Sunday, December 8, 2019
Advance Issues in Accounting Ethical Practice
Question: Discuss about theAdvance Issues in Accounting for Ethical Practice. Answer: Introduction This study deals with unethical issue that is present in accounting. In this given case, a recent event had been selected in Queensland Brisbane where it is noted that red roosters are under paying their employees by the owners (Martinov-Bennie Mladenovic, 2015). In the books of accounts, the accountants are showing that the workers were paid in accordance to the standard wages rates. This give rise to an unethical issue that is present in the financial reports and biased so that the company can avoid the tax Ethical Practice that could have Adopted to Produce More Positive Outcome A seven News Investigation had revealed the fact that Red Rooster franchises have been underpaying their staff members especially who is migrant workers (Apesb.org.au. 2017). Red Rooster is a fast food chains where the young human resources have been ripped off. According to Fair Work Commission Officers, it is viewed that they had acted firmly to simultaneously raid seven of the take-away outlets on Brisbane Southside that reports that the workers were underpaid for their work (Kuan, 2014). Accounting Professional and Ethical Standard Board Limited issued APES 110 Code of Ethics for Professional Accountants (Accounting Professional and Ethical Standards Board (APESB). 2013). In this particular case, it is understood that several red roosters have been under paid by the owners but in the books, it was clearly mentioned by the accountants that they are paying the workers according to the standard wage rates (Jaber Fadda, 2016). In this case, there is unethical practices prevails in the company named as Roosters as they are involved in paying less wages to the employees and misrepresent the financial figures. The accountant involved is committing unethical practices of showing the actual standard wage rates of the employees in the financial report that is not true and leads to an ethical issues. The accountants do so to avoid tax and it leads to biasness of actions that needs to be avoided as soon as possible (Apesb.org.au. 2017). According to the fundamental principles as mentioned in the APES 110 Code of Ethics for professional accountants, it is needed for the members to comply with the given principles and these are explained under with proper justification: Integrity- An accountant should remain straightforward as well as honest in making the decisions and maintaining cordial professional and business relationships at the same time (Hossain et al., 2016). Objectivity- An accountant should not allow biasness in their action, disagreement of attention or any kind of undue power of others for overriding the specialized or industry judgments (Apesb.org.au. 2017). Professional competence and due care- An accountant need to have professional knowledge as well as ability at the level that is essential for ensuring that a client or employer receives knowledgeable qualified Services that is based upon the current expansion in performing, method and legislation where they have to act diligently by following the technical and the professional standards (Apesb.org.au. 2017). Confidentiality- An accountant should be maintaining confidentiality of information that is obtained as a result of maintaining specialized as well as trade relationships and should not make effort in disclosing the information to any of the third parties without any special authority. They cannot use the information for their individual benefit of the Member on in that case third parties (George, Jones Harvey, 2014). Professional behavior- An accountant need to fulfill with the applicable laws as well as regulations and try to avoid any achievement that discredits their occupation at any point of time. In this particular case, an accountant should be abiding by the above-mentioned fundamental principles at the time of preparing the financial report for the company named as Roosters (Apesb.org.au. 2017). Accountants should be mentioning the wage rate that is actually paid to the employees of Rooster as it is accordance with the ethical principles. As mentioned the professional competence and due care, it is essential for the accountant to mention the same figures in the financial reports. The accountant should be using their knowledge and skill where they can provide professional services to the client through use of professional standards (Freeman Evans, 2016). The ethical practices that should be adopted by the accountant of Roosters are that they should start correcting the misinterpreted figures that they had shown in the previous years as this is resulting in unethical practices (Apesb.org.au. 2017). The accountants here need to follow the principles where it is clearly mentioned that there should no manipulation of accounting figures and no hiding of data to avoid taxes and generate profits for the business. It is thereby advisable to the accountants to present the correct figures of wages that are actually paid to the workers and Roosters should not be involved in unethical practices as it will hamper the goodwill of the business in real time (Clayton Staden, 2015). Importance and Role of Ethics in Business Especially in Accounting Practices It is necessary to maintain ethical standards in business entity that has an intention to survive in the market as well as improve over the organizational competencies as well as efficiencies. In this particular case, accountants working under Roosters should be developing total efficiencies of the employees to write the actual wage rates that are paid to the employees and should not misinterpret the figures in the financial reports. The accountant should follow the ethical standards that will help business in achieving future success rates. This can be done by training as well as guiding the human resources in a way so that they build their competence in all feature of trade (Chaplin, 2016). In this time business stress upon maintaining the ethical standards in an effective way On the contrary, it is necessary to understand as well as uphold the business ethics as it help in overall business activities so the professional accountants should be abiding by the ethical standards. Ethics is a term that relates directly with the morality, integrity and honesty. Addition to that, ethics means the fundamental concepts of right human conduct that takes into consideration differentiation between right and wrong activities where the accounting professional need to follow the principles (Carey, PMonroe Shailer, 2014). The accounting profession takes up various purpose of secretarial like recording of trade events that are of monetary nature and classifying the form of profit and loss statement where the activities are performed for maintaining proper accounting ethics of accountants (Carey, 2015). Professional accountants needs to be showing ethical behavior and they needs to be impartial as well as loyal to Roosters at the time of preparing the financial reports with sincerity. In this case, the professional accountants fail to do so and misinterpret the figures but they need to correct it by following the ethical fundamental principles such as professional competence and due care (Apesb.org.au. 2017). The accounting information is extracted from the financial statements that have great value as well as significant where it can be properly relied upon. It mainly depends upon the success or failure of a business where the accountants engages in manipulating the accounting figures so that they hide the real information. It is necessary for the professional accountants of Roosters to properly present the figures and do not engage in manipulating the data to avoid tax for the business (Apesb.org.au. 2017). In this case, the accountants ha actually changed the figures of employees payment and there is difference between what is written in the pay slip and what is paid to the workers for their work. Here, it is understood that the accountants adopts unethical practices as they changed the accounting figures to avoid taxes and make profits for Roosters. It is advisable to the accountants of Roosters to abolish the previous unethical practices and engage in correcting the figures in the financial statement to bring reliability of financial information. Accounting professionals are advisable to provide with accurate information to the business authorities without changing any figures that shows less wage rate that paid is workers (Ball, Tyler, Wells, 2015). Accounting ethics needs to be applied in every single activity of process as it will help in getting complete, accurate as well as consistent information that can be obtainable to the potential users of financial declaration in the company named as Roosters (Accounting Professional and Ethical Standards Board (APESB) 2013). Conclusion From the above case, it is understood that the owner of Roosters are involved in unethical practice as they were paying less wages to their employees that was not even mentioned by the accountants, rather they are showing as per the standard wage rates. This unethical practice should be avoided by the professional accountants by following the ethical standards as mentioned in APES 110 Code of Ethics. This standard clearly mentions that professional accountants should be engage in manipulating any accounting information in the company reports at any point of time. Therefore, the unethical case can be resolved when the professional accountant of Roosters follows the professional competence and due care in their auditing activities. Reference List Accounting Professional and Ethical Standards Board (APESB). (2013). APES 110 Code of Ethics for Professional Accountants. Apesb.org.au. (2017).Accounting Professional and Ethical Standards Board. 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