Research conducted by Chartered Accountants Worldwide and Edelman Data and Intelligence shows that accountants are among the most trusted professionals in the corporate world. They are regarded as credible spokespeople and good decision-makers in uncertain times.1
A dedication to upholding that trust is the foundation of a successful accounting career.
Professional standards and corporate governance help accountants safeguard the integrity of their actions. However, to truly stick to those guidelines, you must have a thorough understanding of the importance of accounting ethics.
This post explores the importance of ethics in accounting, professional guidelines to follow, and how firms can strive to uphold strong ethical standards.
Core Ethical Principles
Some of the most important ethical principles for accountants include integrity, objectivity, and due care. Accountants must be transparent and fair in everything they do, and it's important for them to remain objective in the face of financial or ethical dilemmas. A good accountant must be highly competent, possessing the skills and know-how to perform their job without putting their clients' business at risk.
Accountants should always behave professionally and act with confidentiality in mind, safeguarding their clients' reputations and privileged information. However, despite their duty of loyalty to their clients, an accountant who discovers irregularities must always put the law and public interest above their clients’ or employer's desires.
Key Regulatory and Standard-Setting Bodies
Ethical standards are set and upheld by regulatory bodies in the industry. The following are the most significant regulatory standards for accountants:
U.S. GAAP and IFRS Frameworks
These two global frameworks provide ethical standards for finance and analytics. The U.S. Generally Accepted Accounting Principles (GAAP) are managed by the Financial Accounting Standards Board (FASB), and the International Financial Reporting Standards (IFRS) are managed by the International Accounting Standards Board (IASB).
The GAAP framework provides a strict set of rules for topics like revenue recognition, item classification, and outstanding share measurements, while the IFRS is largely principle-based and offers less detailed guidelines.2 Companies in the US use GAAP to regulate accounting standards. However, accounting professionals should be familiar with both frameworks for a well-rounded understanding of industry ethics.
The AICPA Code of Professional Conduct
This is a set of standards for professionalism established by the American Institute of Certified Public Accountants (AICPA), a non-profit organization representing public accountants in the US. The AICPA's code of professional conduct has guided its members—both CPAs and other accounting professionals—for over 100 years. The code is frequently revised and republished to stay compliant with changing industry standards.3
The PCAOB Auditing Standards
This is the set of standards for auditing public companies, established by the Public Company Accounting Oversight Board (PCAOB), which is a non-profit organization that oversees audits of brokers and dealers registered with the Securities and Exchange Commission (SEC) to ensure fairness. Their auditing standards provide rules for the public accounting firms that perform those audits.4
IFAC/IESBA International Code of Ethics
The International Federation of Accountants (IFAC) and International Ethics Standards Board for Accountants (IESBA) are both global, member-based accounting organizations that manage and report an international code of ethics.
Their code guides ethical accounting practices based on the core principles mentioned previously: objectivity, integrity, confidentiality, and due care.5 Its global scope means that accountants around the world can be aware of the ethical standards their colleagues in international deals are holding themselves to.
Professional Standards Categories
There are numerous sets of standards for ethics and accounting because each set applies to a distinct category of the business.
- Financial reporting is subject to rules that ensure accountants provide fair and valid evidence, objective measurement, and unbiased disclosure
- Auditing and assurance professionals must maintain integrity in handling evidence and assessing risk; they are also subject to materiality standards: rules governing which information is material, or necessary, for a report
- Tax practice is governed by Circular 230, a segment of the Treasury Department with its own regulatory guidelines;6 it defines and enforces rules for ethical tax return preparation
- Advisory and consulting professionals are governed by standards such as GAAP that emphasize objectivity, preventing corruption, bribery, and bias
While it’s important to understand all ethical standards, accountants should focus on studying and following the guidelines most relevant to their chosen career path.
Independence and Objectivity
Objectivity is perhaps the most crucial core principle of ethics in accounting, but it’s also one of the most challenging. Some common challenges to objectivity include self-interest, a lack of self-review, excessive familiarity with clients or employers, and giving into advocacy or intimidation.
Fortunately, there are safeguards to help accounting professionals remain objective. Rotation policies, the practice of randomly assigning clients and changing audit professionals after a period of time, prevent accountants from becoming too involved with a particular client. Separate engagement teams and audit committees provide neutral third-party oversight, while auditing committees keep one person from having too much responsibility.
An awareness of the potential problems can help accountants evaluate themselves fairly. Having a firm understanding of and commitment to ethics helps successful professionals to catch any lapses before they can escalate.
Enforcement and Compliance Mechanisms
The following legal requirements also enforce ethical accounting practices:
- Licensing requirements and continuing education: Accounting professionals must hold current licenses, verifying that they are up-to-date on ethical standards
- Reviews and sanctions: Organizations such as the PCAOB and the SEC conduct reviews, audits, and inspections, and can enforce sanctions on professionals who neglect ethical standards
- Whistleblower protections: Anonymous hotlines and protections for whistleblowers allow observers to safely report unethical behavior
Common Ethical Dilemmas
Ethical dilemmas occur in every workplace. Earnings management issues, potential bribes, client pressure to waive material misstatements, and confidentiality breaches are all common issues an accountant might encounter.
In 2024, the Association of Chartered Certified Accountants (ACCA) published a report showing that these dilemmas are becoming increasingly difficult to navigate due to changing work cultures and new technology. The study noted that 64% of accountants found ethical issues more challenging to resolve than they had a year earlier. This is partly due to changes in work cultures, the use of AI technology in accounting, and public calls for more sustainable business practices.7
As times change, ethical standards must adapt. Accounting professionals are responsible for keeping up with changes in ethical guidelines and using their best judgment—abiding by principles of objectivity, due care, confidentiality, and professionalism—whenever dilemmas arise.
Best-Practice Framework for Firms
How can accounting firms stay ahead of ethical dilemmas and enforce ever-changing ethical standards? It’s all about creating a positive culture of prevention. One important step is to set the tone from the top down. Leaders at the firm should demonstrate ethical behavior and encourage employees to come to them with any dilemmas they encounter. Firms can also implement independence checks and conflict-of-interest registers on a regular basis, assessing their risk of an ethical mishap.
Ongoing training and workshops will help everyone at the firm stay up-to-date on ethical standards.
Add Ethical Expertise to Your Accounting Credentials
Accounting professionals are trusted with sensitive financial information and expected to make fair, objective decisions every day. Upholding ethical standards protects stakeholders and makes for a successful accounting career.
Accounting firms should establish a culture of ethics with regular reviews, trainings, and workshops. Individual accountants can also stay up-to-date on ethical standards with the right education.
The Online MBA and Online MS in Finance and Analytics at the SCU Leavey School of Business are taught by experienced faculty and offer students the opportunity to connect with business leaders from nearby Silicon Valley. The broad alumni network puts you in touch with people working around the world.
If you’re interested in improving your accounting abilities with an online degree, speak with an admissions outreach advisor today.
- Retrieved on July 2, 2025, from theaccountant-online.com/news/accountants-among-most-trusted-professionals/?cf-view
- Retrieved on July 2, 2025, from indeed.com/career-advice/career-development/fasb-vs-iasb
- Retrieved on July 10, 2025 from tax.thomsonreuters.com/blog/aicpa-code-of-professional-conduct-what-accountants-need-to-know/
- Retrieved on July 10, 2025 from pcaobus.org/oversight/standards/auditing-standards
- Retrieved on July 2, 2025, from ifac.org/knowledge-gateway/discussion/international-code-ethics-professional-accountants-key-areas-focus-smes-and-smps
- Retrieved on July 2, 2025, from irs.gov/tax-professionals/office-of-professional-responsibility-and-circular-230
- Retrieved on July 2, 2025, from theaccountant-online.com/news/acca-report-ethical-dilemmas-accountancy/?cf-view