Ethics in Accounting
Essay title: Ethics in Accounting
Accounting numbers in business is a closely watched area these days largely in part to the bad financial decisions made by certain corporations. This all has happened over the past 10 years when large corporations were found to be fudging the numbers causing thousands and thousands of employees to lose everything when the company went under. The article chosen for this paper is about the importance of educating students on ethics in accounting. It was written by Susan Schott Karr in 2004, who frequently writes about business education as a freelance writer out of Chatham N.J. She writes about how accounting scandals in the past have caused more in depth training for employees as well as students studying to be certified public accountants (CPA). One instructor at the University of Maryland takes students to a federal prison to listen to former executives who conduct lectures. Students also walk through the prison grounds observing people with law degrees picking up trash off the floor all in the hopes of driving home the importance of ethics in business.
The Sarbanes-Oxley Act is covered briefly; this act pertains to internal controls (Susan Schott Karr, 2004), the main coverage is what companies are doing in response to this act. One such response comes from the accounting firm KPMG who has started a “404 institute” where an open forum will be help that will discuss ways to implementation as well as ways to improve the financial reporting process. Going outside of this article and researching the Sarbanes-Oxley Act, I found that it is one of the biggest changes in US security laws since the New Deal in 1930. The act has 11 titles covering Corporate Board responsibilities to criminal penalties. This act established the Public Company Accounting Oversight Board which basically audits public companies for accuracy in accounting along with other things. (Sarbanes-Oxley Act, 2007)