Why Are Ethics Important in Making Accounting and Financial Decisions?
Accounting may be perceived to be many things and this is likely so given that it is actually a broad field. But, if you put it succinctly, it is just the process of describing the processes of a business in through numbers.
Accounting is very important because it helps represent what is actually going on inside the company in terms of the financial aspect.
Bookkeepers and accountants should always ensure that their financial reports remain true and accurate. Failure to do so will have dire consequences, especially for stakeholders, business owners, and tax reporting agencies.
Hiring accounting and bookkeeping services in Malaysia will give you the assurance that the financial statements that the firms are going to make will be accurate and valid.
Today, I am going to talk about why ethics are important in making business accounting and financial decisions.
When you are a business owner, your company is accountable to a wide range of shareholders, which includes your business partners, investors, and your customers. All of them need to know the truth about your company, especially your financial health. The information that is stipulated on your financial records should be true because it can have a sway on sound investment decisions.
A business owner, like their employees, should also fill up some tax forms for their ventures as well. All of us are obligated to pay taxes and since businesses usually earn some income, then you are required to pay sales and corporate taxes whenever applicable.
That being said, your tax information should be fair and accurate when you write them down on your tax forms. If you were to provide inaccurate information on your forms, it may lower the amount you have to pay, but you will incur heavy fines and penalties if you get caught. In extreme cases, the tax-collecting agency might file a lawsuit against you.
Accounting, in this sense, ensures that you will be filing your tax forms replete with valid and accurate information so that not only will your conscience be clear, but you can also stay away from trouble as well.
Bookkeepers and accountants have a huge responsibility to give business owners accurate information about their company’s finances so that their owners will be able to facilitate sound planning and will create decisions based on what they are presented.
Not only do they need to provide accurate information, but they must also create it in a suitable time frame that is relevant to a particular situation.
For example, if the accountant takes way too much time to create profit and loss statements, then the business owner will have to spend way too much money on payroll and they may miss a golden opportunity to help improve the situation. In other words, the information that is not presented on time will put the business in jeopardy.
Public’s perception of a particular company relies on its credibility and trustworthiness. If your company is found out to be lying on its financial information and if they caught doing so, it will put the business in jeopardy as stakeholders will no longer be able to trust the business owner.
That is why honesty and good ethics should be followed by all accountants and bookkeepers at all times.