Directors and Ethics in Organizations

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When composing board of directors, it is important to have a mix of people working in the organization and people who are not in the company; directors are expected to make sound, timely, and informed decisions, they thus need to be people of integrity, knowledge, and strategic management mind.

When having internal directors, they understand the daily operation of an organization thus they can offer sound direction on the right manner to handle situations; however, their knowledge may only be limited to their business/company only.

When the industry and company understanding is boosted by an external mind (from directors not working in the company) the final decision is more informed and more likely to make the company more competitive (Kieso, Weygandt and Terry 2009).

Although a combination is crucial, it is important to let the directors understand and appreciate their role within the company; it is more better to have directors who are dealing in the same line of industry with the company as he is likely to be in touch with what is happening on the ground in the industry and offer sound information to the management.

When an organization has external directors, there is a sense of responsibility and accountability the likelihood that there will be corrosion to defraud the company is minimal (Machan, 2007).

Ethics in financial Management

Competence

Before someone is registered as a member of any accounting profession management body, one must have attained a certain minimum level of education and professional training.

This forms the entry point. There are changes in accounting field initiated by local policies like finance bills (mostly on matters relating to taxation) and international bodies like International accounting bodies (IFRS and ISA). For competency, an accountant is expected to be up to date with such changes.

Integrity and professionalism

Management accountant report is used by both external and internal customers; the three bodies require their members to act in a professional manner and uphold integrity. When reporting, he is expected to report the case as it is and maintain an ongoing concept of accounting.

He should be honest and manage finances effectively. The three bodies emphasis that an accountant should be acting for the interest of the general public and thus he has a task to give the true standing of a company (Roberts, Weetman and Gordon, 2008).

Confidentiality

Management accountants have access to crucial and sensitive company’s information. Some of these information can be used by competitors to outdo an organization or cause panic to the public especially investors. This places a burden of confidentiality on accountants.

When determining what to disclose and what not to, management accountants are expected to be guided by international accounting standards and reporting standards. The need for confidentiality is to avoid insider dealings.

Credibility

A management accountant is expected to be creditable and can be accountable for all his actions. He should not perform duties which he is aware that he is not qualified to perform or offer misleading advice or limited advice as per his level in an organization. When called upon to act against his professionalism, he should have the courage to say no and keep his integrity intact.

When working, he should ensure that there is no conflict of interest and does his things in a straight forward way. Need for annual membership renewals is seen as a move towards ensuring that there the bodies control their members conduct. If a member has had ethical issues, there are suspended or their membership withdrawn all together (Jones, Parker and Bos, 2005).

References

Jones, C., Parker, M. and Bos, R.,2005. For Business Ethics : A Critical Text. London: Routledge

Kieso, E., Weygandt, J. and Terry D.,2009. Intermediate Accounting. New York: John Wiley & Sons.

Machan, T., 2007. The Morality of Business: A Profession for Human Wealth-care. Boston: Springer.

Roberts, C., Weetman, P. and Gordon, P.,2008. International Corporate Reporting: A Comparative Approach. Boston, MA: Prentice Hall.

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