Accounting ethics is a body of good practices that is based on good conscience which accounting professional bodies promote. Professional accounting bodies like ACCA require that you complete an online accounting ethics module in order to be qualified as a chartered accountant in addition to meeting order requirements.

Accounting ethics is deeply rooted in the principle of applied ethics where morals and values are not just preached but put to practice and test. Accounting ethics is that aspect of accounting that borrows a lot from philosophy where humans are judged on the basis of right and wrong.

The public rely on accountancy as a noble profession to establish code of conducts that must be adhered to by practitioners and accounting firms. It is believed that ethical accountant is vital to reducing the prevalence of fraud in corporate world. An accountant that has high moral standard would not agree to falsify the books of accounts when asked to do so by directors.

Accounting as a sensitive profession is faced by many challenges on a day to day basis pushing them to deviate from following the laid down principles, concepts and conventions that would ensure that transactions are fairly reported. For accountants to withstand the pressure and still stand by what is ethically right, a leave might be borrow from auditors in identifying and dealing with difficult situations that would affect their accountancy job.


Ethical threats are those conditions that either exist or assumed to exist that when not managed might hamper the independence of auditors. These ethical threats increase the likelihood of auditors giving the wrong opinion about a subject matter. This risk of expressing inappropriate opinion on say financial statement of a company is known as audit risk. Through the implementation of risk based auditing, most of the components of audit risks are greatly reduced.

Types of ethical threats

  • Familiarity threat
  • Self review threat
  • Self interest threat
  • Advocacy threat
  • Management threat

There are formal procedures that are being followed by different accountancy professional bodies to assist their members that are facing difficult situation at work place.


A lot of people think that being ethically responsible will make you poor. This is a misguided belief and has in fact landed many into trouble that would have been easily avoided simply by keeping right.

Another myth about accounting ethics is the fact many aspiring professionals think it is nearly impossible to keep to the code of ethics of most accounting professional bodies. Well, if you have been among those thinking in this direction, I have a bad news for you.


  • Avoidance of financial crisis: most financial crisis that we have experienced could have easily been avoided if investment accountants, financial planners, and other finance professionals were ethical in their dealings. Rating agencies cannot give AAA rating to rotten toxic assets if they have moral values for example.
  • Win-win situation for all: stakeholders of a business enjoy when proper ethical standard is followed in keeping the books of accounts of an entity. Though some stakeholders like management would rather prefer to commit accounting fraud so as to get more bonus and benefits that are linked to performance, but, the presence of an accountant with high ethical standard will deter managers from committing this fraud.
  • Increased confidence in accounting profession: the public will simply place more reliance on accountants and the accounting information system as a whole if they are convinced that people with moral values acts as the preparers, assessors, and auditors of accounting system.
  • Prevent fraud: the best way to prevent fraud is to have a functional internal control in place. Good accounting ethics upholds internal control and corporate governance.
  • Avoid conflict of interest: following the code of ethics of the professional body that you affiliate with make your life a lot easier when those conflicting moments come knocking at the door.
  • Saves practitioners money: being compliant and ethical in your practice as an accountant saves you time, energy, and money. You need not invest extra time trying to cover your track hoping that someone would not dig it out some day if you do what is morally right and ethical.

Accounting ethics when combined with good business ethics brings out the best in a business venture.

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