Unethical Accounting

Introduction

There are many examples of unethical accounting found in organizations that are not easily recognized until a discrepancy occurs. Organizations establish Ethics to protect the public from deceitful accountants as well as exposing organizations that hide information. Ethical behavior is essential in preventing fraudulent activities in order to gain public trust (Brenda & Duska, 2011).

An example of unethical practice is a dishonest and greedy church accountant who is trusted to run all money errands in a church. The accountant takes part of a church donation for his personal financial gain and records the rest in the financial books. He misleads the financial analysis so that he can obtain personal gains and, Purposely provides erroneous information in regards to church expenses to cover up his steal. Later on the treasurers financial book and the church accountant’s coincidentally contradict and they happen to overlook the reason. The church hires an auditor to check on the problem and as to why the financial books were not balancing. The two are adhered from work until the problem is resolved. The auditor finds the problem and the accountant get fired.

Why the situation is unethical?

The situation above is unethical since it brought about financial analysis discrepancies and lying about the donations and the church expenses, expenses to hire an auditor and shame. Accountants are financial reporter and their objectives are to the public interest (Brenda & Duska, 2011). They should provide information that will guide in management of an organization. With the church organization, the accountant’s financial statement shows the church is losing money, and the money is being lost to the accountant.

How does this affect the financial results of a company?

Organizations with strong ethics tend to maintain satisfaction and, influences positively on the financial results of the company. However lack of personal and professional ethics may lead to negative financial results such as for the above church accountant. Unethical practices put an organization into a precarious situation. Therefore, for an organization economic performance to be positive ethical behavior must be guaranteed (Brenda & Duska, 2011).

Reference

Brenda, D., & Duska, R. (2011). Accounting Ethics: Foundations of Business Ethics. (2 ed.).

New York: John Wiley and Sons.