Abstract: “A Study on “The pros and cons of Ethics in accounting practice in India” Introduction: All business dealings invariably involve finance and accounting. Everything that a business does has accounting ramifications. Most of the ethical issues in accounting are concerned with accounting statements. Internal financial reporting has to be honest, fair and reliable for an organization to perform effectively.
Most business failures are associated with either marketing failure, like failure in selling products or mismanagement in operations. Any of these above failures will always have financial implications.
When businesses are weakened due to bad debts or mismatched funding or under capitalization, companies are often tempted to falsify the accounts. It is here that the importance of ethics in accounting statements comes in. This paper discusses the importance of ethics in accounting. Statement of the Problem:
The accounting and auditing profession is now facing increased ethical demands due to the corporate scandals. Therefore, we think it would be interesting to investigate the level of ethical reasoning of accountants and auditors.
Objectives of the Study: The aim of the study is, from an Indian perspective, to examine the level of ethical reasoning among auditors and accountants when facing an ethical dilemma. Methodology: This paper gives a short presentation of the approach we have chosen for our study.
This is followed by information about our data collection, sample, survey and interviews. Finally, the validity and reliability of the study are presented. Theoretical framework: This part gives a presentation of ethics in business, ethics in accounting and ethical reasoning in decision-making.
The theory starts out from a broad perspective as a background to our problem for the reader to understand the issue before introducing the main problem; the ethical reasoning among accountants and auditors. Analysis:
In this part we combine the theoretical framework with the results from the empirical findings. The results are analyzed and discussed. Conclusion: Accounting is undergoing rapid transition. The changing environment has not only extended the boundaries of accounting but also created a problem in defining the scope of the ethical aspects. However all attempts have been made in this paper to provide a solid foundation covering ethics and also the crucial aspects on which accountants can build upon and achieve success.
References: 1. E John Larsen – 1992 – Modern Advanced Accounting, – Mc Graw Hill 2. ICFAI Research Bureau – December 2003 – Business Ethics and Corporate Governance, – IUP (ICFAI University Press) 3. ICFAI Research Bureau – September 2009 – Case Study in Business Ethics and Corporate Governance, – IUP (ICFAI University Press) 4. ICFAI Research Bureau – April 2005 – Accounting For Managers, – IUP (ICFAI University Press) 5. http://business-ethics. com/ 6. http://web-miner. com/busethics. htm