Ethical standards have had vast changes over the years. Michael Josephson, in Chapter 1 of Ethical Issues in the Practice of Accounting, 1992, described the "Ten Universal Values." They were as follows: honesty, integrity, promise-keeping, fidelity, fairness, caring, respect for others, responsible citizenship, pursuit of excellence, and accountability. Good ethics does not always mean good business practices. The purpose of ethics in business is to direct business men and women to abide by a code of conduct that facilitates, if not encourages, public confidence in their products and services (Smith & Smith, 2003, 3). In the accounting field, the American Institute of Certified Public Accountants (AICPA) maintains and enforces a code of professional conduct for public accountants. The Institute of Management Accountants (IMA) and the Institute of Internal Auditors (IIA) also maintain a code of ethics (Smith & Smith, 3). Investors and accounting professionals have a responsibility to provide ethical guidelines for its members to follow; professional accounting organizations fill this role. Investors need to know that there is a universal standard for which they can use to determine if they should invest or not when taking into account financial information a company provides the public.
There are several organizations that mange ethics in accounting practices, writing guidelines and policies for which accountants must abide. The relationship between the three we will discuss is that they are all guided by the Securities Exchange Commission. These guidelines allow investors to have a comparable standard when looking at financial statements of corporations. The Financial Accounting Standards Board (FASB), Securities Exchange Commission (SEC) and Public Company A ...