Accounting,corporate governance and ethics Essay

Accounting,corporate governance and ethics - Essay Example The accounting profession has evolved over the years and today is viewed as making big contributions to inspiring investor confidence in various enterprisesThe tedious accounting profession is a sensitive undertaking especially when it comes to certifying to accuracy Because of this sensitivity, the accounting profession had adopted a professional code of ethics for all members. People however believe a lot of reformist agenda had been thwarted by the vested interests of pro-corporate public policy makers (Conrad 313). The chief ethical difficulty that faces most accountants today is what constitutes a full and timely disclosure (Duska & Duska 7). The accounting profession has seen a lot of corporate scandals which had spoiled its sterling professional image in which countless individuals lost their lifetime savings. It has been as a reaction to these scandals that laws were passed to strengthen the standards of the profession to avoid repeating the same mistakes and as additional sa feguards for investors. Regulators, lawmakers, accounting professionals and policy makers had scrambled to draft these new rules and regulations to impose higher standards in the profession but ultimately, it is the individual’s conscience that will preclude any scandals or lapses from happening again. Management boards and executive committees likewise have spent considerable time into the deliberations of formulating their own set of corporate standards and code of ethics to prevent accounting scandals from occurring in their firms or in any part of their organization. An aim of this paper is to explore the accounting profession as it is today compared to previous years. Discussion Accounting is one of those professions in which utmost trust is reposed on those who practice it as a profession (as source of income and livelihood). It is no different from client- lawyer engagement or a patient-doctor relationship in which confidentiality is paramount. As a profession, account ing is charged with the task of making sense out of numbers and it is for this capability for which the various users of financial information rely on for their judgment. It is therefore very crucial that the information contained in financial statements can be relied upon for their timeliness, integrity, usefulness, relevance and accuracy. Stricter government regulations regarding corporate financial reporting has removed some of the more immediate temptations and threats to the integrity of financial statements. However, self-regulation of the industry is also vital in this regard and to educate members of the profession regarding their sacred duty to make the financial figures credible to the public. The most significant reform to ever come about the recent corporate accounting scandals that involved Enron and others is the Sarbanes-Oxley Act of July 30, 2002. It is a very significant piece of legislation in one respect: it now requires corporate executive officers to also sign o ff on the financial documents prepared by third-party auditors. What this piece of law means for the accounting profession and the executive boards of publicly-listed companies is both entities must now certify as to the accuracy of the data as contained in the audited financial statements. Previously, management boards and executive committees of affected companies can wash their hands off any audited financial documents if there are discrepancies contained in them but the Sarbanes-Oxley Law (or SOX for short) had changed that cavalier attitude. For the first time ever, not only are the auditing firms to be liable for failures to detect any accounting anomalies as they go about their task of auditing, the management people of the audited entity are also equally liable. The new law had rightly put some pressure on