations of the industry concerned. In most countries, any form of violation of such regulations can have severe consequences for the firm, including hefty fines and potential lawsuits from affected stakeholders (Metcalf et al., 2019). As a result, upholding ethical standards maintains the relationship with regulatory bodies, investors, and clients, who are the most essential to the organization.
Apart from that, upholding ethical standards further improves stakeholder trust in the organization. As the custodians of all financial instruments, accountants hold a fiduciary duty to the stakeholders and are required to be trustworthy and honest in their dealings (Carnegie et al., 2022). This means that any misconduct can have a long-term effect on the stakeholders who rely on the reliability of the financial information provided to them. Maintaining ethics in such dealings ultimately promotes a positive relationship between the firm and its stakeholders.
Lastly, reputation and brand image are essential for institutions in all sectors. Consequently, ethics in accounting can assist in maintaining a positive brand that can attract more potential investors, thus strengthening the organization's financial position in an industry (Ferrell et al., 2021). A competitive advantage can propel a company to further success by attracting top talents and new customers that are drivers of growth. Therefore, maintaining such ethics in accounting can assist organizations in achieving their goals.
Applying Ethical Principles and Professionalism to the Case at ACC Karparts
In this case, the attempt to manipulate the company's revenue for the year in order to gain bonuses would be a direct violation of ethical principles and standards of accounting. The most important principles that would apply to this case include integrity, objectivity, and competence.
With regard to integrity, Quinn tries to convince the accountant of the possible benefits that would be accrued with the change in revenue for the year. However, the accountant remembers their fiduciary duty to stakeholders, which requires honesty and transparency in reporting (Metcalf et al., 2019). As a result, the refusal to manipulate the revenue, despite the possible personal gains to be made, demonstrates the principle ...