Over the years there have been several well-publicized cases involving ethics in the finance and accounting industries. Some of the ethical issues that arose from these cases are:
1. Partnership arrangements that kept fraudulent transactions hidden;
2. Propriety of accounting for certain related-party transactions;
3. Trading consulting fees for a clean audit on inaccurate books;
4. Ponzi, or pyramid schemes; and
5. Improper valuation of assets and derivative instruments.
However, accountants and tax professionals have a responsibility to clients and the general public to remain and appear ethical as we fulfill client’s obligations and promote the integrity of the profession. Therefore, we must consider our actions as they fall within the “letter” as well as the “spirit” of the law. The former being the literal interpretation of the law and the latter being the broader intention behind the law, which may be obvious but not stated. Not only are we expected to do the right thing but also to avoid even the appearance of acting in an unethical manner. Your actions may spring from innocent intentions, but would they look that way to someone observing from the outside? You must be ethical in appearance and in fact!
Licensed accountants and tax professionals are held to a higher code of ethics and professional standards and must adhere to such or face strict sanctions and penalties.