Does your organisation have Ethical Balance Sheet!

Ethics in accounting is concerned with how to make good and moral choices in regard to the preparation, presentation and disclosure of financial statements of your organisation.

Unethical practices:-

• Many accounting scandals over the past two decades have centered on fraudulent financial reporting. Fraudulent financial reporting is the misstatement of the financial statements by company management. Usually, this is carried out with the intent of misleading investors and maintaining the company's share price.

While the effects of misleading financial reporting may boost the company's stock price in the short-term, but there are almost always ill effects in the long run.

• On an individual employee level, the most common ethical issue that arises in accounting is the misappropriation of assets. Misappropriation of assets is the use of company's assets for any other purpose than the interest of company.

For example, a senior level executive may charge a family dinner to the company as a business expense. At the same time, a line-level production employee may take home office supplies for personal use. In both cases, misappropriation of assets has occurred.

Being Ethical hepls:-

1. Planning

   
   
   Accountants have a responsibility to provide the business owners and stakeholders the accurate information that facilitates sound planning. This obligation involves providing accurate information, and providing it in a time frame so that required decisions and planning can be done.
2. Taxes

   Your company has a legal obligation to provide financial information fairly and accurately on tax forms. Providing inaccurate information to tax agencies may lower your tax burden, but you will be subject to fines and other charges if you are caught. Ethical accounting practices ensure that your firm is not misguiding the tax agencies.
3. Perception

   Honest and ethical accounting helps to create a positive image for your business. When a company makes news for dishonest accounting, it loses the trust of current and potential customers as well as investors. This is especially important with industries that depend on strong working relationships with their customers and investors.

Doing unethical practices in your financial statements is not less than stupidity,just for a very short term benefit of it company is loosing trust of it's stakeholders which can result in a huge and huge loss for a company later. So it's better to provide fair and transparent information which will result in long term returns for any organisation.