What is integrity and how does it apply to accounting?

Question

What is integrity and how does it apply to accounting? A good, well thought out question gets you 10 easy points.

Answer 1

In a former life I was an accountant. I had problems with the ease in which my boss' integrity could vanish if it meant giving a difficult answer to corporate.

For me there is no problem with integrity and accounting mixing. As accountants we are the gatekeepers for what information makes it into the monthly financials. We are the keymasters of honesty.

As accountants we were the referees. It wasn't our place to 'slant' the numbers to aid a struggling department---nor was it our place to 'slam' the numbers of a struggling department. Our objectivity in reporting the numbers exactly and as honestly and timely as we could was our whole reason for being.

And yes, I've heard all the slang talk and euphemisms about 'fudging' a number or two. Or 'pidging' a number--or conveniently 'forgetting' an invoice or two that needed to be accrued. For every right way to do accounting there are 3-4 general managers and corporate who are asking you to 'bend' a bit to report numbers that don't 'miss the budget' as much. That's a slippery slope--and one that I'm glad to say I never was on.

I don't do accounting anymore. I had serious problems with my boss who insisted on sending on a report prepared by a general manager she didn't like. The report was full of errors--the GM had a mistake in some of her spreadsheet formulas. My boss KNEW this and asked my opinion if it would be ok to send the report on to corporate! I said "NO. As accountants we should NEVER KNOWINGLY report false numbers! Since you know the numbers are bad you should fix them before you send it on."

I couldn't believe I was actually being asked a question like this from my own boss! Anyway---I left that job for precisely that reason---I felt there was a definite lack of integrity with my boss.

Anyway---if you want to fudge or pidge numbers--go into production or corporate---stay out of the accounting departments out in the field!

Answer 2

Accounting is all about fact. The job of an accountant is to assemble many little financial facts to faithfully create an honest picture of just how the organization has done.

The accountant must have the integrity to record those facts in the manner that will accurately reflect the situation. Without that integrity, things can be recorded in a way that looks better than they are, resulting in financial statements that are misleading. At that point, no one will have any idea of what the organization has done or is doing, and therefore any decisions made will be made on faulty data. Garbage in = garbage out.

The accountant must have the integrity to present an honest picture, warts and all, so management and investors can base their decisions on fact.

Answer 3

Integrity is having the opportunity to cheat or defraud, but not doing it - not because you might get caught and punished, but because it would be stealing someone Else's money and that would conflict with your values.

It would also be giving another person advice that is beneficial to them, even those to give them alternative advice may be beneficial to you.