Intro to Accounting Ethics

Presentation

•

Computers

•

12th Grade

•

Hard

Steven Howard

Used 1+ times

FREE Resource

58 Slides • 15 Questions

Multiple Choice

The main principle of GAAP is

competitiveness.

consistency.

unbiased.

ethics

Key Terms

▪ integrity
▪ objectivity
▪ independence
▪ competence
▪ confidentiality

Ethics in the
Accounting Profession

SECTION 29.2

Key Principles
Accountants should follow certain principles including:

▪ integrity
▪ objectivity
▪ independence
▪ competence
▪ confidentiality

Ethics in the
Accounting Profession

SECTION 29.2

Integrity
Integrity requires that accountants choose what is right
and just over what is wrong. To operate with integrity, an
accountant should ask these questions:

▪ Is this what a person of integrity would do?
▪ Have I made the right decision?
▪ Have I maintained the spirit of ethical conduct?

Ethics in the
Accounting Profession

SECTION 29.2

Multiple Choice

Which of the following shows integrity?

Sally accidentally dropped her math binder.

You look at it and walk away.

You pick it up and give it to Sally.

You step on it and keep on walking.

You ignore the math binder on the floor.

Multiple Choice

Integrity is when you do the right thing when no one is watching.

True

False

Multiple Choice

Which of the following is NOT an example of integrity?

Keeping promises.

Going back to a store and paying for something you forgot to pay for.

Giving back a bracelet someone dropped.

Gossiping

Objectivity
Objectivity requires accountants to be impartial, honest,
and free of conflicts of interest. They should not be
influenced by personal interests or relationships with
others.

Ethics in the
Accounting Profession

SECTION 29.2

Multiple Choice

The manager of the business wrote on a piece of paper that utility expenses incurred by the business were paid the amount of P2,222. The bookkeeper asked for the invoice evidencing the payment before recording it in journal.

Objectivity

Materiality

Money Measurement

Going Concern

Independence
Accountants who audit public companies must maintain
independence; the CPA should not have a financial
interest in the company.

Ethics in the
Accounting Profession

SECTION 29.2

Competence
Competence refers to knowledge, skills, and
experience needed to complete a task. Accountants
must complete only those services that they are
competent to provide.

Ethics in the
Accounting Profession

SECTION 29.2

Multiple Choice

The researcher should be fully equipped with research skills when conducting the study.

competence

confidentiality

legality

openness

Open Ended

Read the following scenario. Identify and discuss behaviors that you believe might violate the key principles of conduct for accountants.

In your new position as an accounting manager with Triple B Markets, you supervise three staff

accountants: Jennifer, Marcus, and Ing. You become aware of the following situations:

• Jennifer, a new employee, has never worked as an accountant but scored high marks in her college

math classes.

• Marcus often records payments of utilities as assets instead of expenses because he wants to show a higher net income for the business.

• You overheard Ing talking with a friend on the phone about the payroll details of the company.

Type response here

Open Ended

What qualities are involved with the principle of objectivity?

Type response here

Confidentiality
Accountants who work with information in the course of
work must maintain confidentiality. This information
should not be used for personal gain.

Ethics in the
Accounting Profession

SECTION 29.2

Multiple Choice

what happened in the ENRON scandal

the company cooked the books sand pulled of shady accounting tricks

the company donated its funds with its custumers

lost of income to the shareholders

Multiple Select

how did ENRON trick people to invest in their stocks

used mark to market accounting( recognizing profit that is not profit)

they put their liabilities in other side companies

auditors were bribed

all of the above

Multiple Choice

what rules are made after the incident

All auditors have been fired to prevent future scandals

auditors have stricter rules and CEO and CFO have to certified statements to prevent backing out

All energy companies have put to shutdown for inspection if other energy companies are included

Multiple Choice

When employees were being told to buy shares, the officers of Enron were ______________________.

retiring

selling their stock

making hundrends of milions

all the above

Accounting Fraud at the Turn of

the Millennium

▪ Enron

❑ Meltdown in mid-October 2001

❑ Employees lost over a billion dollars’ worth of stock

❑ Stockholders lost billions of dollars as stock price fell

from $60 per share to below $1

❑ Debt holders about to lose more than $3.9 billion

▪ WorldCom

❑ Started in 2002—topped Enron’s bankruptcy

❑ Failure by management and senior accounting staff

and its internal control system

▪ Failed checks and balances by gatekeepers

1-5

Explanation Slide...

The Sarbanes-Oxley Act (2002) is a legislative response to corporate accounting scandals, such as Enron and WorldCom. It was enacted to improve corporate governance, enhance financial transparency, and restore investor confidence. The act introduced various reforms, including stricter financial reporting requirements, increased penalties for fraudulent activities, and enhanced internal controls. While it does address penalties and internal controls, its primary purpose is to address corporate accounting scandals.