This document discusses ethical issues in accounting and finance. It outlines five ways that fraud can occur in financial statements, such as through fictitious revenue or concealed liabilities. It describes the roles of different types of accountants, including those employed by organizations and those in professional practice. The document also discusses the purpose of an ethical audit in assessing a business's compliance with standards and identifying necessary changes or training.

1. Ethical issues in Accounting &
Finance

2. Ethical issues in Accounting
 Provides fair and accurate reporting of the financial
position of a business
 Ethical issues
Reporting income, falsifying documents, allowing or
taking questionable deductions, illegally evading income
taxes, engaging in frauds etc

3. Fraud in financial statement can be committed in 5
ways:
 Fictitious revenue-revenues not actually earned
 Fraudulent Timing differences
 Concealed liabilities and expenses
 Fraudulent disclosures or Omissions
 Fraudulent asset valuation-false statement of the
inventory available

4. Types of Accounts
 Financial Accounts
>company uses to report to their shareholders
 Internal Management Accounts
>shows the internal operations of the business and its
financial activities

5. Role of Accountants
 To provide information to the new investors
 2 types of accountants
 Accountants employed by the orgn
>takes care of the internal management accounts of
various depts

6.  2 types
>Management accountant-
 formulating policies
 planning and controlling the activities of the employees
 decision making
 disclosure to shareholders etc
>Financial accountant
 Economic information to the investors, employers,
suppliers, outside people involved in the business etc

7.  Accountants in professional practice
 provides 2 types of accounting service
1. The auditor
- Appointed by shareholders to to audit a particular
company
- Duties include:
 to give an accurate statement about the state of
affairs
 to meet the objectives of the Companies Act
 to be reasonably skillful and careful in identifying the
true nature of accounts

8. 2. Accountants in related services
- Offer services in different fields like:
 Tax services
 Management consultancies
 Insolvency services
 Environmental audits

9. The Ethical Audit
Main purpose- check the actions of a firm
Objectives
 Assess the bus. structure and procedures, systems and
policies
 Whether busi. Activities comply with the standards
 To identify the way in which it does business
 Evaluate whether mgmt has relevent infor. in running the
busi.

10.  To help busi. undergo major alterations like restructuring
 To identify the training necessary for the employees
 Establishing ethical conduct of business to attract valuable
investments
 Establish code of conduct
 Helps the shareholders to evaluate the performance of
the directors and vice versa

11. Ethical issues in Finance
Importance of Financial Statement
Steps to be taken by the management for
true, fair and reliable mgmt accounts:
 Determining the key elements of the business like the
objectives and see how they are defined and
measured
 Making sure that the funds are allocated to different
activities on the basis of their importance
 Frame rules that have a positive effect on business
activities