M.

Florencia Campos Yapura

Professor Benge
ePortfolio Signature Assignment
February 17, 2010

Connections Between Personal Ethics and Financial Reporting

Financial reporting practices are extremely important for a company. Their relevance is
great, especially since the financial reports need to accurately and truthfully represent the
company’s financial position. The information is used by several entities for different purposes.
The government will impose taxes on profits. Creditors, investors and others outside of a
company can decide whether to extend credit or backing. Internal decision makers such as
managers and owners need to decide how to manage resources. The financial reports help all of
these make the best decisions. If these are misrepresented due to faulty ethics, they lose their
value.
Ethics in a company are built from the top down. “The tone at the top” sets a precedent
for how everything is done in the company. If a CEO, as an example, takes shortcuts or
exemplifies less than correct procedures, it is much more likely that employees will behave the
same way. If the CEO adheres to GAAP, stresses doing what is right (whatever that might be in
the situation at hand), or tells a client that he can’t do something because it is not right, this sends
a message. At same time, if unethical behavior starts from the lowest employee at the bottom and
it is communicated that it is not acceptable, it will not continue. These examples might seem
abstract, but it is much easier to imagine an accountant purposefully expensing 100 thousand
dollars of inventory with direction from the CEO. If that is approved by the CEO, one cannot
trust any report.
I am studying to be an accountant currently. I also work in accounting software, teaching
bookkeepers and accountants how to use the software. I hope to one day be one of those that call
for help as they work on a company’s books. I often teach them how to create a journal entry or
explain why the software calls for one to be performed. One can easily create a journal entry to
“fix” the books, but must do so thinking of the possible implications of doing so.
I also do taxes with the Westminster Pro Bono Tax Clinic. I often help clients that have
their own business or are self-employed. There are certain things that are outside of the scope of
things we can do there, but have to adhere to rules and tax code. I work in a supervised position
and my work is reviewed.
When I become an accountant or work by myself as a tax professional, I will not have a
manager, boss, or tax clinic director telling me what I did wrong (assuming I’m in a position of
learning) or what I cannot do. I will be on my own, deciding if my client can legally take a
certain deduction or expense amounts against their books. There have come times when I have
had to tell people to reconsider what they are recording or to seek help from the accountant. I
have also come across situations in my life in which I have had to make a choice, and have been
able to make the right ethical choice. I hope to continue to do so in my professional career as
well as my life.