Ethics Research Essay Financial Analysis

Question: Describe about the Ethics Research Essay for Financial Analysis. Answer: APES110 has been developed and written in the western world, and adopted throughout the world. How might accountants in non-western cultures respond to this Code? Might we expect Chinese, Indian and Nepalese or other non-western accountants to respond differently to the Code? Explain fully. Accounting is much more than financial analysis, numbers and methodologies used to conduct the analysis. Accounting holds sets of rules and standards that help to preserve the jobs purpose (Lee, 2012). It is shaped by various external and internal forces that control accounting practises. Furthermore, the accounting practises symbolise and signify the culture in which the practices are performed. Hence, it can be seen that the APES 110 code of accounting ethics are developed keeping in mind the western culture which is quite different than that of the non-western culture. The APES 110 Code of Ethics for Professional Accountants, are bindings on all members of the accounting professional bodies. Broadly, these standards aim to regulate members ethical conduct and the performance of the professional services across various types of professional engagements. Hence, it is important to observe the cultural difference between the western countries and non-western countries to analyse the impact of implementation of APES 110 Code of Ethics for Professional Accountants on non-western accounting practices. The paper has been developed to present an overview of APES 110 Code of Ethics for Professional Accountants and discuss the difference in cultural between the western and non-western countries (Turner Weickgenannt, 2013). Hence, the study focuses on conducting a literature review using the theories developed by Hofstede (2010), Gray (1988) and Godfrey (2006). Furthermore, the study presents the impact of APES 110 on non-western culture and the response of non-western accountants on APES 110 implementation. Finally, the paper ends with recommendation to simply APES 110 code of ethics for the non-western accounting professionals. Gray (1988) identified specific accounting values to be maintained by professional accountants. By identifying the professionalism versus statutory regime, it defines that the professional accountants must be given the control of APES110 code of ethics to be followed at the highest standards. Also, the standards of uniformity versus flexibility have been recognised to understand the level of flexibility in the APES110. Apparently, Gray (1988) formulated the secrecy versus transparency of APES110 code of ethics to detect the confidentiality and transparency of the ethical codes. Significantly, Gray (1988) classified the cultural area of global accounting system based in diverse cultural terms such as Western, Asian and developed Latin culture. Hofstede (2010) distinguished cultural values based on four dimensions such as Power distance, uncertainty avoidance, individualism and masculinity in order to solve near-term issues. Invariably, power distance signifies the inequality of the power among the members of a corporation. Clearly, due to such inequality of power, different countries with distinct cultures promote diverse ethical code of practices. Moreover, countries such as China, India and Gulf countries have possessed high level of power distance whereas in Austria, Denmark and Norway, low level of power distance is accepted. Also, western culture promotes uncertainty avoidance at the highest level following strict law and regulations. On the other hand, countries such as China, India and majority of the Asian countries prefer uncertainty avoidance tactics. Hofstede (2010) again divided the non-western countries into two categories namely individualism and collectivism. The individualism theory presents the extent to which an individual belongs to a group. Individualism is a way of focusing on individual practices irrespective of considering the welfare of the society. It can be seen that Australia, the United Kingdom and the United States are high individualism countries. Hence, there practices differ from that of collectivism countries such as India, Pakistan, China and Indonesia. On the other hand, Hofstede also differentiate the cultures into masculinity and femininity powers that distributes the emotional roles between the genders. It has been found that women are caring in all cultures but are competitive and assertive in the masculine countries. Hofstede provides the examples of high masculinity countries as Hungary, Austria and Japan. On the other hand, the low masculinity countries are Norway, Denmark and Finland. Finally, Godf rey (2006) presents a developed theory based on the finding of Gray (1988) and using Hofstede (2010) researches, to identify the differences in the accounting systems based on the variations in cultural practices in different countries. The distinct cultural patterns among the western accountants because of variations presented by Hofstede (2010) and Grey (1988) have promoted a different style of auditing and accounting standards. Due to globalisation, though the cultural gap among the corporate public has been declined, the thinking pattern and negation style of the western accountants is far different from the non-western cultures. In western accountant culture, the value view and group consciousness are distinctly different from that of Chinese or Japanese. Clearly, western cultures prefer value view of equality in practices focusing on individualist approaches to develop codes that can be used by the professionals. Through the identification of the APES 110 Code of Ethics for Professional Accountants, the professional agents have followed definite rules and regulations (Coppage Sriram, 2012). The fundamental principles of the accounting ethics culture include assurance engagement, assurance team and audit team to perform the given tasks following the standards of ethics On the basis of the APES 110 Code of Ethics for Professional Accountants, the western world maintains direct financial interest including director, engagement partners, quality control review management, engagement team, existing accountants and external experts so that the highest standards can be preserved based on the individualism theory. On the other hand, in context to the non-western culture, accountants ethical judgement has been influenced by the structure of the organisation (dric Jallat Shekshnya, 2010). Meanwhile, the moral principle differences have significantly led to the moral disagreement of the western and non-western cultures (Raifman Hinlicky, 2012). Nevertheless, the standards of accounting in the Western world set high standards for the rest of the world to follow, which has been presented by the power distance theory of Hofstede (2010). The APES 110 Code of Ethics for Professional Accountants has several impacts on the non-western accountants (Luo, 2009). The impacts can be categorised into positive as well as negative impacts. Considering the positive impacts, it can be seen that it provides a common set of rules for the new accountants who have recently completed the accounting courses (Fogarty, 2015). Furthermore, it becomes easier for the management to go through the accounting reports such as income statement, balance sheet and cash flow statement that are made using common rules and regulations (Hofstede, 2010). It is important to note that pros and cons are two side of a coin. Therefore, the APES 110 Code of Ethics for Professional Accountants has certain negative impacts on the non-western accounting practices. It becomes difficult for the non-western accountants belonging to different countries such as Nepal, China, India, Japan, and others to understand the codes in English language (Lee, 2012). As western culture is specifically based on English, there comes communication gap for the accountants belonging to non-western culture who have studied in their mother language (Fogarty, 2015). Professional associations have indeed identified the benefits of the APES 110 Code of Ethics for Professional Accountants to set high accounting standards at the corporate level. Currently, the non-western cultural accountants need to evolve with the APES 110 Code of Ethics for Professional Accountants (Duska, Duska, Ragatz, 2011). On that particular note, the non-western accountants have somewhat found the tone of the Codes a little scratchy (Gowthorpe Amat, 2015). Meanwhile, certain cultural values and ethics of the code have certainly influenced the non-western accountant community to maintain high standards compliance with legislation (Triyuwono, 2015). Also, the ethical codes have endorsed self-regulatory framework among the non-western corporate sector influencing the ethical framework of the accountants. Notably, in the contemporary business scenario, Chinese and Indian companies have seemed to be favoured the APES 110 Code of Ethics for Professional Accountants in the financial regime. The collective effort of the accountants can be reinforced to promote continuous learning process. Persuasively, the non-western accountants community has responded in a positive way to the accounting code of ethics (Coppage Sriram, 2012). Though there are some conflicting issues regarding the subject, the usefulness of the codes has prompted non-western cultures to go for the same. In spite of the differences of the cultures, the ethical codes have seemed to be beneficial for accountants promulgation (Jennings, 2012). It can be seen through the analysis that there is need certain recommendations that must be considered to make the APES 110 Code of Ethics for Professional Accountants appropriate for the non-western accountants (Peppas, 2012). First of all, the codes or principles must be developed in different languages that are suitable for accountants of different countries. It will eliminate the communication gap and make it easier for non-western accountants to understand the codes of ethics (Hofstede, 2010). Furthermore, the community of practices for accountants in different countries must conduct seminars to explain the codes to the regional accountants and collect feedback from them. On the basis of the feedback, necessary changes must be made on the APES 110 Code of Ethics for Professional Accountants to make them suitable for accountants belonging to different cultures. In the meantime, the topic has delivered a clear concept of the APES 110 Code of Ethics for Professional Accountants and its impact on accounting proliferation. Identically, the use of high obligation language in the ethical codes has contributed to the performance standards and professional judgement level of the accountants. Also, the significant accounting ethical codes and practices have influenced a massive change leading to the moral and ethical development of the organisations. 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