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Abstract
This study will assess the impact of professional accounting ethics on the qualitative
characteristics of financial reporting for listed firms on the Ghana Stock Exchange (GSE),
specifically Cape Coast. Data for the study will be collected from secondary sources from
sample of 10 listed firms on the GSE. The data collected will be analyzed with means score and
standard deviation. This study will help us analysis and discover among others the influence of
researcher wants to carry on this study to know it effects of the confidents of investors,
borrowers, other users of accounting information and the economy at large. The result on this
study will enable employers to either attach more importance on training professional
accountants for the task ahead before being deployed to the field and monitoring their
Key words: Professional ethics, Accounting ethics, qualitative characteristic, financial reporting.
INTRODUCTION
guide members in performing their job functions according to sound and consistent ethical
principles. The history of the need for accountants to establish high ethical standards began with
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the failure of the technology bubble followed by the collapse of Eron, WorldCom and Arthur
Anderson among others (Rockness & Rockness, 2010). Accountants have therefore established
professional accepted standards of personal and business behavior, values and guiding principles.
Key qualities which appear in codes of ethics of professional bodies include independence,
England and Wales introduction to its Guide to Professional Ethics includes a list of five
fundamental principles which either expressly or clearly implies all of these qualities, along with
other related qualities such as honesty, fair dealings, truthfulness, courtesy, skill and diligence
(Gowthorpe, 2005).
The measures ensure that accountants have ethics education to improve chances that
practicing accountants make ethical decisions when confronted with difficult choices. Codes of
the wide spread of corruption in the society and the failure of organizations in every part of the
world which seems to be the order of the day. Since financial reporting forms the basis for
economic decision making, the financial reports should be based on certain fundamental qualities
reliability for various users to understand the content of the report. The accountant is responsible
for the consequences of his moral choices hence, an accountant who commits fraud does not only
ruin his own moral being but also harms the interests of other members of the society who
depend on his report (Catacutan, 2006). Therefore, providing high quality financial reporting
information is important because it will positively influence capital providers and other
stakeholders in the making investment, credit and similar resource allocation decisions
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Statement of the Problem
The Code of Corporate Governance (2011) provided for the composition of an ethics
issues as well as upholding ethical standards in the organization. This has not really yielded the
right result as intended as some of the scandals over the past decade have been traced to ethical
issues where most times management and auditors compromised integrity for personal and
selfish gain to the detriment of the organization. Enron manipulated its statement through off
balance sheet financing because they lacked independence from senior executives, Cadbury
overstated its audited financial statements, African petroleum concealed its indebtedness to the
tune of 22 billion, the financial sector crisis also witnessed few years ago also revealed that the
banks connived with the auditors to issue a true and fair view. A critical look at all these cases
show that they all were as a result of the violation of ethical practices, hence there’s need to
critically appraise ethical issues in an organization and how they affect financial reporting
quality
the qualitative characteristics of financial statements of stated firms in Ghana. However, this
1. To examine the effects of accounting ethics on disclosure of items in the financial statement.
2. To ascertain the effects of accounting ethics on the objectivity and authenticity of financial
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3. To discover the impact of impact of accounting ethics on the integrity of financial statements.
Research questions
1. What is the effect of accounting ethics on disclosure of items in the financial statement?
2. To what extent does accounting ethics affect the objectivity of financial statement of stated
firms in Ghana?
LITERATURE REVIEW
This section reviews and analyses the empirical works, articles, journals and researches carried
1989). According to Ogbonna and Appah (2011), Ethics are the moral principles that an
individual use in governing his or her behavior. It is the personal criteria by which an individual
distinguishes right or wrong”. In Ogbonna’s view, when we talk about ethics and ethical values,
we mean our concern about things, which we think, say and/or practice that may not necessarily
violate the rules of the organization or infringe the law of the land or amount to outright crime or
felony, but which borders on our sense of morality, our sense of right and wrong. It concerns
itself with issues like conflict of interest, insider’s dealings, compromising integrity, objectivity,
for financial benefits and other similar acts that are against moral principles and ethical
standards.
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Nwagboso (2008) argues that ethics or morality as matters of good and evil, right and wrong and
subscribes to the fact that “we are living today in an ethical wilderness”. He believes that ethics
is in ferment and chaos among all people. Ethical theories is the substantive proposals regarding
those consideration that would determine morally acceptable conduct and applied ethics is the
deliberation related to a specific field of enquiry. Examples include ethics in business, public
service and general professional ethics. According to Jenfa (2000) and Nwagboso (2008),
professional ethics provides accountants with certain advantages such as determining the
professional posture he should adopt if he is to succeed and determining the prosperity of his
conduct in his professional relationship. Professional ethics has significant position in the
organization of that federation of Accounting Professions (FAP) and in Australia, ethics are at
present the responsibility of an accounting Professional and Ethical Standards Board limited
(Gaffikin, 2009). Ogbonna and Appah (2011) investigated the effect of ethics on financial
reporting quality in Nigeria using a sample of 123 accountants. The study found out that ethical
compliance by the accountant positively and significantly affects the quality financial reports.
Nwagboso (2008) says that accounting is a profession that rests heavily on the need to exhibit a
high sense of accountability and stewardship, hence the emphasis that all members be guided by
professional code of conduct. Aguolu (2006), Jenfa (2000), Okezie (2008), Nwagboso (2008),
Nwanyanwu (2010) and Ogbonna and Appah (2011) provided the fundamental guidelines
Integrity: This is the quality of being honest and having strong moral principles. It
implies not merely honest but fair dealing and truthfulness. This principle of integrity imposes an
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obligation on all accountants to be straight forward and honest in professional and business
relationships.
accountants to be fair, intellectually honest and free from conflicts. This principle requires four
services implies that he is competent to perform the services. Accountants should refrain from
agreeing to perform professional services which they are not competent to carry out unless
should not use or disclose any such information without proper and specific authority.
independent attitude in fulfilling their responsibilities, but the users of financial reports must
Technical standards: Professional services should be carried out in accordance with the
relevant technical and professional standards. The services should conform to the technical and
Financial reporting according to Nzotta (2008) is a critical issue which affects the decision
making process of various individuals, corporate bodies, investors and policy makers. Glautier
and Under down (2001) says that the primary objective of financial reporting is to communicate
economic measurement of an information about resources and information about the resources
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held by entity and performance of the reporting entity, useful to those having right to such
information.
al (2009) observed that the fundamental qualitative characteristics (that is, relevance and faithful
representation) are most important and determine the context of financial reporting information.
and timeliness) can improve decision usefulness when the qualitative characteristics are
established. To assess the quality of financial reporting, various measurement methods have been
used. The most widely used in prior research to assess the quality of financial reports include
accrual models, value relevance models, research focusing specific elements in the annual report,
three characteristics. It would be complete, neutral, and free from error. The IASB intends to
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Comparability: Information about a reporting entity is more useful if it can be
compared with similar information about the same entity for another period or another date
to be capable of influencing their decisions. Normally, the older the information is the less useful
it is.
RESEARCH METHOD
The research method to be adopted for this study is the descriptive research design as it
enables the research elicity. Information from the respondents on the subject matter under
investigation. A diagnostic analysis and survey research shall be particularly used as diagnostic
reasons for outcomes and specifically focuses on the beliefs and feeling respondents have about
and toward specific issue. However, survey research will also be adopted for the reason that
there is a need to gather evidence from the various Banks operating in the Banking firm which
we have decided to survey. The term survey is most frequently to refer to a way of collecting
Research Design
According to Ogolo (2007) research design is an outline that serves as a useful guide to
the researcher in his work, and in his effort to generate data for the study. It describes the
process, and methods and procedure for data and information gathering. The design of this study
is done in such a way to covert as necessary and relevant data, records and information that
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would help in attaining the objectives, and help us to test the hypotheses, to control variances and
minimize error. Research design is the strategy, plan and structure of conducting a research
project ( Kweit and Kweit, 1981). Research instruments should be valid and reliable (Marczyk et
al. 2005). To measure what an instrument is expected to measure and perform as is planned to
perform is known as validity. Validation is a process that consist of a collection and analysis of
data that assesses the accurateness of an instrument. Validity can be measured base on construct
Validity construct centers on the structure of the survey. The researcher ensured that the entire
questions of the survey were clear and brief. Furthermore, closed ended questions will be used to
make it easier for participants to complete questionnaires. Content validity is also defined as the
appropriateness of what an instrument entails. The measures, that is, questions or observation
logs cover the purpose of the study. (Saunders et al. 2009) describes techniques used in
collecting data as measures taken in overseeing instruments and data collections from topics
under study. Arrangements will be made with research participants through telephone and
Data Collection
The primary data for the study will be generated through the administration of questionnaire
conducted to evaluate ethical accounting standards on the quality of financial reports of banks in
Ghana (cape coast). On 50 respondents from the sample of 10 banks (commercial bank, Zenith
bank, Prudential bank, fidelity bank, ADB, Barclays bank, HFC Bank, Data bank, Standard
Chartered, GN bank) from accessible population 15 banks in the Cape coast in the central region.
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However, a secondary data based on the examination of documentation reports from
authoritative bodies like ICAG, ACC, others alike, will be principally valuable in this esteem in
that, it aids to structure and contextualize the impact of professional accounting ethics on the
Research Ethics
Ethical aspect of this research will not be taken for granted. The consent and approval of all
respondents shall be seek before any data and information will be retrieved from them. They
shall be assured of confidentiality of their personality and any data given us and shall be used for
This study will focus on the effect of ethics on financial reporting quality. Geographically, this
study will be limited to banking firms operating in Ghana. The study focused on firms operating
in Cape coast, Central region. The population from which we seek to collect the relevant data
and information will be staffs (tellers, inquiry desk), Internal Auditors, management, Accounts
and Finance officers in the aforementioned banks in Cape Coast, Central region.
To achieve this objective, the study is divided into five sections or chapters. The second section
examines relevant theoretical and empirical literature on ethics and financial reports; the third
TIME SCALE
TASK TO BE COMPLETED
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Idea formulation and introduction 19/02/2018
Background 24/02/2018
objectives
Draft dissertation
REFERENCE:
Sidik, MH & Rahim, RA (2012), The benefits and challenges of financial reporting standards
sciences.
Adeyemi & Fagbemi (2011). The Perception of Ethics in Auditing Profession in Nigeria. Journal
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Aguolu, O. (2016). Ethics and integrity in the accounting profession. Nigeria. Account. (5th Ed)
Ajibolade, S.O. ( 2008). A Survey of the Perception of ethical behaviour of future Nigerian
Ogbonna, G.N. & E. Appah, ( 2015). Ethical Compliance by the Accountant on the Quality of
ACCA. (2016). The five fundamental ethics principles: Retrieve from www.accaglobal.com.
ICAG. (2013). Code of ethics for professional accountants content: Retrieve from www.ifac.org
Haruna N., & Tweneboah E. S. (2017). Analysing the critical effects of creative accounting
practices: www.mpra.ub.uni-muenchen.den
Awuku, A. A. (2015). IFRS adoption: costs and benefits for companies listed on Ghana club 100
Ogbonna. G.N. & Ebimobowei A. (2012). Effect of Ethical Accounting Standards on the Quality
4(1): 69-78
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