We will write a custom Essay on Case Study: Sue’s Accounting Ethics specifically for you
301 certified writers online
Introduction and background
Accountants and auditors are guided by international accounting standards that require them to uphold high levels of professionalism and maintain professional ethics and values as they undertake their businesses.
In the case of Sue, she encountered an unethical practice in a clients books but she got minimal support from his counterparts’ employees and team members, other than having raised the issue, she noted that the practice has been ongoing and was unlikely to come to an end soon. The situation on the ground was seen to be acceptable by both the audit firm she was working for and the client; actually it can be seen as a compromise of the two firms to defraud the government of taxes payable (Wheelen, & Hunger, 1998).
Accounting and auditing information is used for decision making by internal and external users like managers, shareholders, government, potential investors, investors, capital lenders among others. This raises the need for accountants to act with high level of professionalism and uphold acceptable accounting ethics.
Realizing this important role played by accountants, international and national accounting bodies have developed accounting professional ethics which their members are expected to respect always. The case of Sue was one that undermined the need for accountability, integrity and professionalism in the sector, the auditing firm was promoting the need to be unethical in the efforts of maintaining their customers.
The statements that were made by Bill and Mike shown clearly that the organization was not valuing professional ethics and they suggested that they have been operating in such a manner for a long period of time. On the other hand, Paul was of the opinion that the practice prevailed in the company as a way of maintaining its customers. This is unethical and unacceptable to both the company and the profession.
Auditors report is used by both external and internal customers; international reporting standards require their members to act in a professional manner and uphold integrity.
When reporting, he is expected to report the case as it is and maintain an ongoing concept of accounting. He should be honest and manage finances effectively. The three bodies emphasis that an accountant should be acting for the interest of the general public and thus he has a task to give the true standing of a company (The chartered institute of management accountants official website, 2010).
Sue was facing a challenge in harmonizing her employers demands and the demands of the company; in such a case, the young auditor was at a deadlock not knowing the right approach to issue she was facing.
Bill and Mike were auditors who have had experience in the organization and seemed to have been socked to the ills happening in the firm, they were willing to collaborate with unethical and unprofessional practices in the organization for the benefit of the company. They feared that if Sue was to disclose the situation, then they would fall into trouble.
Paul, a partner in the organization was of the opinion that the procedure would be allowed as it was a sure way that they would keep their business life and kicking; the practice was not only seen in the company that Sue was auditing however it had been a situation that was duplicated among other companies.
The main issue that is coming from the case is the evil and unethical situations that are in the country more so in the accounting field, auditors have lost their objectivity and seems to be supported by their firms to expand their unethical behavior (Atrill & Jenner, 2009)
The issue that Sue has to deal with is how she is going to play a middle ground without hurting her career and still maintain professionalism and ethicality in her actions as demanded by the professional ethics she is practicing in.
The best thing to do is to let the cut out of the bag to both the client company, and the auditing firm, she should take it as her own role to clean up the mess in the profession more particularly in the auditing company.
She should not worry that her job will be lost but she should stand by the professional ethics and professionalisms. In the event that the case has not been resolved at her level, she should be willing to inform the country’s accounting and auditing body as well as the taxation authorities. This is likely to yield to higher chances of clean up in the sector.
Get your first paper with 15% OFF
She should let other tea players to understand the role they play in the business world as well as the need for proper taxation in the country (Bill & McKeith, 2009).
The case of Sue presented how auditors find themselves in a deadlock where they are supposed to either protect their professionalism and ethical behavior or their own careers with the companies they have secured an employment. However, when faced with a challenge, auditors should remember that they have a career and profession to protect, thus they need to have high levels of confidence and integrity that they can stand against unethical behavior.
Atrill, M. H. & Jenner. R. (2009). An Introduction: Accounting 4. Boston: Pearson Education Inc.
Bill, C. & McKeith, J. (2009). Financial Accounting & Reporting. New York: McGraw-Hill.
Wheelen, L., & Hunger, J. (1998). Strategic Management and Business Policy: Entering 21st Century Global Society. Massachusetts: Addison Wesley.