Importance Of Accounting Profession

Importance of The Accounting Profession
Accounting is important in business so that management, creditors, investors, potential investors and other consumers of a company’s financial data can make informed decisions. Management of a company uses financial data . Creditors, investors and potential investors review financial documents to determine whether they will want to give loans, maintain, invest more or sell their stake in the company. Companies also calculate their taxable income and income tax expense by completing financial documents.
What is Ethics?
Ethics refers to a code or moral system that provides criteria for evaluating right and wrong. Ethics are different from morals, however one’s morals play an important role in choosing

Incorrect or falsified numbers can cause severe economic and legal consequences. Fraudulent accounting is disastrous for all involved. According to Kedia and Philippon (2009), “The market-adjusted return over the three days surrounding the announcement of a restatement is associated with an average return of -10%” (p. 2169). The case of the Enron scandal, which is discussed later in this paper, demonstrates this loss on stock prices. A decline of the stock price from above $30 to less than $1 occurred between October 16, 2001 and November 28, 2001 after the company announced a restatement to earnings for the 1997-2001 periods (Kedia & Philippon, 2009, p. 2169). The company and employees who are involved in fraudulent accounting practices can expect lose their jobs, face civil suits and fines as well as criminal charges for fraud that carry penalties of lengthy jail

Identify the alternative courses of action.
5. Decide the best course of action consistent with the norms, principles and values.
6. Evaluate the consequences of each possible course of action
7. Reach a decision as to the appropriate course of action.
These steps can help accountants evaluate ethical dilemmas to ensure they make the correct decisions. If it is appropriate and possible, an extra step of discussing the alternatives with another person is included before reaching the decision. Step one begins with determining who, what, where, when and how so that there is no uncertainty about what is under deliberation. Step two involves examining the facts while thinking about the ethical issues at hand and who will be affected. The third step is to identify the related norms, principles, and values. This involves inserting the decision in a social, ethical, and professional context. In the fourth step, every alternative course of action is identified with appropriate or inappropriate outcomes. In step five, the alternatives are examined against the norms, principles, and values identified in the third step. This makes it possible to see which decisions agree with the norms. In step 6, the consequences of each alternative are considered. Lastly in step seven, the decision is made and