Issues of ethics, regulation and compliance and the extent to which they are constraints or threats to the organisation.

Like many other professions, accounting is a noble profession as well as a profession with ethical standards that accountants are required to follow. However, there are not a few financial and accounting scandals in history. Typically, the scandal that led to the process from the Big Five to the Big Four as well as the decline of Arthur Andersen associated with the Enron scandal.

ARTHUR ANDERSEN was once one of the most influential Big 5 in the world. But by 2002, the collusion between A&A and Enron - one of the largest energy companies in the US-led to the destruction of these two large companies. Arthur Andersen audit and consulting firm to make false reports to deceive shareholders. To hide the fact that the company had borrowed too much to pay, Enron leaders took advantage of a legal loophole to set up subsidiaries without declaring their finances. In this way, Enron both did not have to disclose its debts and conceal the losses. As a result, Enron inflated her profits and her stock price skyrocketed accordingly. In addition to errors such as the failure to detect irregularities in Enron's accounting records, which helped Enron become famous in the market while being at a heavy loss, Andersen was charged with a serious criminal offense of intentionally obstructing Enron. investigative work through the destruction of thousands of documents related to Enron.

From the above story, we can draw that accountants must adhere to the following basic ethical principles:

Integrity: Be forthright and honest in all professional and business relationships;

Objectivity: Not allowing bias, conflict of interest, or any unreasonable influence to govern our professional and business judgments;

Expertise and discretion: Demonstrate and maintain the professional knowledge and skills necessary to ensure that a client or business owner is provided with quality professional service based on up-to-date professional, legal, and technical knowledge, and act with caution and by applicable professional and technical standards.

Confidentiality: Information obtained from professional and business relationships must be kept confidential, therefore, no information may be disclosed to third parties without the prior consent of the relevant party. authority, except where there is a right or obligation to provide information as required by law or a regulatory or professional body, and also not to use the information for the personal benefit of the accountant. , professional or third-party auditors;

Professional Conduct: Must comply with relevant laws and regulations, and avoid any actions that may damage one's professional reputation.

References

Curwen, L., (2021). The collapse of Enron and the dark side of business. [online] BBC News. Available at: < https://www.bbc.com/news/business-58026162 > [Accessed 15 November 2021].

IFAC. (2018). The International Code of Ethics for Professional Accountants: Key Areas of Focus for SMEs and SMPs. [online] Available at: < https://www.ifac.org/knowledge-gateway/building-trust-ethics/discussion/international-code-ethics-professional > [Accessed 15 November 2021].