RESULTS AND DISCUSSION

The main objective of this study is to compare the adherence of the private and public
accountants to the code of ethics. Private accountants are defined to be in-housed accountants
employed by an organization and reporting to the managers of the entity. They may be involved
in preparing internal management reports for decision making such as capital budgeting,
budgeting, and segmental performance analysis. On the other hand, public accountants are
defined to be trained external accountant who has been trained and licensed by the state. They
provide a broad range of financial services, such as preparation of financial statements and tax
returns, providing advice on various aspects of business (operations, management, etc.), and
assisting in the development and installation of effective accounting systems.

Figure 1. Nature of Accounting Job

Public Private
50% 50%

 Private
 Public

The respondents of this study are accountants both in private and public profession. There
are an equal number of private and public accountants who participated in this study so that the
results would yield comparable and consistent results.

Figure 2b. Educational Attainment Figure 2b. Educational Attainment

Masteral
29%

Bachelor Bachelor
100% 71%

 Bachelor  Bachelor
 Masteral  Masteral
Private Accounting  Others Public Accounting  Others

Based on the results, majority of our respondents chose to work already as accountants
after graduating and probably, passing the board examinations. It can be attributed to the fact that
earning a living is way more important than pursuing academic advancement. All of our
respondents in private accounting are only graduates of their Bachelor’s Degrees. This is true
insofar as they are more committed to their works than on academic advancement because they
depend their living in the company. On the other hand, public accountants own their time so they
take the opportunity to pursue graduate studies. In addition to that, public accountants also
commit themselves in the profession of academe for extra income. They cannot teach unless they
already obtain their Master’s Degree.

Figure 3. Professional Years

Others
25% 1-3 years
25%

5-10 years
17% 4-5 years
33%

 1-3 years
 4-5 years
 5-10 years
 Others

The total number of years in the profession is a factor to consider in defining the
meaningful experience of an employee. They personally chose them so that different experiences
may yield from different professional years.

Figure 4a. Practice of Code of Ethics Figure 4b. Practice of Code of Ethics

Yes Yes
100% 100%

 Yes  Yes
 No  No
Private Accounting  Sometimes Public Accounting  Sometimes

The findings show that all of the respondents is adhering and practicing code of ethics in
their profession, regardless if they are engaged in public or private accounting. This is true
because malpractice of the code of ethics in the profession impairs their competence and
credibility.
 Figure 5a. Ethical Dilemmas Encountered Figure 5b. Ethical Dilemmas Encountered
Inaccurate
Accounts Financial
Adjustments Tax Evasion
Reporting 43%
29% 43%
Inaccurate
Financial
Reporting
71%

 Tax Evasion Faulty

Tax Evasion
 Faulty Investment Advice
Investment
 Faulty Investment Advice
Advice
 Inaccurate Financial Reporting  Inaccurate
14% Financial Reporting
 Accounts Adjustments  Accounts Adjustments
Private Accounting  Others
Public Accounting  Others

The graph shows the different ethical dilemmas that most accountants had encountered.
Based on the results, these ethical dilemmas really exist in practice despite the guidance brought
about by the code. Both professions agree that “inaccurate financial reporting” is the most
common of all the ethical dilemmas. Inaccurate financial reporting may include overstatement of
sales revenue for compliance, understatement of net income for tax evasion, fraudulent activities
to conceal irregularities and interests, and the like. However, tax evasion is also an important
matter for the public accountants since it is their works which are used as basis for the periodical
filing of tax, and not those of the private accountants.

Figure 6a. Cause of Ethical Dilemmas Figure 6b. Cause of Ethical Dilemmas

Others
Others 14%
13% Attachment to
the Company
Fear of Losing Attachment to Fear of Losing 29%
Job the Company Job
25% 50% 14%

Compensation/
Employee and Salary
Employee and Employer 14%
Employer
 Attachment to the Company  Attachment to the Company
Relationship
Relationship
 Compensation/ Salary 29%  Compensation/ Salary
13%
 Employee-employer relationship  Employee-employer relationship
 Fear of Losing Job  Fear of Losing Job
Private Accounting  Others
Public Accounting  Others

Most of the private accountants answered “attachment to the company” as a response to

the reason behind the ethical dilemmas. This is the inherent risk associated being a private
accountant, that he/ she is just an employee under the umbrella of the management. Meanwhile,
almost the same reason underlies those of the public accountants that’s why “attachment to the
company” and “employee-employer relationship” tops the responses. Public accountants, though
considered external to the company, develop special relationship with their clients in the long
run. This attachment and relationship might impair their credibility.
 Private Accounting: If confronted with such ethical dilemmas, most accountants handle such
situations by

1. Encouraging the management to be honest and do an accurate financial statement or

report a truthful financial statement
2. Adjusting with the work while following the instructions of the higher management
3. Providing employee training on assertive communications while depending on the boss-
staff/ employee-employer relationship
Public Accounting: If confronted with such ethical dilemmas, most accountants handle such
situations by

1. Depending on the management’s decision to manipulating the financial statements

2. Complying with the government requirements (code of ethics)
3. Resigning from the current job and finding another employer

Both professions offer almost the same line of response. It is either to adhere with the code or
depend on the management. However, most private accountants give responses which are somehow
misleading and don’t give any concrete answer. In this notion, the threat arises as they cannot directly
answer that they will follow the code. The threat also corresponds to the public accountants as most of
them also answered that they will adhere to the management’s representations.

Private Accounting: If ethical dilemmas really exist, accountants avoid it by

1. Resigning from the company and finding a good company that will not force/push the
accountant to do unethical work
2. Being independent in doing financial reports and setting aside factors that might affect
his/her reports which violates the law

Public Accounting: If ethical dilemmas really exist, accountants avoid it by

1. Resigning
2. Disagreeing with the management
3. Never being unethical towards work as an accountant
4. Projecting and maintaining an air of integrity and independence, in fact and in mind

Both the private and public accountants say that they are still affected by their conscience in
times that their credibility as accountants is challenged. All of the responses direct to only one answer
when summarized, that is to resign from the management to avoid such ethical dlemmas.
CONCLUSION

The purpose of this research is to know the significance of the code of ethics with the
accounting profession. It also seeks to identify different ethical dilemmas that are encountered
both by the private and public accountants and the safeguards that can be used to reduce or
eliminate those dilemmas emanating from this field. Lastly, it also aimed at comparing the
practice of the code of ethics of the private and public accountants.

This research presented the perceptions of the respondents about adherence to the code of
ethics and the ethical dilemmas that goes with the profession. All of the respondents agree to
abide and practice the code of ethics in their profession. Among the ethical dilemmas that they
commonly encounter, majority of them mentioned that they are more vulnerable to inaccurate
financial reporting. When asked about the reason why ethical dilemmas affect the profession,
majority of them answered that it is due to their attachment to the company, followed by the
relationship between them and their employer, regardless whether they are private or public
accountants. The respondents then were divided as to how they handle such situations. More than
half responded positively by adhering to the code while almost half said that they will follow
what the management instructs them to do. To avoid such ethical dilemmas, their common
answer is to resign from the management and to look for another company. Working as a private
accountant in a company really involves the inherent risk that they are most likely to experience
ethical dilemmas because they depend on the management. However, public accountants cannot
escape the inevitable world of ethical dilemmas. This is true since the profession is of trust and
confidence that can be relied by the public. In other words, both professions experience ethical
dilemmas in their workplace. This is despite the fact that they adhere with the code of ethics.
Their competence and credibility towards work now depend on their conscience and own
judgment. The comparison is thus insignificant.

This research can be a helpful tool for organizations in assessing the attitudes and
conduct of their employee. It can also be of help to the researchers who are very much interested
to study ethical dilemmas between the two professions and their adherence with the code. This
study is not only limited to the profession of accounting but can also be utilized in any other
profession, with or without their own code of ethics. The results of this research recommend the
accountants to follow ethical conduct on their workplace not only for the benefit of adhering to
the code but also to gain trust and confidence from the public relying on them. It also
recommends the addition of subjects related to the study of the code of ethics in the curriculum
of BS Accountancy. It is for the reason that most of the respondents say that they are sometimes
unaware that their actions are unethical. It also recommends the Accounting Board to hold
seminars and other related activities in order to develop the awareness of the CPA’s in the
present code of ethics. Lastly, it also recommends an equivalent awareness on the present code
on the part of the firms and the clients. It is for the purpose of avoiding or reducing conflict of
interest between the firms and clients, and the accountants.