23 the price of ethical behaviour one may think that

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2.3 The Price of Ethical Behaviour One may think that professional accountants will do the right thing, regardless of the amount of personal sacrifice involved. But this is easier said than done. Frenchman [20] posits that in exhibiting ethical behavior, professional accountants often come into conflict with their clients and or employers. This is because what the client or employer wants the accountant to do may be against his professional code of conduct. Knowing fully that resignation is the price that goes with his conflict of ethical conduct with his client and employer, the accountant has no choice than to abuse ethical concepts and remain on his job. Professional accountants in developing countries are scared of losing their present jobs because of ethical conduct since they are not too sure of getting any new job elsewhere. But in most developed countries where the rate of unemployment is very low, a professional accountant can resign from an employment or engagement that conflict with his professional code of conduct, and have a new job or engagement in a short while. The price of losing his job makes professional accountants in developing countries to exhibit unethical behavior. 2.4 Poor Societal ValuesEvery professional accountant comes from a particular society with diverse norms and standards. Cheng [23] is of the opinion that the kind of societal values acquired by the accountant at early childhood have more influence on him than the professional code of conduct. Therefore, professional accountants allow their society values (good or bad) to interfere with their professional judgment in financial reporting. 2.5 Lack of Complete InformationA professional accountant may suspect that activities in which he or she is asked to participate are unethical, but had no complete information of the transactions. In most situations, accountants have neither the responsibility nor the right to investigate their employers or clients. If a further investigation of the facts is not directly related to the accountant’s professional responsibilities, the accountant simply may never have enough information to reach an informal decision as to whether or not specific activities are “ethical” [20]. 2.6 Lack of Clearly Defined Ethical Conduct No code of ethics can address every situation that might arise. Every “ethical dilemma” borders upon the unique situation, having its own facts and circumstances [14]. In many situations, however the ethical course of action is not readily apparent. Assume that a professional accountant is auditing the financial statements of a company. During this audit, the company was acquired by another company. The chief executive of the acquired company is a brother to the accountant (auditors). Has the accountant’s independence been impaired with respect to the company’s audit? Must the auditor resign from the engagement? This case is intended to show that ethical dilemmas do not always have clear-cut answers. This case hinges upon personal judgment, including the closeness of the relationship “between the accountant and the

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