ASSESSING THE EXTEND TO WHICH DILEMMA OF ACCOUNTING ETHICS AFFECTS BUSINESS PERFORMANCE OF MFIS

CHAPTER ONE
INTRODUCTION

BACKGROUND TO THE STUDY
According to a lay man accounting is focused on recording which is far from what accounting is all about today. This definition has changed over time.
The AICPA defined accounting as “the art of recording classifying and summarizing in a significant manner and in terms of money transactions and events which are in part at least of financial character and interpreting the results thereof”.
The APB OF AICPA defined accounting as “is a service accountability with functions to provide quantitative information primarily financial in nature about economic entities that are intended to be useful in making economic decisions and reassured choices among alternative courses of actions”.
Ethical standards are a set of rules or moral principles or values. These set of values differ with individuals and also with various groups or profession.
Dilemma is a situation faced by an individual in which a decision must be made. Accountants face dilemma in their careers. For an auditor, if he has to deal with a client who threatens to see another auditor unless an unqualified opinion is given, this presents a serious ethical dilemma if an unqualified opinion is inappropriate.
Some examples of ethical dilemma include,
• Taking credit for others’ work
• Offering a client a worse product for your own profit
• Utilizing inside knowledge for your own profit.
There are three ways of resolving dilemmas which can be seen below
• Everybody deos it: with this notion, people falsefy tax returns and cheat on exams because everyone ealse is doing it.
• It is legal it is ethical: this relies heavily on the perfection of laws. With this an individual will own a lost item unless the owner proves it belongs to him or her.
• Likelihood of discovery and consequencies: here, an individual will accesses the punishment (penalty) of his or her behavior if discovered.
Accounting is a profession that totally depends on the professionals judgement and their principal which includes objectivity, professional behavior and due care (park and Blenkinsopp, 2013). To perform their different function recording all business events with financial character classifying and summarizing recording and presenting them in the form of profit and loss statement income statement
Balance sheet cashflow statement helps business to track their financial events (Holmes, Marriott and Randal, 2012). All these process is very important to perform and it all requires ethical standards to be maintained. Hence accountants are considered as the front runner in business while it comes to providing qualify financial report and provide the interest groups with reliable financial information(Ismail, 2014).
However, a lot of events have happen that has impelled the trust the public had for accounting had for accounting profession hence posing questions about the intergrity of the profession. For example accounting professionals were involved in breaching accounting principles and standards (Auther Anderson the fall of Enron) manipulating financial information failed to display professionalism independence and due care. As a result of such circumstances it is challenging to restore public trust and to ensure that ethical standards are exercised by accountants as they carryout their roles and avoid actions considered as unethical.
The purpose of this research is to find out the dilemmas faced by accounting professions in the Buea municipality and how it affects the business performance of MICROFINANCE INSTITUTIONS in the Buea municipality. This report will start by outlining the problem statement, research questions, objective, hypotheses, scope of the study, significance of the study and the organisation of the study. Following that we will chronologically present a literature review to support the research purpose and describe the methodology that have been carried out. Finally the research findings and results will be discussed and recommendations will be provided to further study.

1.2 STATEMENT OF THE PROBLEM