Month: July 2019

General Financial Ethical Standards and Accounting Principles Every Company Should Know

Every company has a finance department and there are certain ways they should perform in order for them to continue operating under their local government.

Accounting Services in Malaysia, for example, know the general financial ethical standards, as well as accounting principles that every company must possess.

That being said, professionals in the accounting field must abide by ethical standards that help regulate the businesses that they will conduct and as to how they will use their expertise and skills in the field.

Any company owner- a person who runs a huge organization or someone who owns a small business- should know these ethical standards.

Today, I am going to talk about them so that you know what they are.

Accounting Principles in the U.S.

For the purposes of this article, I will only talk about the accounting principles that are set by the American Institute of Certified Public Accountants since these are usually the ones that are followed by accounting firms worldwide.

Anyway, the generally accepted accounting principles are set by the FASB. One stipulation would be that accountants must create records that can be seen by the general public as part of their efforts for complete transparency.

Objectivity

Every accountant in the field should always work with objectivity in mind. They should operate without conflict of interest. For example, they are forbidden to conduct their services to companies or organizations where they have a vested interest in.

Even if a person who is said to be objective, say, works in a company that is owned by a close friend or relative, the financial records that they might create will not be deemed as authentic as it may cast doubts on the intentions of the one who has created the records.

There are some cases, though, that providing accounting services to people that they know (such as in the case of family businesses) cannot be avoided.

If this is the case, the accountant must always be truthful regarding the reports that he or she makes so as to not be deemed of manipulation and falsification.

Competence

Both the Association for Accountants and Financial Professionals in Business and the Association for Financial professionals deem competence as one of their key ethical standards that every accountant should uphold.

To become a competent accountant, you should not only have the education and the license that is required of you, but you also have to continually learn new accounting principles, especially those that are useful in your workplace. They should also be up to date with the information that is stipulated in the GAAP.

Confidentiality

As part of the Ethical Standards that are Mandated by different associations concerning the field, Accountants and other financial professionals have access to key and sensitive information- not only of their company, but also the other entities they work with.

That is why accountants and financial professionals should always maintain confidentiality at all times. This means that the information that they can gather must not be disclosed except when they are ordered to do so by a court of law.