Ethics in Accounting: A Case Study Analysis

RUNNING HEAD: ETHICS 0
Ethics
Essay
System 0032
[Pick the date]

Ethics
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Introduction
Ethics are the values or belief that helps to understand the difference between what is
right and wrong in a situation. In any profession, ethics are considered as an important aspect.
Because of ethics an individual get to know the code of conduct and legal principles to complete
the work (George , 2011). The concept of ethics can be understood with three elements that
are good intentions, competence and rules conformance. From the view of good intentions ethics
is behaving in an ethical manner or doing the things with a clear intention of do not harm others,
or from the perspective of conformity of rules; ethics is following the rules and code of conduct
that are framed by the company according to the ethical standard, from the third perspective;
ethics in terms of competence is the ability of a person to act based on the ethical principles
(Ferrell & Fraedrich , 2015). The concept of ethics can be understood with the help of a case
study that focuses on the rules and code of conduct that a professional person should follow. The
essay consists of the analysis of decisions that Xavier should take and the consequences that he
might face in the long run. The analysis includes understanding the bad and good outcome of the
given choices. This is done using the business ethics perspective by linking the ethical theories
and concept with the situation.
Case Study: Analysis and Discussion
The first choice that is in front of Xavier is to accept and follow the orders of the
Managing Director and falsify the accounts. If he goes to choose the first option, than this will
enhance his prospects in the front of management and the company and enable him to continue
the job but that would result in the breach of ethics and accounting law that is considered as the
illegal thing, and this might affect his whole career or this decision would “make him an
accessory to the illegal acts and his standing as a professional accountant may be at risk”
(Ferrell, 2016). If Xavier opted for this solution than there are chances that he may be caught
while falsifying the accounts, the consequences that he can face include sentenced to jail,
termination of its professional membership and a penalty of a fixed amount as per the crime.
On the other side, if Xavier decided to not falsify the accounts as directed by his
Managing Director, he has to quit the job. This option will lead him to find a new opportunity

Ethics
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and to resign from the current job. This is a safer side as the ethical behavior and moral values of
an individual help them to be successful in the future. Xavier is an accountant in the company
and his role is to disclose all the assets and liabilities, classify information and present it on time,
and presentation of facts and figures in an accurate way in front of management and to the
stakeholders of the company. As a professional accountant he has to follow the rules and
regulations of his country and adhere to the ethical principles.
According to ACCA section 3.2, the ethical principles that should be followed by the
professional accountants are objectivity, confidentiality, integrity, professional behavior and
professional competence. Principle of integrity is that in a profession a person should not mislead
or falsify information or facts, objectivity principle states that a professional person should make
the decision on the basis of facts and figures and for the betterment of stakeholders and company
and his decision should not be based on the personal benefit. Further, professionalism respect
“the confidentiality of information”, a person should not disclose information of a company to
others for their gain. In a profession, a person is a bind to follow and work as per the rules and
regulation of the professional institute and act professionally and ethically in all the
circumstances (King & Fitzgerlad, 2016).
On the basis of above analysis on ethical principles and values, it is advisable that Xavier
should opt for the second option that is to quit the job and don’t follow the Managing Director
instructions. This is the right choice and an ethical decision that will benefit him in the future. As
by following this he adheres to all the professional guidelines and ACCA principles (Duska &
Kury , 2018). Xavier is a professional accountant and this is his duty to take care of the interest
of the company stakeholders and ensure that pubic trust should be maintained on the professional
institutes or bodies. The stakeholders that are affected by this falsification and fraudulent
activities are public, financial institutions, investors and employees. Breaching the rules and not
abiding to the ethical behavior by a professional person will affect all the stakeholders of the
company. By quitting the job he might struggle to get the new job but he will be satisfied
internally.
Ethical behavior of an individual can be identified with the help of virtue theory of ethics,
this theory states that a person acquires virtue through practice as by practicing being brave,
generous and honest. This will help a person to make the right choice when he will face an