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![](/i/favi32.png) Financial Accounting for Decision Makersfinancial-accounting-for-decision-makers-ninthnbsped-9781292251356-1292251352 compress28
CHAPTER 1
INTRODUCTION TO ACCOUNTING
Despite the many examples of unethical acts that have attracted publicity over recent
years, it would be very unfair to conclude that most businesses are involved in unethical
activities. Nevertheless, revelations of unethical practice can be damaging to the entire busi-
ness community. Lying, stealing and fraudulent behaviour can lead to a loss of confidence in
business and the imposition of tighter regulatory burdens. In response to this threat, busi-
nesses often seek to demonstrate their commitment to acting in an honest and ethical way.
One way of doing this is to develop, and adhere to, a code of ethics concerning business
behaviour.
Accountants are likely to find themselves at the forefront with issues relating to business
ethics. In the three examples of unethical business activity listed above, an accountant would
probably have to be involved either in helping to commit the unethical act or in covering it up.
Accountants are, therefore, particularly vulnerable to being put under pressure to engage in
unethical acts. Some businesses acknowledge this risk and produce an ethical code for their
accounting staff.
Real World 1.7
provides an example of one such code.
The only way is ethics
Vodafone plc, the telecommunications business, has a code of ethics for its chief executive
and senior finance and accounting staff. The code states that they to have a duty to:
. . . act with integrity. Integrity requires, among other things, being honest and candid.
Deceit, dishonesty and subordination of principle are inconsistent with integrity. Service to
the Company should never be subordinated to personal gain and advantage.
The code specifically states that they must:
■
act with integrity, including being honest and candid while still maintaining the confiden-
tiality of Company information where required or in the Company’s interests;
■
observe, fully, applicable governmental laws, rules and regulations;
■
comply with the requirements of applicable accounting and auditing standards and
Company policies in the maintenance of a high standard of accuracy and completeness
in the Company’s financial records;
■
adhere to a high standard of business ethics and not seek competitive advantage through
unlawful or unethical business practices; and
■
avoid conflicts of interest wherever possible. Anything that would be a conflict for a Rel-
evant Officer will also be a conflict if it is related to a member of his or her family or a close
relative.
Source
: Code of Ethics Vodafone plc Accessed 13 February 2019 www.vodafone.com.
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