But since not everyone was taught integrity or has a natural bent towards honesty,
there are ways businesses can protect themselves against fraud. An article from
the Houston Chronicle states,
At the core of accounting ethics is the strict adherence -- as much as is
possible
-- to generally accepted accounting principles (GAAP). These are the
basic rules of accounting laid out by the Financial Accounting
Standards Board, and their use ensures the reliability, comparability
and integrity of financial statements. In some rare cases, business
circumstances may require diversions from GAAP. In these situations,
accounting ethics require that any departures are fully documented
and clearly justified for investors or others reading the resulting
financial statements (Petryni).
Professional organizations like the Institute of Management Accountants have
a code of ethics to help accountants solve ethical dilemmas when there must
be a diversion from GAAP (Wild, Shaw, & Chiappetta, 2013, p. 738). A
business should not rely on hoping employees are ethical, they should
establish and enforce principles and policies like a code of ethics that must
be followed by all employees from the top down.
Petryni, M. (n.d.). Houston Chronicle. Retrieved from Chron.com:
http://smallbusiness.chron.com/accounting-ethics-integrity-standards-
24246.html
Wild, J. J., Shaw, K. W., & Chiappetta, B. (2013). Fundamental Accounting Principles, Vol.
2, 21st Ed. McGraw-Hill Education.
