UNETHICAL PRACTICES AND BEHAVIOUR IN ACCOUNTING

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The editorial focuses on situations that might lead to unethical practices and behavior in accounting. Accounting provides viable information regarding the financial position of business organization. Such information thus becomes of much importance in making decisions concerning criteria for investment.

Unethical behavior and practices are found in accounting fields in many different forms. Such may be brought about by misleading financial analysis and statements. This is usually done by some people so as to gain personal benefits. Other individuals are prone to misappropriation of funds. Liquidity is a major malpractice in the accounting field. Exaggeration of revenue also contributes to unethical practices.

Some accountants provide erroneous information in regards to expenses. Such information is provided on purposeful grounds. Others exaggerate on the information of the value of corporate assets owned by a business organization. Unethical practices also results in scenarios where accountants provide erroneous information in regard to liabilities of the organization.

Fraud on securities also poses unethical behavior on accounting practices. Such includes manipulation of the value of securities of a company so as have personal gains. Bribery has been a major threat to the accounting field. This is whereby bribes are extended to the accountants so as to provide false information with regard to the required information. Mostly it is prominent among auditors. They are bribed so as to audit the financial position of the business organization in favor of personal interests of a certain individual.

Other malpractices in the field have been as a result of manipulation of the financial market. This is a situation where people set off trends aimed at increasing or decreasing the value of the stock market. Inside trading has also bred unethical practices in the field. The failure for an accountant to conduct an in-depth analysis when preparing and revising financial information also results in unethical practices in the accounting field. Unethical practices may also result in case of existence of conflicts of interests. This mostly occurs in a situation where an accountant is owed money or has a large share in a firm. Such an individual should not be allowed to prepare certain financial statements of the organization.

The Sarbanes-Oxley Act of 2002 was put into act to restore public confidence in corporate financial statements. The act has brought about many effects in the accounting field. It has facilitated the foray of governmental oversight into the accounting field. Any violators of the act are disciplined. It has facilitated emergence of standards for purpose of regulating auditing, attestation quality control and setting of ethical guidelines. It has ensured auditing independence and taking of disciplinary actions and procedures to those who violate it. The act has been instrumental in effecting internal control standards.

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