For the most part, people as a whole strive for ethics in every facet of life.  After all, if someone can not be trusted to be principled, it depreciates the value of any sort of service rendered.  It doesn’t matter if the person in question is your grocer or your stock broker, it is absolutely imperative that individuals adhere to certain standards within their professions.  Perhaps one of, if not the most important professions to have strong ethical standards in today’s world is the Accounting Profession.  It is, in a way, very reassuring that the American Institute of Certified Public Accountants (AICPA) and Institute of Management Accounts (IMA) each have their own published codes of ethics.  Even more impressive are the government regulations that follow with their own ethics enforcement, with various organizations such as the Financial Accounting Standards Board (FASB) and Public Company Accounting Oversight Board (PCAOB).  These codes are cornerstones that help maintain honesty and independence throughout an important profession.
Because so many people rely on the educated decisions and judgments made by professional accountants, maintaining a proficient level of integrity and objectivity is essential in the business world.  For most people, the concept of integrity is fairly straightforward.  It is the application of personal characteristics of honesty, and comprises, though is not limited to being straightforward in dealing with others.
Whereas integrity is merely the idea of being honest and forthcoming in financial communication, objectivity is a different branch of the ethics tree.  It entails being able to be independent from a conflict of interests.    According to the AICPA’s own published code of ethics, Independence is defined as “the state of mind that permits the performance of an attest service without being affected by influences that compromise professional judgment, thereby allowing an individual to act with integrity and exercise objectivity and professional skepticism.”(ET Section 101.06)  The Code also goes on to make a distinction of Independence in only appearance, which is only the prevention of circumstances that would make it appear as if objectivity had been compromised.  Ideally, any code of conduct would make the two terms mutually exclusive.  In other words, to be totally objective one must maintain Independence in both “fact” and “appearance.”
Though the AICPA has often functioned as the judicial arm of the Accounting Profession, some within the community felt it needed a more objective arm to enforce ethics.  Thus, the Financial Accounting Foundation was created, in response to government criticisms that the AICPA had lost its Independence in dealings.  Under the foundation, the  FASB was also created.  Similar in many aspects to how the Institute’s code of ethics functions, the main project constructed by the board was the Conceptual Framework of Financial Accounting and Reporting.  The FASB has also issued Seven Statements of Financial Accounting Concepts, which range from “Objectives of Financial Reporting by Business Enterprises,” to “Using Cash Flow Information and Present Value in Accounting Measurements.”
The FASB sets their standards through due process, and generally requests input from anyone, be it individual or organization, who is concerned enough to give feedback.  Both the AICPA and IMA are among several other groups that the FASB accepts criticism from.  It’s creation was perhaps necessary to eventually question the objectivity of the AICPA in dealing with it’s own ethics codes.  Despite many economist’s claims that government interference in private business affairs hurts enterprise, the fact remains that regulation is necessary to preserve fair trade.  This “fact” is at heart an opinion, but historically governments who have had either too much or too little control in their countries’ economic affairs have been comparatively infective.  Therefore, the creation of the FASB was a necessity, and the passing of the Sarbanes-Oxley act nearly thirty years later proved that.  The Act, which created the PCAOB,  has the power to set and enforce, among other things, ethics standards in the financial world.  It was created in direct response to the WorldCom and Enron collapses of the early 2000s.
So, ethics proves to be an important factor of our everyday lives.  However, in a field such as Accounting, where virtually the life of  every citizen is affected, it is not something that can be taken for granted.  At the absolute least, most everyone needs to file a tax return, so we all depend on some form of the accounting world.  For decades, the AICPA had a near monopoly on enforcing these codes of objectivity and integrity, but eventually some form of congressional regulation was necessary.  Now, the fiscal world’s collective mind is set at ease with the existence of the FASB and PCAOB, which helps to maintain consumer confidence, which is the essence of any market.  So essentially, accounting ethics function really as a way of preserving consumer confidence, which helps us all sleep a little better at night.

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