Accounting Ethics and Sustainability

This article discusses the ethical dilemmas faced by accountants in the field of accounting and explores the challenges of incorporating sustainability in organizations. It provides solutions and recommendations to overcome these challenges.

Running head: ACCOUNTING ETHICS AND SUSTAINABILITY
ACCOUNTING ETHICS AND SUSTAINABILITY
Name of the Student
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Introduction
Business ethics can be considered to be a very important part of the organization and in
line of this, it becomes considerably crucial to gain an understanding that if the business wants to
survive in the long run, it would be required to see to it that, it is being able to embrace the
sustainability aspects (Lawton and Páez 2015). Accounting also forms a crucial aspect of the
business and hence, the different individuals would be essentially required to see to it that they
are being able to bring about ethicality in the field of accounting as well. The report focuses on
the different ethicality challenges faced by the businesses and outlines the manner in which the
business would find success with respect to the same. The first part is focusing on the ethical
issues in Accounting whereas the second part focusses on the overall sustainability issues which
take place in the field of accounting.
Part A
Ethical dilemmas
The accountant has a certain number of responsibilities towards the overall public interest
and this then tends to emphasize due care, integrity as well as objectivity (Maas, Schaltegger
and Crutzen 2016). The following section will outline the different ethical dilemmas which may
be faced by the different businesses and hence, proper solutions shall be provided for them which
will then be followed by analysis of the issues against the ethical code of conduct and aspects
relating to integrity.
Ethical Dilemma case 1
The first ethical dilemma being discussed in the essay can be stated to be relating to the
burden received from the side of the management. Very often the different managers tend to

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force the different employees to take the different business decisions as per their instruction and
in line of this, it can be rightfully understood that the different accountants under pressure often
undertake steps to use the wrong principle of accounts and hence, prepare the statement in the
wrong manner. For instance, in order to reflect the overall revenue and boost the sales in the
long run, the firm may end up forcing the accountant to record the sales made for January but the
payment made for December in the month of December itself (Pearson 2017). This can be stated
because, they will be liable to receive a bonus for the year end.
Why is it an ethical problem
The particular scenario, can be assumed to be an ethical problem because it deviates the
accounting principles whereby the firm is required to record the sales in the month it is made and
not in the month when it’s received. The accounting principles are being violated.
Affected parties
The different parties which are being impacted in this case can be stated to be the
investors who will receive an incorrect financial payments and may choose to invest in the
company even when the company has not been performing considerably well.
The manner in which they are affected
The investors may end up undertaking wrong decisions. This means that, they may be
under the belief that the firm is earning profits whereas the firm may not be necessarily be
earning the profits and the investor may undertake incorrect decision making (Rinaldi, Unerman
and Tilt 2014).

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Manner in which this would this tarnish the scope of accounting
When the investors and other stakeholders as present would be undertaking the incorrect
decisions based on the overall wrong accounting information received then, the overall trust in
the field of accounting shall be vanished and hence, the trust of the firms in accounts may not be
maintained.
The impact on public interest
The entire procedure and ethical issues may have a very strong impact on the overall
public interest because, the trust of the stakeholders in the organization may be gone (Weiss
2014). In line of this, it needs to be understood that in such a scenario the public interest will be
tarnished. The decision which is being made by the manager is for their own self-interest and not
the overall interest of the society which thereby impacts the interest of the public.
Solution
The solution which can be rightfully recommended in this case is that the management
would be required to undergo considerable training which would then teach them to curb these
desperate repulses which exist and thereby the different accountants would be required to
indicate that they need to use a specific hotline which would then assists them to take the right
decision in the right manner (Schneider 2015).
Fundamental principle affected
The fundamental principle which is being impacted in the particular scenario can be
stated to be the violation of professional competence as well as the violation of professional
behaviour.

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Threats to compliance
The main aspects here which can be assumed to be the threat to compliance can be
understood to be related to the Intimidation as well as self-interest. The managers have been
intimidating the different accountants and in a similar line of this, they are acting out of complete
self-interest.
Ethical dilemma 2
The second ethical dilemma which the different accountants tend to face in the profession
will be the omission of financial records. Any corporate offer or any other executive may enforce
the accountant to leave out a certain record in order to upraise the overall image of the firm in the
eyes of the firm (Smith 2017). Although the omission of a transaction may not be considered to
be a very serious offence but in such a case, the accountant is assumed to be acting out of context
and impacting the overall operations of accounting.
Why is it an ethical problem
The particular problem may be understood to be a problem of accounting as the
accountants are being forced not to reflect all the transactions which exist (Wood et al. 2015).
This is because, the true nature of the accounting procedure is not being followed and the
statements are being made false solely due to the overall instructions of the management.
Affected parties
The different parties which are affected in the particular ethical dilemma can be stated to
be the stakeholders of the firm and the investors who will get the wrong information about the
firm.

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The manner in which they are affected
The manner in which these parties will be affected is that their overall image of the firm
will be tarnished considerably and in line of this, it also needs to be understood that, the
investment made by the different managers shall also be strongly impacted (Weiss 2014).
How would this tarnish the scope of accounting
The particular incident shall tarnish the overall scope of accounting by losing out on the
trust of the stakeholders and the investors on the firm (Trevino and Nelson 2016). The firm may
spoil its brand image and the investments made in the firm may reduce considerably. Hence, it is
important that the firm engages in activities which do not affect the scope of accounting.
Effect on public interest
The impact of this dilemma on public interest might be that, the investments made by the
public in the firm might be greatly impacted. This means that the actions of the firm may
instigate the public to lose out the interest in the different firms and its operations.
Solution
A solution for the problem can be made by stating that the firms need to undergo regular
compliance as well as regular auditing (Wood et al. 2015). This means that, it is important that
the firm hires external auditors which will continuously audit the overall operations of the firm
and check whether they are being done in accordance with the compliances or not.
Fundamental principle affected
The fundamental principles which have been impacted in such an ethical dilemma can be
stated to be related to the principle of Professional caring as well as due diligence. This means
that any firm functioning in the business environment would be required to act with adequate

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professional care and due diligence. However, the firms engaging in ethical dilemmas fail to do
so.
Threats to compliance
The main threats to compliance in such a case are related to Intimidation and Familiarity.
As the employees are working under the management, they are bound to work under the
instructions of the different management and in line of this, they would also be required to
undertake decisions which suit their personal interests and self-interests (Weiss 2014).
Ethical dilemma case 3
The third ethical dilemma which is being faced by the organization can be stated to be
related to the dilemma of the accountant’s decision making as a whistle-blower. The accountant
can be stated to be an individual who is responsible for figuring out and understanding any
fraudulent activities which may be taking place in an organization. However, due to the
association with the firm, he may choose not to undertake the particular activity and in line of
this, they may also choose to protect the firm which can be considered to be unethical.
Why is it an ethical problem
The given scenario can be understood to be an ethical problem because it violates the
overall principle on which the different organisational aspects are based on. It is the duty of the
accountant to blow the whistle, however, due to certain reasons he may choose to not engage in
all this and protect the interest of the firm which is incorrect.

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Affected parties
The parties which will be affected in such a case can be stated to be the different
employees who may end up losing their jobs, the investors investing in the company and lastly,
the general public may also be affected considerably.
The Manner in which they are affected
The manner in which these parties can be understood to be affected can be stated to be
incorrect investment decisions that they will make in the firm irrespective of knowing that the
company and the trust of these parties in the company shall also be affected considerably.
How would this tarnish the scope of accounting
The scope of accounting may be tarnished in the particular scenario because, the
statements shall not be reflecting the true nature of the firm and may be instead reflecting the
false face of the different operations of the firm (Grayson and Hodges 2017). It needs to be
understood that accounting is required to reflect the true nature of a firm and in case they are not
able to do so, then its objectivity becomes useless.
Effect on public interest
This tends to have a strong impact on the interest of the public as it tends to cheat on
them and portray dishonesty from the side of the firm.
Solution
The solution which can be provided to the organization in order to assist them in
overcoming the particular scenario can be stated to be related to the regular auditing and training
the different accountants as to the manner in which they will be able to find considerable success
in the long run (Ionescu 2016).

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Fundamental principle affected
The fundamental principle which has been impacted in the particular scene can be stated
to be relating to the principle of confidentiality as well as integrity. As the accountant is listening
to the management and protecting their own self-interests, it can be largely understood that, the
accountant should have portrayed integrity in the work and maintain confidentiality to ensure
success with respect to the overall accounting principles (Ferrell and Fraedrich 2015).
Threats to compliance
The threats to compliance in this scenario can be stated to be relating to associated to
familiar. Just because, the accountant is the employee of the firm, does not mean that he will be
engaging in activities which harm the overall objectivity of accounting.
Part B
Sustainability can be understood to be a major aspect which is required to be incorporated
by the different organizations in the long run and any firm which wants to ensure major success
in this aspect in the long run would be required to essentially incorporate the sustainability as a
part of the organization (Duska, Duska and Kury 2018). In line of this, it is required to be
understood that, the accountants are often faced by a wide range of challenges which tends to
succumb their overall growth. The different sustainability challenges which are faced by the
different firms will be described as follows:
Measurement and Reporting sustainability
The overall measurement as well as reporting sustainability is an important aspect which
will be required to be adopted by the businesses but various accountants often find it very
difficult for the business to measure as well as report for the sustainability and hence, with

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respect to this, they are unable to adapt the right kind of sustainability measures with rankings
and find the appropriate reporting standards which can be largely adopted by the firm in order to
ensure that they are successfully able to engage in long term success (Crane and Matten 2016).
The business would be required to understand the right manner in which they will be able to
understand the manner in which the accountants will be able to reduce redundancy in the right
manner and also ensure that they are able to report for the sustainability in the right manner.
Collaborating issues
Another issue which is largely faced by the different accountants can be stated to be the
issue related to the collaboration which is required to be incurred by various members of the firm
(Fiolleau and Kaplan 2017). The sustainability issues generally require change and in order to
ensure long term success, the different businesses would be required to ensure that they are
effectively able to engage in collaboration with the different stakeholders so as to ensure success
and corporate with themselves so that the accounting for sustainability can be done in the right
manner (Bowie 2017). However, very often the different stakeholders as well as the departments
are not willing to cooperate with the accounting department and this leads to various challenges.
Solutions
To overcome these challenges, the business would be required to adopt certain measures
which would go a long way in assisting the business to cope up with the sustainability challenges
which take place in the business environment. The different solutions proposed for the different
challenges as faced by the firm can be understood to be as follows:
1. Requirement to establish sustainability framework

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Man countries and large organization have developed a sustainability framework
which states down the manner in which the organization would be successfully able to
report for the sustainability challenges which take place(Ball, Grubnic and Birchall
2014). In regard to this, it can be successfully mentioned that, once the firm will be able
to follow this sustainability framework then in line of this, they would be able to ensure
long term success.
2. Secondly, the accountants need to let out an instruction to the management with respect
to the kind of management which will be required to be given to them (Bebbington,
Unerman and O’Dwyer 2014). If the managers are provided with adequate information,
they will be able to provide an adequate training to the different employees who will then
be willing to cooperate and provide their assistance to the firm in the long run. In this
way, the firm will be able to ensure that it is able to solve the overall sustainability
accounting challenge as being faced by the firm.
Conclusion
The main objective of the essay was to understand the different ethical dilemmas which
will be present in front of the different accountants. In addition to this, the dilemma related to the
different operations with the impact on the overall rules deviated and the different fundamental
principles which have been tampered has been discussed. The second part of the essay discusses
the overall sustainability challenges which are faced by the different firms and based on this, the
overall analysis has been provided along with the solutions to resolve the same.

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