CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Ethics in professional Accounting are of utmost importance. Now that widespread corruption in the society and the failure of organization in every parts of the world have once more increased the need for accounting professionals to adhere strictly to the codes of professional ethics prescribe by international Accounting bodies. According to Ogbonna and Appeah (2011), the widespread corruption in the business environment seems to be the order of the day in all societies. Accountants have obligations to shareholders, creditors, employees, suppliers, the government, the accounting profession and public at large Therefore, behaving ethically is an essential and expected trait; as a result an accountant is responsible for the consequences of his moral choices not only for his own life but also on the lives of other people.
There are many situations in which the guidelines or ethical codes appear not too relevant. In such situations, accountants attempt to resolve such issues by choosing from their actions. Many accountants are likely to resolve conflict of interest, situation that border on loss of revenue or job, personal interest and beliefs cultural background and double standards in the application of sanctions without reference to the expectations of the accountancy profession (Akadakpo and Izedonmi, 2013). The issue of what is wrong or right comes up on a daily basis and the practicing accountant, students of accounting, preparer of accounts, accountants planning to set up professional practice, as well as accountants not in practice have obligation to conduct themselves within the limits of good ethical standards.
A well-run profession or business must have high and consistent standards of ethics to stand fast and to stand the test of time (Smith and Smith, 2003). Finance and accounting departments in industries are taking ethical considerations to be extremely important (Vickers, 2005 as cited in Mathenge, 2012). A tension often exists between a company’s financial goals and strategies to improve profits, and ethical considerations with concerns for right-behavior. When the public loses confidence in the ability of the market to prevent corporate misbehavior, it often demands increased government regulation. For example, frequent cases of misconduct by corporate executives have led to the passage of various Acts in Nigeria, Such Acts include the Companies and Allied Matters Act, 2004 Cap C20, LFN, the Economic and Financial Crimes Commission (EFCC) Act, 2004, the Investment and Securities Act (ISA) 2007, the Independent Corrupt Practices and other Related Oences (ICPC) Act 2003, Banks and other Financial Institutions Decree 2004, the Nigerian Deposit Insurance Corporation Act 2006, Money Laundering Act, and many others. The ethical lapses among public accountants, these has necessitated a revision of the accounting professional standards (Rist, 2002). Interestingly, professional accountant working in accounting firms are faced with new challenges within the profession because of the debacles of large corporations (Swi, 2002). Organizational cultures and environment pose a good opportunity for accountants to exploit the loopholes in reporting and financial management. Though finance and accounting departments in most organisation are expected to foster the growth of ethical education and awareness but they are often faced with stiff resistance from the top level management (Fisher and Lovell, 2009).
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