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Professional and Personal Reasons for My Resignation from the Company - Literature review Example

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The main reason I am writing this memo to the board, is to offer a detailed explanation as to why I had to resign from the company as the Financial Accountant. The reasons I will spell out in this memo range from professional and personal reasons. However, the actual reasons…
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Professional and Personal Reasons for My Resignation from the Company
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MEMO To The Board of Boyds TSD Bank From Former Financial Accountant of Boyds TSD Bank 28th December, Re Professional and personal reasons for my resignation from the company The main reason I am writing this memo to the board, is to offer a detailed explanation as to why I had to resign from the company as the Financial Accountant. The reasons I will spell out in this memo range from professional and personal reasons. However, the actual reasons stems from the fact that I had noted on the group accounts that there were no provision for the mis-selling of financial products and my quest in seeking further information regarding this before finalizing the accounts was frustrated by the Finance Director, Mr. Larry Lizard who insisted on the group accounts being completed immediately. This situation presented an ethical dilemma on my part since there was a conflict of interest between my personal responsibilities an employee as well as professional responsibilities, and the ethics involved therein. Ethical responsibilities of qualified accountants To begin with, Burgstahler et al. (2007) stated that accounting is essentially concerned with recording, measuring, and communicating information relating to the financial health of a company to interested parties that are internal and external to the business. The process begins at the point of transaction or when an economic event takes place such as offering of essential services or the receipt remuneration for the good or service delivered. The process ends when the economic event is recorded in a financial statement that is designed to enable the prospective users to make well-informed decisions in regards to their dealing with the company. Therefore, it is correct to state that the main duties of accountants is recording and reporting of financial information and this means that they bear greater responsibility in regards to the impact the financial statements will have on the users especially the decision taken in reliance to the financial statements (Roslender and Hart, 2003). With reference to the writings by Shah et al. (2011), they stated that because of the sensitivity of accounting duties, accountants are normally required by the law as well as the professional body to abide by certain ethical standards. In the writings by Bennett et al. (2006), they stated that ethics in the field of accounting refers to the study of moral values and judgments as they apply to accountancy practice. Cheffers and Michael (2007) added that in the present moment there is great emphasis on accounting ethics, which is largely, attributed to the recent corporate scandals that even resulted to the collapse of some financial institutions. In order to counter-attack the criticisms and hinder fraudulent accounting practices, various professional accounting bodies and government agencies have designed remedies and regulations that are aimed at improving ethics within the accounting profession (Love, 2008). One of the key ethical responsibilities that have been imposed on qualified accountants across the World is integrity, of which Duska et al. (2011) described it as the act of being straightforward and honest in all professional and business relationships. Edward (2006) stated that this ethical responsibility is built on the premise that the advice and work performed by qualified accountants should not be influenced by self-interest or the interest of others. The International Ethics Standards Board of Accountants’ (IESBA) Code of Ethics section 110 under the integrity section states that a qualified accountant is not allowed to knowingly associate with financial statements that he or she believes that the information contained in such statements is misleading. Additionally, a qualified accountant is forbidden from knowingly associating with financial statements that has been furnished in a reckless manner and thirdly, statements that have numerous omissions of certain crucial information, which makes the entire statement misleading. The second key ethical responsibility that has been bestowed on qualified accountants is objectivity of which according to Guy et al. (2003), it prohibits qualified accountants from not allowing bias, conflict of interest, or undue influence from external parties to hinder their professional judgment. According to the IESBA code of ethics under the section of objectivity it is noted that qualified accountants are prohibited from performing a professional service if there is bias involved or undue influence that impairs the accountants’ professional judgment. The third ethical responsibility is professional competence and due care, which require qualified accountants to maintain their professional skills and knowledge at a desirable level to ensure the employer or clients receives competent professional services (Hilton, 2005). With reference to the IESBA code of ethics it is noted that the provision of competent accounting services requires qualified accountants to apply sound judgment whilst utilizing their professional skills and knowledge in the performance of accounting tasks. Under professional competence and due care, qualified accountants are required by the IESBA code of ethics to make employers, clients, and other users of financial statements aware about the limitations that are inherent in the services that they provide. The other ethical responsibility bestowed on qualified accountants is confidentiality on the information that has been acquired because of professional engagements and therefore, they should not be disclosed to third parties without proper authorization (Hoffman 1996). According to the IESBA code of ethics, qualified accountants are required to maintain confidentiality even if they end their relationship with their employers or clients. According to Johnsson and Per (2005), the other ethical responsibility bestowed on qualified accountants it to comply with relevant regulations and laws and avoid actions that could possible discredit the profession. Comparing and contrasting the duties and responsibilities in the two roles of employee and professional accountant Based on the writings by Davis and Andrew (2001), it can be stated that as a financial accountant working for the Boyds TSD Bank, I was obligated to adhere to the instructions issued by the manager in-charge who is Mr. Larry Lizard, the Finance Director of the company. However, complying by the directions issued by Mr. Lizard presented a conflict on my part as an employee who is expected to adhere to the instructions issued by my seniors and as a professional accountant who is expected to adhere to the ethical principles stipulated by law and professional accounting bodes such as the IESBA. If I had opted to complete the groups’ accounts by Mr. Lizard without creating a provision for the mis-selling of financial products then it would mean that I had respected by boss wishes/ directions but it would mean I have violated the ethical responsibility that is bestowed on all qualified accountants. By respecting Mr. Lizard wishes, it would provide me an additional security for my job since I obliged by the instructions that he gave me. However, the violation of my professional ethics presents more detrimental effects than the guarantee of long-term employment since such violations according to Bean and Richard (2006), could result in me being banned from practicing accountancy for unspecified duration of time. On the other hand, violating my employer or boss’ wishes could only result in me being dismissed from employment or maybe being demoted from my position but I will not be legally liable for the failure to comply by the wishes. In the case of violating accounting professional ethics, I could be legally liable and there are high chances I might be convicted for committing a crime that is against the ethical principles of which I made a contractual agreement to abide by whilst practicing accountancy (McPhail and Walters, 2009). In particular, abiding by Mr. Lizard instructions of completing the groups’ accounts without creating a provision for mis-selling of financial products would mean that I violated ethical principles of integrity since I failed to be straightforward and honest while completing the group accounts (Mills, 2003). Secondly, it would mean that I violated the principle of objectivity since I allowed undue influence from the Finance Director to override my professional judgment (Preston et al. 2006). Thirdly, it would mean that I violated the ethical principle of professional competence and due care as I would have failed to maintain professional knowledge and skills at the level that is required to ensure the bank received competent accounting services (Stuart, 2004). Lastly, it would mean that I violate the ethical principle of adhering to professional behavior as prescribed by the law and accounting accreditation bodies, which would discredit the profession (Williams and Elson, 2010). Wider responsibility of qualified accountants in relation to the public interest In the studies conducted by Blake and Gowthorpe (2013), they mentioned that public interest in the performance of accounting duties arises from the fact that financial statements are used by the members of the public in making a decision whether to invest in the public company or not. Therefore, the wider responsibility of qualified accountants in relation to the public interest is to ensure that financial statements of public companies are accurate and contain all necessary information that are required to make a sound judgment about the financial health of the company and even make a decision as whether to invest in the company or not. Additionally, Bean and Richard (2007) wrote that qualified accountants have a wider responsibility to the public interest of building and maintaining the credit and reputation that is associated with accounting profession. Based on the information that I have presented in this memo I hope it is convincing to you as to the reasons as to why I resigned from the company of which largely revolve around avoiding to violated ethical principles in the accounting practice. References Bean, D. and Richard, A. 2007. "Accounting Ethics Courses: Do They Work?". The CPA Journal. Bean, D. and Richard, A. 2006. "Ethics in Accounting Education: The Forgotten Stakeholders". The CPA Journal. Bennett, B. Michael, B. and Helen P. 2006. "Rules, Principles, and Judgments in Accounting Standards". Abacus 42 (2): 189–203 Blake, J. and Gowthorpe, C. 2013. Ethical Issues in Accounting. London: Routledge Burgstahler, D., Horngren, C. T., Schatzberg, J., Stratton, W. O. and Sundem, G. L. 2007. Introduction to management accounting, 14th ed., Pearson/Prentice Hall, Upper Saddle River, NJ. Cheffers, M. and Michael P. 2007. Understanding Accounting Ethics. Sutton, Massachusetts: Allen David Press Davis, M. and Andrew, S. 2001. Conflict of Interest in the Professions. Oxford: Oxford University Press, 2001. Duska, R. Duska, B. and Ragatz J. 2011. Accounting Ethics. Hoboken, NJ: John Wiley & Sons Edward, K. 2006. Accounting Ethics: Critical Perspectives on Business and Management. London: Routledge. Guy, M. D.R. Carmichael, D. and Lach, L. 2003. Ethics for CPAs: Meeting Expectations in Challenging Times. Hoboken, NJ: Wiley Publisher Hilton, W. 2005. Managerial Accounting: Creating Value in a Dynamic Business Environment (6th edition). Boston: McGraw Hill/Irwin Hoffman, M. 1996. The Ethics of Accounting and Finance: Trust, Responsibility, and Control. Greenwood Publishing Group International Ethics Standards Board of Accountants’ Code of Ethics. 2009. Accounting Code of Ethics. Retrieved from: http://www.icaew.com/en/members/regulations-standards-and-guidance/ethics/code-of-ethics-a#integrity. Accessed on [28.12.2013] Johnsson, H. and Per, K. 2005. Performance-Based Reporting. Hoboken, NJ: John Wiley & Sons. Love, V. 2008. "Understanding Accounting Ethics” (2nd edition). The CPA Journal. McPhail, K. and Walters, D. 2009. Accounting and Business Ethics: An Introduction. London, UK: Routledge Mills, Q. 2003. Wheel, Deal, and Steal: Deceptive Accounting, Deceitful CEOs, and Ineffective Reforms. Upper Saddle River, NJ: FT/Prentice Hall Preston, A. Cooper, D. Scarbrough, P. and Chilton, R. 2006. Accounting Ethics: Critical Perspectives on Business and Management (Changes in the Code of Ethics of the U.S. Accounting Profession, 1917 and 1988). London: Routledge. Roslender, R and Hart, S. 2003. In search of strategic management accounting: theoretical and field study perspectives‟, Management Accounting Research, 14(3), 255-79. Shah,H. Malik, A. and Malik, M. 2011. Strategic Management Accounting- A Messiah for Management Accounting? Australian Journal of Business and Management Research. Vol.1 (4) 1-7 Stuart, I. 2004. Ethics in the Post-Enron Age. SouthWestern/Thomson Williams, J., and Elson, R. 2010. "IMPROVING ETHICAL EDUCATION IN THE ACCOUNTING PROGRAM: A CONCEPTUAL COURSE. " Academy of Educational Leadership Journal 14.4: 107-116. Read More
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