Ethics in Accounting: Creative Accounting, Enron Case

ntroduction

While implementation of code of ethics becomes increasingly more and more important many business organizations, the highest standards of ethical behavior is especially required in the accounting profession, which is an integral part of our business and finance world. Accounting ethics can never be ignored when it goes about financial transactions when the financial decisions of a business are directly based on information and judgments provided by accountants.

Nowadays when information about accounting manipulation or fraud appears so often, and financial managers before taking any serious investment decision they have to take into consideration if numbers are not cooked or beautiful cash flow statement is not a product of creative accounting, I find it really important to underline the role of ethics especially in accounting, especially when my field of study is Finance and Accounting.

In my work I would to present the main assumptions connected with ethics in accounting, and weak as well as strong sides of existing business ethics. However before I will describe it, I would like to present shortly how this concept was born and what does it mean Accounting Ethics, to later better explain current situation in this field.

History

"We do not act rightly because we have virtue or excellence, but we rather have those because we have acted rightly."

Aristotle (Greek philosopher and scientist).

Morals and ethics are the boundaries which define a person's thoughts and character. However, they also define boundaries for business and among other also for accounting. Therefore the father of accounting Luca Paciolo invented this accounting ethics concept for business.

Accounting ethics has gained significantly on value during 80s an 90s for corporations. At that time not first time terms (situations) took place like creative accounting, earnings...