Importance of Ethics in Auditing and Accounting

Running head: APPLIED BUSINESS RESEARCH
APPLIED BUSINESS RESEARCH
Name of the Student
Name of the University
Author’s Note

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APPLIED BUSINESS RESEARCH
Executive Summary
The research study highlights on the significance of ethics in auditing and accounting. The first
segment of this study highlights on the background of ethics in accounting and auditing, research
aims and objectives, research questions, research problem, research scope. The second section
reflects on the literature review of the present research study. The third section focuses on the
methods adopted for conducting the research study. The last section draws conclusion from the
discussion of this research study.

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APPLIED BUSINESS RESEARCH
Table of Contents
Introduction......................................................................................................................................3
Research aims and objectives..........................................................................................................5
Research problem............................................................................................................................5
Research questions...........................................................................................................................6
Research scope.................................................................................................................................6
Significance of research study.........................................................................................................7
Literature Review............................................................................................................................7
Background of ethics in auditing and accounting............................................................................7
Requirement of professional accountants and auditors to ethics.....................................................9
Role of ethics and its significance in advancement of auditing or accounting profession............10
Advantages of developing ethics in accounting and auditing.......................................................12
Methods of implementing ethical audit in organizations..............................................................13
Research Design and Methodology...............................................................................................14
Research Design............................................................................................................................14
Research Approach........................................................................................................................14
Research Philosophy......................................................................................................................15
Data collection Method..................................................................................................................15
Sampling Design............................................................................................................................16
Sampling frame..............................................................................................................................16
Sample characteristics and size.....................................................................................................17
Data Analysis.................................................................................................................................17
Ethical Consideration.....................................................................................................................17
Conclusion.....................................................................................................................................17
References......................................................................................................................................18
Appendix........................................................................................................................................22

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APPLIED BUSINESS RESEARCH
Introduction
This research study intends to analyze importance of ethics in accounting and auditing.
The present century has witnessed huge number of accounting scandals and significant failure in
reporting process and management oversight despite existence of professional ethics standards.
Few industries have attributed these failures of corporate firms to the auditors and accountants
not adhering to codes of professional ethics as well as conduct. These auditing scandals have
affected the auditor’s reputation and also questioned their ethics. In fact, the trust placed by
public in service accuracy given by the auditors has significantly impaired. As, audit depends on
highly on trust as well as fulfillment of the fiduciary responsibilities, significance of ethical
judgments for the auditing professional has been fundamental. In response to these failures, the
firms have understood the importance of ethical auditing (Tassadaq, F. and Malik, 2015). Due to
such failures, the auditing and accounting professionals who are mainly responsible for financial
statements preparation need to obey to the ethical auditing and accounting standards codes for
producing reliable, timely, comprehensive and financial statements of the entities financial
performance. The reason behind this is that the information that are disclosed in the financial
statements form the basis upon which stakeholders might have confidence for making informed
decisions about giving resources to entities (Talebian, 2013). For the managers and investors, it
is essential to learn ethical accounting as well as its functions for avoiding financial dilemmas
owing to misinterpretation of the financial statements. However, the financial statements that are
created with required ethical attributes generally reduces errors as well as generate proper
information for financial statement users. The study mainly highlights on the vital role played by
the accountants and auditors in producing accurate financial statements by adhering ethics and
enhancing organizations reputation in relation to creditors and investors.
This research paper is structured into three segments – the first section reflects on the
introduction to research, research aims and objectives, problem statement, research questions and
research scope, the second segment reflects on the reviewing of literature relating to research
topic while the third segment focuses on the methodology adopted by the researcher for
conducting this research.
Research aims and objectives
The present research study explores about how ethics rooted in the company’s culture
affects the accounting and auditing professionals conduct in executing their roles. This study also
reviews about the impact of individual’s personal attitudes towards devotion to accounting
professionals code of ethics (Mahdavikhou and Khotanlou, 2012). The paper aims to identify
influential as well as significant factors, which encourage accountants and auditors to adhere
ethical code of standard. Moreover, the study also examines undeniable role of the ethical
motivation in combination with ethical conduct which mainly originates within individual. The
aim of this research study is to examine importance of ethics in accounting and auditing. The
sub- objectives of the study are to-
 Explore the requirement of accountant and auditors to ethics
 Examine the significance of adherence to ethics in accounting role as well as its relevance
to well- being of the corporate accounting process
 Identify the role of ethics and its importance for auditing as well as accounting profession
 Explore the advantages of professional ethics in auditing and accounting
 Investigate the ways to integrate ethical audit in organizations