Accounting Ethics More Important Than Ever During COVID-19

COVID-19 has wreaked havoc on the United States. Hundreds of thousands of people are getting sick and dying from the deadly virus. States have forced residents to quarantine, shutting down businesses and laying off millions of Americans.

In April, there was some relief for struggling businesses. Small businesses who struggled to pay employees and necessary expenses could apply for the Paycheck Protection Program. Many businesses successfully applied and received millions of dollars in funds from this program.

The guidelines were fairly loose: companies had to have fewer than 500 employees and must be able to prove that they suffered significant financial impact because of the coronavirus shutdowns. This led to businesses of all sizes to take advantage of this free money. This means that large, financially secure businesses even got huge amounts of money. Some of these include well-known hotels, medical device companies, technology companies, restaurants and even the NBA franchise the Los Angeles Lakers.

The good news is that many companies returned the money they received out of good faith and possible public backlash. Treasury Secretary Steven Mnuchin warned business of the possible consequences. He stated that companies who received loans exceeding $2 million would be audited. There could be criminal liability involved. So this begs the question: How were financially stable businesses able to receive money earmarked for smaller, struggling businesses barely able to stay afloat?

Easy: Poor accounting. With individuals and businesses alike struggling to make ends meet during the COVID-19 pandemic, people are looking for ways to earn extra funds. It’s very tempting when a once-successful business is losing money and doesn’t want to shut down. It’s easy for CPAs to fudge numbers on spreadsheets and financial statements.

However, there are some things to consider. Professional accountants have a challenging task in front of them. They must especially remain focused on their ethical responsibilities. Being unethical during this time won’t be helpful in the long run. Only truthful financial reporting can help us manage the outcome of the COVID-19 pandemic. If financial professionals underreport finances, we’ll never be out of this situation and that will impact all Americans.

The coronavirus crisis has been a huge test for all Americans, especially those who work as CPAs. CPAs should review their Code of Ethics during this time to ensure they are following their moral and legal obligations.

Keep Your License With Help From a Tampa Certified Public Accountant Licensing Lawyer

CPAs and similar positions work with money, where ethics is of high priority. Lying or being dishonest with numbers in order to obtain benefits or pay less in taxes is unethical and immoral. Engaging in this behavior can result in license loss and other penalties.

If you have made mistakes with your accounting processes, though, now is the time to fix them. Get back on track with help from Tampa certified public accountant licensing lawyer David P. Rankin. I have represented more than 100 professional engineers before the Florida Board of Professional Engineers. I can help you well. Call (813) 968-6633 or fill out the online form to schedule a consultation.

Resources:

nbcnews.com/business/business-news/which-companies-are-returning-their-ppp-loan-here-s-list-n1194566

ethicsboard.org/focus-areas/covid-19-ethics-independence-considerations

https://www.davidrankinlaw.com/cpas-license-suspended-for-unlawful-use/