Ethical Challenges and Sustainability in Accounting Practices

This essay delves into the critical domain of ethics within the accounting profession, emphasizing its importance for long-term business success and societal contribution. The essay examines ethical dilemmas faced by accountants, such as pressure from managers to manipulate financial figures and the omission of financial records, and provides solutions based on ethical codes of conduct. It also explores the impact of these dilemmas on stakeholders, accounting principles, and public interest. Furthermore, the essay addresses sustainability challenges in accounting, highlighting the need for ethical practices to ensure accurate financial reporting and uphold public trust. The analysis covers various scenarios and proposes solutions to promote ethical behavior and responsible accounting practices, ultimately contributing to the integrity and reliability of financial information.

Running head: ACCOUNTS
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Name of the Student
Name of the University
Author Note

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Introduction
The domain of ethics can be assumed to be very crucial in any business. Additionally,
whenever any business aims to engage in success in the long run then in this scenario, it will be
essentially required to consider that it does not engage in any operations which are unethical in
nature (Alstadsæter et al. 2016). Additionally, the business needs to accept the various
sustainability aspects as well as these will enable the firm to carry out the different operations in
the right manner and be able to contribute to the society. This is because, any business which
functions in the society would be required to see to it that, they are being able to follow all the
rules which are applicable to the society (Bowie 2017). One of the fields of the business can be
taken to the accounting as a function and therefore, ethicality in the field of accounting is integral
to abide by. Hence, the main focus of the essay will lie to examine the manner in which the field
of accounting is challenged by various ethical issues and how there exists a certain level of
ethical dilemma which the different business managers and the accountants face in a regular
basis. These ethical dilemmas will be examined critically along with providing solutions for each
of the dilemmas underlined. The second part of the report is focused on the sustainability issues
in the domain of accounting.
Part A
Ethical dilemmas
There are various instances in the domain of business which are generally faced by the
diverse accountants pertaining to an ethical dilemma (Busco and Quattrone 2018). This is
because, the accountant has a sense of duty on the way to the general civic interest and therefore,
the accountant will be essentially required to show due care an integrity within the domain of the

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firm. Hence, in this sub section, the different quandaries which are tackled by the accountants
and businesses will be highlighted and emphasized along with focus on developing certain
solutions for these dilemmas which are set against an ethical code of conduct and other integrity
aspects.
Ethical Dilemma case 1
The first dilemma case which is being examined in the essay can be mentioned to be the
burden which the accountants in an organization generally tend to receive from the different
managers. The managers often pressurize their employees to meet their targets in the right
manner and it is due to this reason that the accountants may feel pressurized to display figures
and accountants which may not replicate the true face of the accounting (Christensen et al.
2015). This may result in the wrongful preparation of the statements and may boost sales but in
reality, the true nature of accounting may not be displayed accordingly. For example, in order to
meet yearly targets, the accountant may record sales made on a future date in the year end only
so that the previous year sales can be shown higher. The reason why they conduct in this kind of
a behavior is because, it will help them in earning higher levels of profit for the business
(Clayton and Radcliffe 2018).
Why an ethical problem
The case outlined can be mentioned to be an ethical dilemma because it strays the
principles of accounting by recording the sales of an advance month in the sales of a previous
month. The sales are required to be written down only when the sales are actually being made.

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Affected parties
The diverse parties who are usually affected in this situation can be taken to be the
stockholders who will be satisfied by viewing the financial statements of the firm, but this may
not be the case in reality, and they may get their hopes high unnecessarily (Crane and Matten
2016).
The manner in which they are affected
This kind of a case may lead to the investors making a wrong decision in regard to seeing
to it that, they may invest a higher amount in the firm thinking that they may be able to earn
profits, but this is not the case in reality.
Manner in which this would this stain the scope of accounting
The main purpose of accounting is to display the correct and true financial statements of
the different organizations to the various investors (Crane et al. 2019). However, as the firm is
engaging in this faulty behaviour, the accounting fails as a system as it is not being able to reflect
the true nature of accounting and instead end up with limited scope of operations.
The impact on public interest
The impression of this on communal scope may turn out to be negative in nature. Any
public group generally places a complete sense of trust on the organization and as the firm is not
being able to meet up with these accountant standards then in such a case, the image of the firm
is being tarnished (De Simone 2016). The manager is undertaking the decision based on the own
self-interest and not for the welfare of the firm.

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Solution
A sound solution for the problematic issue can be mentioned to be that the administration
would be essential to experience exercise which would assist them in managing the targets in the
right manner and allow them to not adopt these desperate measures which would require such
unethical deeds. Moreover, a certain authority needs to be given to the accountants to protect
them against the scenario (Duska, Duska and Kury 2018).
Central principle affected
The central principle which is being affected in this case is the destruction of the
professional competence and violation related to the professional behavior.
Threats to compliance
The primary threats to acquiescence in this case, can be mentioned to be the Intimidation
and self-interest. The managers can be understood to be intimidating the various accountants and
hence, they tend to act out of the self-interest.
Ethical dilemma 2
Another ethical predicament which the auditors face in the business scenario can be
mentioned to be the omission of various financial records. In such a case, it can be rightfully
mentioned that, the accountant might be forced by the corporate officer or another lead manager
to miss out on a record because it may not reflect positively on the image of the organization
(Ferrell and Fraedrich 2015). Although this dilemma can pass as a mistake and may not be taken
to be quite a serious affair, however, it has to be considered to be unethical as it may fail to
reflect the true position of the firm.

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Why an ethical problem
The given scenario is taken to be an moral issue since, it prevents the business from
performing the rightful operations and the main and true form of the financial statements is not
reflected in this scenario (Fiolleau and Kaplan 2017). Additionally, the true accounting process is
not followed, and all instructions are solely based on the management discretion.
Affected parties
The groups which are affected in this scenario can be taken to be the investors and the
investors of the firm who may not be able to observe the true nature of the operations and gain
the incorrect information (Florou, Kosi and Pope 2017).
The manner in which they are affected
The investors may undertake incorrect information which may thereby lead to the
wrongful decisions from the different managers (Garbowski et al. 2019). In regard to this, it has
to be understood that they may think that the firm is good in terms of its financial capability but
in reality, it may be that the firm is not performing upto the overall standards.
How would this stain the scope of accounting
This will essentially smear the inclusive opportunity of accounting by breaking the belief
of the different investors and not reflecting the true nature of accounts (Hoyle, Schaefer and
Doupnik 2015). This means that, as the firm will not be reflecting on the true form of the
accounts, this may have a negative impact on the manner in which the different accounts may be
perceived.

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Effect on public interest
This will then spoil the brand name of the organization and hence, the value of the firm
might go down (Kaplan and Atkinson 2015). Additionally, the public interest may be affected by
wrongful price of the investments and hence, they may disinvest in the operations of the firm.
Solution
A solution to the given set of problems can be essentially mentioned to be the fact that
the firm would be required to undergo auditing which would enable the organization to achieve
its goals and be able to identify any errors which may take place as a result of the omission of
certain aspects (Laux and Stocken 2018). As these auditors will be hired externally, they may be
able to assist the public in finding the errors.
Central principle affected
The central principles of Professional caring and due diligence are affected in the case of
this ethical dilemma. This affects that when any organization performs in the business then in
such a scenario, they would be required to act accordingly and in case they are faced by the
ethical dilemmas then they flop to do so.
Threats to compliance
The various threats to the compliance which is being made by the firm in case of this
ethical dilemma can be referred to as the threat of Familiarity and Intimidation. In this scenario,
the organization generally tends to work for the motives of the management (Maskell, Baggaley
and Grasso 2017). However, the employees need to undertake the different decisions based on
their own discretion and in this case, this makes it important for them to work on the overall
motive of the firm instead of just functioning on the direction of the manager.

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Ethical dilemma case 3
The third ethical dilemma scenario which is being essentially discussed can be referred to
as the case of the accountant being a whistle blower. In such a scenario, it can be said that the
accountant is the one in the organization who is essentially responsible for maintaining the
viability and authenticity of the financial statements. In association with this, they would be
required to see to it that, they will be required to report any fraudulent activities which tend to
take place in the firm (Rinaldi, Unerman and Tilt 2014). Additionally, it will be crucial for them
to report this firm however, in many cases, the accountant might choose not to take any action in
regard of this activity and hence, in line of this, this can be outlined as unethical.
Why an ethical problem
The case can be referred to as an ethical problem as it violates the true objective of the
financial statement which is to reflect the true nature of the firm and hence, as this activity which
might be fraudulent in nature might not be reflected by the financial statements and the
accountant is not blowing the whistle, then, the interest of the organization is not being protected
(Schneider 2015).
Affected parties
The groups which are being impacted in this situation can be mentioned to be the workers
who may lose their jobs due to the wrong deeds and the different investors of the firm.
The Manner in which they are affected
The stockholders end up taking incorrect decisions based on the faulty financial
statements which fail to imitate the true functioning of the organization and the manner in which
the firm has been performing. Moreover, the investors may lose out on the interest of the
organization.

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How would this damage the scope of accounting
This ethical dilemma tends to tarnish the opportunity of accounting by failing to represent
the true financial position of the organization (Shaw 2016). If the financial statements of the firm
fail to represent the true nature of the firm, then their overall objectives will fail.
Effect on civic interest
The influence of this on the communal interest may be that, the public might feel cheated
on the organization and hence, the brand tag of the enterprise may go down.
Solution
The solution to the problem can be outlined to be the fact that the company needs to
experience a regular auditing activity and the accountants need to undergo various training
activities with the help of which they have the discretion to take the right kind of decisions at the
right time (Smith 2017).
Fundamental principle affected
The principles of confidentiality and the integrity have been affected in this scenario.
This means that, when the bookkeeper is attending to the administration and not shielding the
self-regard, he is not portraying truthfulness in the work and not maintaining discretion as well.
With relation to this, the accounting principles are not being achieved successfully (Solow 2019).
Threats to the compliance
The primary risk to acquiescence in this scenario may be outlined as the threat related to
the familiarity. As the accountant is the employee of the organization, he becomes a part of the
conspiracy and tends to harm the overall objective of the firm.

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Part B
The concept of sustainability can be referred to as the ability of the business to continue
the overall operations which are incorporated by the organization without limiting the
organizations future capability to function in the right manner (Trevino and Nelson 2016).
Additionally, it has to be reflected that, for a firm to gain a good brand image for itself, the firm
would be essentially required to guarantee that it is able to meet with sustainability and its related
aspects. Therefore, it is important that the accountants in a firm also abide by the sustainability
rules and guidelines. However, this often forms a hindrance in front of these accountants and
limits their overall responsibility and duties which are essential for them to perform well. The
different challenges which are faced by them can be mentioned to be as follows:
Measurement and Reporting sustainability
The first issue which is being faced by them can be defined as the measurement issue. In
case of the reporting, it is important that the accountant adopts the measure of sustainability in
the operations of the firm and is being able to outline the different ways in which the firm has
been performing. However, reporting of the sustainability is not an easy task and hence,
accountants find it difficult to measure the sustainability for the business operations (Weiss
2014). Additionally, they are also not able to find the appropriate ranking for the different firms
and additionally, it is very difficult for them to bring the rightful position of the firm. In such a
scenario, it would be important for the firm to get an understanding of the right way in which the
different accountants will be able to gain an idea about the redundancy and essentially able to
reduce it so that they can report for the sustainability in the accurate way.
Collaborating issues

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The next issue which the accountants generally tend to face can be defined as the
collaboration issues. In order to report for the sustainability activities of the organization, the
cooperation and coordination of the entire organization is important, however, very often the
different members of the firm are not willing to consult and provide their input to the different
accountants and hence, the accountant in this case is unable to define the manner in which they
can collaborate with the different members and represent the activities in the books of accounts.
When the collaboration and assistance of the various parties is received, it makes it easier for the
organization to be able to gain the right kind of support from the right party.
Solutions
Hence, from the challenges, it can be rightfully assessed that the firm would be required to
undertake certain measures in order to see to it that, the firm is being able to assist the
accountants in facing these sustainability issues in the right way and allow them to carry out the
operations in a rightful manner. Hence, the following solutions are being proposed for the firm:
1. Establishment of a sustainability framework
Various multinational organizations which are essentially based in the different parts of
the world have been successfully able to establish a suitable framework which enables
them to take the right decision in regard to the recording of the sustainable activities. T
also assists them to be able to meet the sustainability challenges and undertake the right
decision for the organizational welfare (Weygandt, Kimmel and Kieso 2015). Therefore,
in regard to this, it has to be noted that, the different organizations around the globe need
to be able to adopt this strategy and be able to function on the basis of this framework in
order to see to it that the organization is being able to achieve its targets.

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2. Additionally, the accounts have a key role to play and they must take initiatives to inform
the management regarding the kind of data and other aspects of the working of the firm
which they would be requiring. This assures that the firm is being able to prepare the
sustainability report accurately. When the managers will encourage the different
employees to corporate with the firm then in this case, hey will be essentially able to
assist them in forming the reports in the right way. Moreover, the different managers can
also provide training to the different employees and guide them to corporate with the
firm. This would assist the organizations and the different accountants around the globe
to solve the problem relating to the sustainability accounting challenge.
Conclusion
Therefore, it can be essentially mentioned that accounting is not an easy task and to
engage in long term victory, the various enterprises would be obligated to follow the principles
of ethicality as well as sustainability which can be considered to be a solution which would assist
them in meeting their overall goals and objectives. Additionally, although faced by ethical
dilemmas at their course of work, the firms would be required to see to it that they are being able
to undertake the right decision for the firm which also assists in the overall welfare of the
different employees who are present. The essay was divided into two sections whereby the first
section focused on the ethical dilemmas and other such issues which are being confronted by the
accountants. On the other hand, the second part focused on the sustainability issues which are
confronted by the accountants in terms of reporting. Each of these issues were examined
critically and solution for the same was also provided.

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