Exploring Professional Ethics in Accounting Dissertation

Exploring Professional Ethics in Accounting - Dissertation Example This paper illustrates that the number and the fiscal enormity of the corporate scandals and collapses of the late 1990s and early 2000s have inspired numerous theories about what went wrong, where the fault lies and with whom. Business points to the accounting profession whose mission is to audit the financial presentations of management and issue an opinion about the relative fairness of that presentation as whole. The accounting profession has pointed to the changing business environments and the conflicting demands that it has placed on the profession. The accountants have evolved from their role as the â€Å"watchdog† employed by ownership in the 19th century British corporate model to their own multinational corporations themselves representing the independent audit and attestation role, the tax advocacy role, a management consultative role, as well as the provider of many primary accounting and reporting services for clients. The pressures of business and market demands on independent public accountants as well as the conflicting roles that they are called upon to perform has led the profession to defend itself with a sorry â€Å"my clients made me do it† defense. The United States government has responded to these corporate scandals with the passage of the Sarbanes-Oxley Act of 2002. This Act contains the most significant reformation of accounting and public reporting standards since the Securities Act of 1933 and the subsequent Securities Exchange Act of 1934. (Thomas, 2004). Intrinsic to the Sarbanes-Oxley Act is the restructuring of public accounting firms that removes the confusion in the role required of the public accountant. In addition, however, the Act has mandated requirements of corporate ownership itself in the form of appropriately trained members of the Audit Committee of the Board of Directors of each public firm restoring much of the responsibility for management’s deeds to owners. However, as Thomas (2004) states, t here are also significant mandates in ethical behaviors of both industry and public practitioners. But critics of and from both sides all seem to agree that the academy ultimately has an important responsibility of its lack of ethics education to those paraprofessionals in its business and accounting programs. Ghoshal (2003) stated that â€Å"faculty members need to own up to their own role in creating Enrons. It is their ideas that have done much to strengthen the practices they are all now so loudly condemning†. It is reiterated by Merritt (2003) who stated â€Å"to clean up ethics in corporations, you have to start at the beginning of a career. Business school, that is.† These quotes are a representative criticism of business and accounting faculty members offered by many in the literature and popular press. It is that criticism of the academic programs and their teaching faculty that has inspired significant activity in business programs to incorporate ethics into the curriculum. 1.1 Background of the Study The demands for improvement in the ethics education of students preparing to enter the fields of both public and corporate practice have become strident as the reality of business and accounting standards are increasingly at odds with each other. The accounting profession is required to legitimize itself in a way that will restore public confidence in its primary mission. The perception of the role of the CPA according to the Securities Exchange Commission as well as the general public is to serve as a trustworthy guardian of the public interest regarding the proper presentation of financial reports of publicly traded companies. In fact, Briloff (2002) referred to the SEC requirement for an independent auditor’s attestation of companies’ financial statements as an exclusive â€Å"franchise† to the profession. However, in turn, that franchise obligates CPAs to fulfill their