Ethical issues in accounting. Accounting, Finance, SPSS Research Paper

Ethical Issues in Accounting
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Ethical Issues in Accounting
Ethical issues play a significant part in accounting. Ethical issues in accounting often focus on making moral choices when preparing, storing, presenting, and disclosing financial information (Melé et al., 2017). Firms also have an ethical obligation to protect their clients or customers when handling personal and financial data. It is important to explore ethical issues and cases of ethical violations in accounting that have occurred recently to have a better understanding on how to avoid them.
Two Ethical Issues
One ethical issue that may be faced in accounting is integrity. Observing integrity is a fundamental issue in the counting profession (CPA Ontario, 2016). Integrity requires accounting professionals and firms to engage in honesty and be forthright when it comes to client’s financial information. When integrity occurs, cases of fraud often emerge in the accounting profession. Companies that engage in fraud violate accounting principles because it results in harming both the clients and the company (Mintz & Morris, 2020). Many instances of fraud in accounting have emerged over the recent past. One such case occurred at Celadon Group Inc. (Celadon).
In 2019, Celadon was fined 42.2 million dollars for filing false statements, falsifying books, records, and accounts, as well as misleading investors. The company knowingly filed substantially false and misleading statements of accounts to the investors. Specifically, the company falsified the value of assets involving four trade transactions by recording them at exaggerated values and outside the boundaries of fair market value (Catarevas, 2019). The investing public received misleading information and Celadon did this for profit. Celadon provides trucking and transportation services in the U.S., Canada, and Mexico. Its wholly owned subsidiary Quality Companies LLC (Quality) leased trucks and tractors to owner-operator truck drivers (Catarevas, 2019). The company grew rapidly between 2013 and 2016 to own about 750 tractors and thousands of trucks. However, business declined in 2016 and many of Quality’ s trucks lay idle and unleased. However, rather than report accurate financial statements, Quality overvalued the trucks in its books in tens of thousands of dollars. Catarevas (2019) indicates that members of Celadon’s senior management took part in the scheme by reporting inflated profits and exaggerated assets values to the public as was evident in the company’s financial statements. From June to October 2016, the companies conducted a series of trades to get rid of aging and idle trucks. To prevent the public from finding out about the losses involved in the trucks, the executives intentionally inflated invoices beyond the market value.
A second ethical issue is confidentiality. In accounting, professionals actively deal with client personal information. However, using the information inappropriately or failing to protect private data results in violations of confidentiality (Mintz & Morris, 2020). Firms that fail to secure their accounting data or client information can lead to significant harm to clients or the public. Violations of confidentiality have occurred in popular media within the recent past. A case example occurred at Capital One.
In July 2019, Capital One bank was fined by the Office of the Controller of the Currency 80 million dollars for breach of confidentiality. The company suffered a breach in 2019 that affected 100 million people in the U.S. and approximately 6 million in Canada (Capital One, 2019). Investigations showed that an outside individual, later identified as a former employee of Amazon Web Services, accessed personal information of the bank’s credit card customers and people who had applied for the bank’s credit card products (Capital One, 2019). The breach occurred because of a configuration vulnerability in Capital One’s web application firewall. Most of the information affected consumers and small businesses that had applied for credit card products betw...