Accounting ethics can be considered as part of business ethics, so there may be good ideas from applied ethics in both these areas. An organisation should take ethical responsibility also with respect to accounting practices, and not only practices a pure cynical regime based on what transactions it is possible to get away with, even if these are dubious. Having high ethical standards is also important for building mutual trust between organisations.

Learning such practices should probably start with courses on accounting ethics, as shown for example here:

http://link.springer.com/article/10.1007/s10551-006-0020-7

ETHICS & MAJOR PROFESSIONAL ACCOUNTING BODIES IN INDIA:

A number of accounting scandals have been reported in the recent past in India (notably Satyam case) and due to these, public distrust and protest has increased resulting in great shock to the accounting profession.  Unethical practices or act of manipulations are bound to bring disrespect to the accounting profession. Unethical behaviour is not at all desirable particularly in accounting. In fact, by joining their professional organizations, people who work in the field of accounting agree to uphold the high ethical standards of their profession. Each of the major professional associations for accountants has a code of ethics.  Keeping in mind these issues, both The Institute of Chartered Accountants of India, New Delhi as well as The Institute of Cost Accountant of India, Kolkata have taken a few steps in this regard.

ETHICAL GOVERNANCE AND C.A. PROFESSIONALS:

In the present scenario, CAs are less involved in traditional accounting. The profession of Chartered Accountancy has attained a coveted position as a result of constant pursuit for perfection, integrity, skills and knowledge. To maintain this position, it is essential that the expectations of the society are understood and met. The responsibilities placed on accounting professionals require professional competence, confidentiality, integrity, and objectivity. Accounting professionals should only undertake tasks that they can complete with professional competence, and they must carry out their responsibilities with sufficient care and diligence. Any confidential information known to accounting professionals must not be disclosed to outsiders.

Mission Statement of  the Institute of Chartered Accountants of India,N.Delhi.

 “The Indian Chartered Accountancy profession will be the Valued Trustees of World Class Financial Competencies, Good Governance and Competitiveness.”

As far as various ethical issues are concerned, an Ethical Standard Board has been set up by ICAI .Every profession has its own Code of Ethics. The Chartered Accountants Act, 1949 has been enacted by the Parliament for the regulation of the profession of Chartered Accountants and for the purpose of carrying out the object of the Act, the Chartered Accountants Regulations, 1988 have been enacted. The Act has two schedules i.e. First Schedule & Second Schedule.

The First Schedule has four parts:

Part I - Professional misconduct in relation to Chartered Accountants in Practice.

Part II - Professional misconduct in relation to Members of the Institute in Service.

Part III - Professional misconduct in relation to Members of the Institute generally.

Part IV - Other Misconduct in relation to the members of the Institute generally.

The Second Schedule has three parts:

Part I - Professional misconduct in relation to Chartered Accountants in Practice.

Part II - Professional misconduct in relation to Members of the Institute generally.

Part III - Other misconduct in relation to members of the Institute Generally.

These two schedules along with the decisions of the Courts on professional misconducts, decisions, directions, guidelines, statements, clarifications and also interpretations of the Council on the various clauses of these two schedules constitute the Code of Ethics for the accountancy profession.

Part-A of the Code of Ethics, 2009 has been introduced inline with the IFAC Code in compliance of membership obligation of the ICAI. This part of the Code establishes a conceptual framework for all members to ensure compliance with five fundamental principles of professional ethics, namely, integrity, objectivity, professional competency and due care, confidentiality and professional behavior. Under the framework, all Chartered Accountants are required to identify the threats to these fundamental principles and apply safeguards to ensure that the principles are not compromised. The framework applies to all Chartered Accountants, whether in practice or in service.

                                                                This key aspect of ‘ethical governance’ is substantiated by the following :

                           “While there have been positive developments in terms of building the architecture for ethical codes and policies, the translation of these into actual practice and everyday business processes is lagging behind.”- quote from Report on “Managing Responsible Business” – A Global Survey on Business Ethics – 2011 conducted by CGMA [Certified Global Management Accountant – a body jointly formed by the AICPA and CIMA, London].

                                        The professional training with emphasis on ethical aspects of governance would make a CA most suitable person to take responsibility to act as change agent. But in order to take the maximum benefits, ethical standards should not only be set but also be met. The direct relationship between good accounting practices and better economic outcomes is widely recognized. Violations of ethical standards can also sometimes lead to a person's being publicly expelled from the professional organization.

I am pleased that India is formulating commendable standards for their CAs, as indicated by Sanjeev's thorough response to the question. But I think the question goes deeper than this; Ismael seems (please correct me if I'm wrong) asking whether accountancy ethics form the basis for company ethics, and I am not at all sure that you can direct the ethics of a company simply by rigorous application of good accountancy practice. There are many organisations around the world which doubtless have high standards in their accountancy departments but which engage in highly questionable operational activities elsewhere. For example, an organisation might adopt the lowest cost and legally acceptable method of totally trashing the environment and claim (as they do) that they're being 'efficient'. So I don't see accounting as being the entire story.

Thank you Tony, for your carefull answer, and sorry for my english ! Your example is perfectly chosen regarding my concern. To put it simple (from a critical accounting perspective) : If accountancy stands for measuring what counts for the company's stakeholders and therefore, what the company is accountable for, then in Theory, accountancy could be the foundational ethics of any organization.

But as you perfectly explained, accountancy main concern is legal compliance, and ethical legitimacy appears to be out of the picture.

Companies are always claiming to create value, but there seems to be a lot of work to fill the gap between organizations accountancy and organizations accountability ! Therefore, my question was about existing research on "how could accountancy practices be extended to filling that gap ?"

Thank you again for your answers

ACCOUNTING, ACCOUNTANTS & ACCOUNTABILITY

I found an excellent special issue from AAAJ that is actually very thorough. Though I am not specialised in Critical Accounting, it definetly seems to be a significant contribution to the field.

Article Accounting, accountants and accountability regimes in plural...

Ismael, I completely agree with you! In order for accountancy to drive the ethical actions of an organisation you first have to quantify morality in dollar terms, and in such a way that the resulting 'value' of the ethical imperative, that you are trying to quantify, is meaningful. That's worth a Nobel prize.

Dear Tony, I really think that having a look at this special issue could help understanding each other. Again, my poor English is probably one of the reasons why we disagree. For me, "Quantifying Morality" is meaningless and totally out of purpose. Recognizing the existence of "accounting accountants and accountability regimes" as ethical regimes is much more my concern.

Article Accounting, accountants and accountability regimes in plural...

Ismael, I am distressed that you believe we disagree! Let me explain the meaning of accountancy and accountability which are NOT AT ALL the same thing in English. Accountancy as you are surely aware is quantification of as many variables as possible pertaining to the operation of some organisation, so as to arrive at a scalar value upon which the value of that organisation can be judged. Accountability is, in my view, a more moral issue concerning who (or what) is responsible for some action, and has nothing to do with accountancy despite some regrettable similarity of name. I don't see that the term quantification  of morality is meaningless because that is exactly what accountability expressed in accountancy terms seems to require. How else to convert accountability into a scalar value which can be expressed in dollar terms as accountancy demands?

Hi Ismael

Thank you for your kind comments about the special issue of AAAJ. Delighted that you found it useful. I am at one with you about ethics and I disagree with Tony. Accountancy is not just about numbers - you cannot separate ethical issues from measurement. There are ethical issues in what you choose to measure, how, why and for whom, and if there are multiple measures there are obvious problems of weighting them into a composite measure. If you follow discourse theory then any accounting measure is an empty concept until it is enacted in discourse which may vary across participants and over time. Similarly I see no reason to separate accountability from accounting. Ultimately the purpose of reporting is partly for accountability and, as we tried to address in the special issue, this extends to being part of pluralism and bureaucracy. 

Thank You Trevor !

I am delighted to get your support, as I am not a specialist. I reiterate my congratulations for this special issue which is propably the sign of a paradigmatic turn within the field of accountancy. Your contribution makes me more confortable for the development of my own research about alternative activity models and regional prosperity models. You gave me back a positive energy.

Thank you so much !

Regards,