The Corporate Governance Debate on Professional Ethics in the Accounting Profession

Abstract

This paper focuses on the particular case of professional ethics in the context of the accounting profession. After briefl y discussing recent events that made us reconsider our understanding of corporate governance, accountancy and ethics, we attempt to delimit the state of the art by looking at ethics from the accounting profession's perspective. When aiming to clarify professional ethics, we closely analyze integrity based on the latest developments undertaken by European professional bodies. The fi ndings are used in identifying ways to contribute to the endeavor of aligning the profession's performance with society's reasonable expectations.

Professional Ethics in Accounting as Assessed by Managers of Economic Units

“…One of the professional groups subjected to ethical judgment are people who work as accountants. Responsibility for keeping books of accounts and presenting reliable reports is inextricably linked with professional ethics (Bonaci et al, 2013;Wiśniewska, 2014), described in the 'Code of Professional Ethics in Accounting', which was developed by the Ethics and Professionalism Committee of the Accounting Profession of the Scientific Council of the Accountants Association in Poland. This code constitutes a set of ethical, moral, and professional principles and values that should be met by persons dealing with accounting and related fields, as well as attitudes and behaviours expected from people performing public trust professions, which include accountants, financiers, and related professions.…”

Diminishing Role of Accounting Information for Investment Decisions

“…Today's accounting information is seen as not adequately reflecting the change of economic and operating conditions of companies. Moreover, the accounting profession's credibility has been significantly hindered by a series of ethical failures [1]. At the same time, reliable information on companies plays a key role in business management and financial planning not only for investors, but also other stakeholders – suppliers, lenders, employees, customers, and the public.…”

“…Panel A) presents estimates of regression(1) for each of the years, 1993 -2011 (1993 is "lost" due to the first differencing of normalized earnings). The sample contains 105 firms per year with data in each of the 18 years examined.…”

Several Conclusions from Research of Insolvency Cases in the Czech Republic

“…The outputs of these companies bring forth certain interesting ndings, provided their data is based on a faithful representation of economic reality (see e.g. Bonaci et al, 2013). Nevertheless, these are in fact mostly nalizations of available statistical outputs to a more analytical level than a mere publication of numbers.…”