Since accountants are expected to ensure the truthfulness of financial records and help companies obey ethical standards, ethics is a major aspect of accounting. Just like many other countries, Australia finds that situations involving accountants sometimes demand serious thought and decisions based on morals.
Several actual assignment case studies involving moral difficulties in Australian accounting will be discussed here. It will also come up with strategies and recommendations to help experts address these tough circumstances.
In every case study, the solutions are strongly focused on following Australian laws, ethical rules and professional standards. You’ll find these types of accounting assignment solutions at Myassignmenthelp.expert. Auditors do not bear all responsibility for acting morally; managers must do the same.
Case Study No. 1: Innovative Bookkeeping
The issue: Top management of a public corporation is pushing auditors to alter the books to present profits that look larger. The auditor understands that using such accounting is wrong and may end up misleading the regulators and investors.
Here, the auditor needs to value ethics above the demands of managers. Rather than trying new tactics, they must talk to the CFO, an ethics committee or other top managers inside the company. If they want more research done, they should draw the concern to the Australian Prudential Regulation Authority (APRA) or the Australian Securities and Investments Commission (ASIC).
Case Study No. 2: Competing Interests
The situation: A person uses the services of a chartered accountant because they are a business partner with a close friend. The client asks the accountant to help them reduce their tax by conducting a favourable business appraisal.
Here, the auditor does not have an objective stance due to a clear conflict of interest. Their first priority should be to act with independence and in an ethical way as professionals. The accountant has to tell the client that providing biased appraisals would be unethical and violate professional rules. An independent valuation by another company is important and the accountant ought to suggest this as standard practice.
Case Study 3: Confidentiality of the Client
The outcome: An auditor helps a customer involved in financial misbehavior. Such information as possible tax evasion is freely shared by the customer.
In Australia, accountants are held to strong rules of confidentiality as well as ethical obligations. Here, it is important for the auditor to tell the client that following the law is essential and discuss the possible consequences of tax evasion. If the law requires, the accountant must first get the client’s permission to release private information to the authorities. They may instead propose that the client corrects the mistakes voluntarily and gets legal support if necessary.
Case Study 4: The Independence of Audits
The situation: An auditor is assigned to review the accounts of a business where they are a shareholder. The auditor is afraid that having an ownership interest in the business might make it look like they are not acting impartially during the audit.
The right approach is to quickly report personal ownership in both the firm and the audited company to make sure all ethics and independence standards are followed. Thereafter, the company may look at all the factors and appoint a replacement auditor if necessary. Having transparency during these moments prevents bias or conflicts of interest.
Parting thoughts
Moral problems are very common in the accounting industry and Australian accountants have to deal with many tough situations. But being ethical is important for the entire financial industry and each individual accountant’s reputation.
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