5. Issues of ethics, regulation and compliance and the extent to which they are consistent or threats for the organization

 

Accountants are professional individuals who are skilled in their field and can be trusted with ensuring data privacy of an organization. The accountancy profession is known for its quality service provided by the respected employees, these services add up with quality and consistency of its work as performing accounting function's is done literally everyday. This means that that accountants must oblige to ethical regulations and professional standards.

Commencement of a business can challenges when the business plan isn’t going too well, the urge to compromise the numbers to make it seem smooth can be tough to resist. The problem for accountants is that they have a clear ethical and legal obligation to produce an accurate financial statement even if the business is going downhill. Failing to do so can get them in bigger trouble as civil or criminal liability which will shut their business down completely. As hiring accountant can give them a threat to their job security if they done produce the financial statements before the deadlines (Nida Turegun, 2017).

The accounting profession is vastly diverse as they team up to disclose the final information to the managers and it allows them to come up with decisions to benefit the firm, however conflicts may arise due to ethical issues. The senior accounting staff may receive higher pay due to their qualifications while they do less work of performing the accounting function, even if they’re not productive they may favor making decisions by not following the ethical rules that may result in huge loss to the company. Accountants face ethical conducts on the regular, they seek to add prominent value by increasing the revenue cycle of the business by cutting out unnecessary costs, an accountant may have to come up with desired results to company therefore, the data provided should be fair and accurate to be ethical.

The fundamental of accounting requires to follow high level of ethics and transparency due to the accuracy of data and financial figures, relevant information should be passed on for a better decision making by the management. Accountants may try to manipulate and fudge the numbers for personal increments and bonuses as this would result them to get to a better standard by attracting potential investors. But the business will face the consequences of it as they did not meet the ethical regulations.

The accounting policies that an entity uses in its opening SLFRS statement of financial position may differ from those that it used for the same date using its previous GAAP. The resulting adjustments arise from events and transactions before the date of transition to SLFRSs. Therefore, an entity shall recognize those adjustments directly in retained earnings at the date of transition to SLFRSs.

The objective of this SLFRS is to ensure that an entity’s first SLFRS financial statements, and its interim financial reports for part of the period covered by those financial statements, contain high quality information that is transparent for users and comparable over all period. provides a suitable starting point for accounting in accordance with Sri Lanka Accounting Standards (SLFRSs); and can be generated at a cost that does not exceed the benefits.

Find more at Ethics of Accounting.