the importance and effective of the ethical principles within an organization (business) to curb fraudulent

viii LIST OF TABLES Table 2.1: Outsourcing fraud control Table 4.1: show respondents of each statement Table 4.2: Descriptive statistics for hypothesis 1 economic survey Table 4.3: Chi

THE IMPORTANCE AND EFFECTIVE OF THE ETHICAL PRINCIPLES WITHIN AN ORGANIZATION (BUSINESS) TO CURB FRAUDULENT

BY

NGUYEN THI BINH

Graduation Project Submitted to the Department of Business Studies, HELP University College, in Partial Fulfillment of the Requirements for the Degree of

Bachelor of Business (Accounting) Hons

OCTOBER 2011

NGUYEN THI BINH

17 OCTOBER 2011

iii

ACKNOWLEDGEMENT

To complete this thesis, first at all, I want especially to thank sincerely to my supervisor Dr Pham Duc Hieu, International School, Vietnam National University Hanoi He is the teacher who is not only caring me during my thesis work but also

a mentor to teach me all those years in International School I would like to express

my thanks to Ms Sumathi, Help University College, who initiated and give so much instruction and support about the dissertation

Additionally, I also wish to take this opportunity to thank all others Vietnamese teachers at International School and the Malay teachers at Help University College who taught and helped me during the study process at the International School Now Based on knowledge accumulated over 5 years of study and major in accounting literature time, I have completed the course of this dissertation I cannot express all

my thoughts here I will never forget he teachers and friends who have worked closely with me throughout my five years of study at the University

Finally, I would like to express want to send thanks for my parents who are laid on

my background and create everything for my completeness of course during five years at school

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THE IMPORTANCE AND EFFECTIVE OF THE ETHICAL PRINCIPLES WITHIN AN ORGANIZATION (BUSINESS) TO CURB FRAUDULENT

BY NGUYEN THI BINH

OCTOBER 2011

Supervisor: Dr PHAM DUC HIEU

ABSTRACT

Fraud is the sensitive problem in any organization in business It’s not easy for

us to get information about this problem It’s also link with code of ethic In this thesis, I test with three hypotheses As the results, I examine whether economic conditions influence the propensity to commit accounting fraud I find that the incidence of observed accounting fraud is increasing and is at its highest in the periods leading up to an economic peak One more result, new accountants who have less experience have high accounting transparency than old accountants who have more experience But they also break money culture than who have more experience Because of all the things, so we constantly learn about fraud and errors in accounting and auditing

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LIST OF TABLES

Table 2.1: Outsourcing fraud control

Table 4.1: show respondents of each statement

Table 4.2: Descriptive statistics for hypothesis 1 (economic survey)

Table 4.3: Chi-square test for economic survey

Table 4.4: Descriptive statistics for hypothesis 2 (transparency survey)

Table 4.5: Chi-square test for transparency survey

Table 4.6: Descriptive statistics for hypothesis 3(CEO and money culture survey)

Table 4.7: Chi-square test for CEO and money culture survey

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LIST OF ABBREVIATIONS

APS Australian Public Service

CEO Chief Executive Officer

CFO Chief Financial Officer

GAAS Generally Accepted Auditing Standard

GAAP Generally Accepted Accounting Principles

IFAC International Federation of Accountants

IESBA International Ethics Standards Board for Accountants

ODA Official Development Assistances

PMU Project Management Unit

WTO World Trade Organization

of leadership in the establishment and maintenance of ethical principles in the organization and pinnacles with a set of recommendations that leaders can be assigned to ensure that our moral remains This study examines the growing emphasis that companies place on business ethics, business ethics as well as inform the lives of people in business Current perspective and legal only enhance the importance of moral codes, making them an important part of the landscape of the company The increasing relevance of the cost regardless of business ethics is recorded Emphasis is placed on the importance of stressing business ethics in society, and about teaching the concept to us that they will carry a strong sense of ethics in the business world effect Conversely, any problem in an y field has two aspects, particularly moral in an organization, too There are ethical and unethical behaviors Concretely, in unethical of some Vietnam organizations nowadays, the

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fraudulent is understandable It belongs to each sense or ethic of individual None can sure that they can do all things by right ethics; hence, so many organizations have fraudulent work For instance, according to recent studies indicate an emerging problem in Vietnam is now the fraud in the petroleum business

Fraud in information disclosure on financial statements is one of the current topics in news, especially after a series of events companies in the top world is being bankrupt

in the early 21st century The bankrupt company was said to be fraud on financial statements can tell a lot as: Lucent, Xerox, Rite Aid, Waste Management, Micro Strategy, Raytheon, Sunbeam, Enron, WorldCom, Global Crossing, Adelphia, Qwest Senior managers including chief executive officer (CEO) and chief financial officer (CFO) of these companies were allegedly involved in the processing of data lead to fraudulent financial reporting

1.2 Problem statement

Today, the issue of fraud in business is increasing for instance the case of sale or falsified invoices in the invoice price does not tend to decline This situation is puzzling managers in particular and society in general, there are those who took advantage of the loophole in the law and the management of the company to extract more money from companies and individuals own pocket Arising from the problems mentioned above, the need to research the side of morality and take measures to minimize these problems is essential So, to better understand these issues I would like to present the theme: “The importance and effective of the ethical principles within an organization (business) to curb fraudulent”

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1.3 Research question

This study concern about” the important and effective of ethical principles within an organization to curb fraudulent” Hence there are some involving this theme What is the relationship between ethics and fraud? Why Fraud Is Increasing? How is fraudulent in developed countries and special in Viet Nam? How to Prevent Business Fraud? How is important of ethical principles in curbing fraudulent? Why are ethical principles effective to curb fraudulent? .To answer all these above question, we will discuss gradually widespread all this thesis

1.3.1 Fraudulent in developed countries

In recent years, it has been nearly impossible to open any business newspaper or magazine without seeing headlines relating to various types of corruption One type

of corruption has been especially prevalent - fraudulent financial statements While Europe has experienced several financial statement frauds, including those of Parmalat, Royal Ahold and Vivendi, they have not been nearly as devastating as those in the US Enron, WorldCom, Fannie Mae, Waste Management, Sunbeam, Qwest, Xerox, Adelphia, Tyco; these and many other recent financial statement frauds have shocked the business world In this part, I present the problem of fraud related to the developed countries and it is second typical for the world's financial statement fraud that is WorldCom and Enron

The cost of all frauds - especially financial statement fraud - is extremely high For example, when a company manipulates its financial statements, the market value of that company's stock usually drops considerably, sometimes by as much as 500 times

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the amount of the fraud Six of the top ten bankruptcies in US history occurred in

2002 When a company such as WorldCom declares a $102bn bankruptcy, nearly every person who has a pension or owns mutual fund shares is hurt financially Indeed, the cost of these financial statement frauds was borne by the entire country When a financial statement fraud occurs, the decline in market value and lost revenue for a company can be astronomical

A company's financial position is largely a result of its performance and the level of growth it is trying to achieve Most of the companies that committed financial statement fraud in the past few years had large amounts of debt and leverage This placed tremendous financial pressure on executives, not only to have high earnings (to offset interest costs), but also to report earnings to meet debt and other covenants Enron's derivatives related liabilities increased from $1.8bn to $10.5bn in 2000

In the 1990s and early 2000s, many of the problems at US companies were masked

by the good economy History has now shown that several of the frauds were actually being committed during the boom years, but the economy hid the behavior The boom also caused executives to believe their companies were more successful than they were Sundaramurthy and Lewis (2003) found that extended periods of prosperity can reduce a firm's motivation to comprehend the causes of success, raising the likelihood of faulty attributions Managers can also feel significant pressure when their personal financial status is at risk For example, they may feel their job is in jeopardy if performance falls below a certain level The fear of losing one's job as a result of poor financial performance has contributed to various frauds throughout the past decade

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1.3.2 Fraudulent in Vietnam

In recent years in Vietnam, a series of economic fraud, trade fraud and fraud on the financial statements are brought to light, that cheating occurs in all types of enterprises and in all areas On 25/11/2008, in Hanoi, the State Auditor held a press conference and publicly the results of several audits in 2008 According to the audit results were announced this time for the unit: Electricity of Vietnam, Ta Trach Lake

of project and procurement management and use of property in the original project manager of several ministries and local Through the inspection, the state audit process and the proposal were withdrawn and the State budget is being paid thousands of billion: Electricity of Vietnam: 2,216 billion, Ta Trach Lake of project:

128 billion And according to a result of auditing the State Auditor in a public meeting publicize results of several audits on 02/12/2009 in Hanoi, the general results of the audit report was issued and the released to 30/11/2009, discovered and financial proposals over 6.566 billion Clearly, business fraud involve cheating on the financial statements are no longer problems of an industry - a sector that has invaded the whole economy: from the state corporation, the Investment funds using ODA capital, the company shares listed on the stock market to the private companies

* The type of fraud for each type of enterprise

- Fraud in state enterprises:

+ Fraud in procurement of equipment, declaring costs: One of the typical businesses for this type of fraud is fraud in corporate aviation Vietnam Airlines

+ Fraud in construction

- Cheating in stock listed companies: The Bach Tuyet Cotton Corporation (BBT stock) report loss to profit

- Fraud in the private enterprises, limited liability companies

- Fraud in companies with foreign capital: Although there is not an official report on the fraud in the financial statements of companies with foreign capital, but through interviews and testing auditors showed that two common trends make fraud in these companies In the case of a subsidiary in Vietnam has committed to profitable business plan for the parent company If the company does not achieve the ability to plan, will be fraud and declared lower cost of debt or moving costs - the debt of the period to the next accounting period, or declaration of income Conversely, if the company is focused on reducing the problem of enterprise income tax payable, it shall be taken to the declaration of expenses and liabilities or deliberately prepaid expenses of public debt in the next accounting period are now, recorded lower revenues

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1.4 Thesis structure

My research included five parts and each part is a chapter

Part one is chapter one: Introduction

Part two is chapter two: Literature Review

Part three is chapter three: Research Methodology

Part four is chapter four: Finding and Discussion

Part five is chapter five: Conclusion and Recommendation

1.5 Objective of thesis

 To learn about the factors that constitute accounting fraud

 to learn about the application of ethical principles of accountant or auditor in Vietnam and other developed countries

 To learn about how this theory is applied in practice?

 To help us understand how the importance of effective and ethical principles

in an organization to combat fraud?

 Because accounting plays an important role in the financial statements of the business, so in this essay can help us confirm the value of ethical principles correctly

as to fraud other people In broad terms the fraud is distorting the truth, implement illegal acts to fraud, deception to obtain a certain benefit Three common expressions

of fraud are: appropriation, fraud and theft As I personally know, fraud is the act of intentionally falsifying information economics, finance by one or more persons in the organization or the third party made, which affect the audit object In the field of financial accounting, fraud might merely an intentional act of infringement of property, embezzlement, embezzlement, corruption, collusion but infringe upon the property often associated with distortion of accounting information as the profession records are not true, counterfeit or repair documents, hiding files and documents, covering key information, etc

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2.1.1 Detecting Fraud

Fraud is a broad category, we cannot determine when it occurs, and it is intentional or unintentional? Auditors play an important role in detecting fraud So the ability to judge and main key in detecting potential fraud and auditing standards generally recognized GAAS (Generally Accepted Auditing Standard) gives specific guidance in detecting fraud Specifically:

 The auditor may decide to cheat is separate from the affected area and report

to the board significant business results or not?

 If the effect on the auditor may decide to fraud is separate and can be significant in controlling the business system, item or not?

 If it not major impact on the individual areas, auditor consider this issue related to the management system or not? Auditors must consider whether disclosure fraud is affecting the whole seriousness and integrity required of the administrator or not?

If the auditor's decision errors caused by fraud or substantial and auditors cannot determine the level of fraud affecting the financial statements, I think that auditors may consider the following guidelines:

 Have to collect more evidence

 Consider their impact on other areas of audit

 To discuss this issue, including what is obtained in the investigation of additional management level

 To consider consulting with clients to detect fraud

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 To consider withdrawing from the audit if the audit results indicate that the existence of material misstatement related to fraud and should discuss the reasons to withdraw from the audit client

 Consider consulting advice of legal experts

Experience has shown, the determination of the likelihood of losses due to fraud is an art, not merely a pure science Information gathered from different sources should be checked before coming to conclusions In this regard, organization should first:

- Assess the possibility of fraud in the enterprise based on the internal control environment, the resources to handle fraud, management's efforts to detect fraud and other ethical standards in business industry

- Based on your experience, gather the available evidence of fraud in businesses such

as reports of fraud before, the losses cannot be identified, the problems noted in previous audits, complaints of customers or suppliers

- Collection of information available about the damage and loss due to fraud within the business from the same scale in the industry

- Collect information from surveys of fraud such as fraud investigations of the global Ernst & Young on bribery and corruption in business, this is the source document provides valuable information relevant to this subject in Vietnam

2.1.2 Why does the definition matters

The consistent application of this definition of the national government provides the fundamental framework for verifying, put in writing and control fraud

It reinforces the assessment of risk and fraud control plans, and ensures that APS employees understand the causes leading to fraud Defining the problem of fraud to

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help the government measure accurately and allocate resources to match, as well as APS to handle fraud cases fairly

2.1.3 Small, medium and large enterprises

The size of each different business accompanied by the appearance of various types of fraud is different So they will be faced with different problems of fraud The provisions made by law, apply to businesses are the same and consistent Because the intangible value of each different businesses that it is important that each business be aware of legal issues which made them to be able to control fraud easier For small and medium enterprises need the support from big business than it and the support from the consultant’s economic law to create system of strict control fraud for the purpose of achieving economic efficiency as set out

For large businesses need be uniformity in the organization of personnel, decentralized management, allocated resource makes the corporate structure more complete for the purpose of preventing and limiting fraud by improving aware of the importance of controlling fraud

2.1.4 Internal and external fraud

There are several common methods to control fraud, regardless type of organization, whether it's fraudulent internal or external Internal fraud is carried out

by an employee of the agency they work for External fraud is implemented by someone from outside agencies Fraud can be committed to cooperation between body worker and someone from outside agencies For example, support staff can take

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the form of creating or accepting a false identity, providing illegal payments or benefits provided, or confirmation that the goods or services have been assigned when they are not Fraud section should be treated and reported as two-a fraud internally and externally Customers, contractors, consultants and non-governmental organizations could cheat with the Commonwealth organization, as part of risk assessment, fraud checking capabilities outside of the various stakeholders and make appropriate arrangements, reports and contracts to stop fraud, and for deal with it effectively if it occurs Solution of internal fraud and external arrangements may require different ways or approaches For example, different arrangements may be necessary to enable employees to report alleged cases of possible fraud in their agencies with requests for customers to report fraud Some actions of employees can

be the violations of the Code of Conduct rather than fraud and should be dealt with accordingly Moreover, some problems may be cheating will be treated as violations

of the code (for example, access to information) Dealing with violations of the laws

of behavior in time can prevent inappropriate behavior from escalating into criminal activity Dealing with internal fraud can help reduce fraud by reducing the external opportunities for workers to support the stakeholders to implement fraud

2.1.5 Outsourcing fraud control

Some agencies, in particular smaller agencies, may need to outsource their fraud control arrangements

If an agency outsources its fraud control arrangements, it must ensure that:

- the tasks/requirements are clearly spelt out in the contract;

- fraud control plans are based on current risk assessments;

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- fraud control plans cover all aspects of the agency, such as its programs;

- the plan is not generic in nature; and

- An in-house contact point is provided for reporting and recording allegations

of fraud and a manager is appointed to be responsible for fraud control overall While all or part of fraud control arrangements can be outsourced, agencies remain accountable for meeting their obligations under legislation and the Guidelines

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Figure 2.1 sets out the arrangements for an Australian Government agency that has outsourced most of its fraud control arrangements

Figure 2.1: Outsourcing fraud control

The National Library of Australia has refined its fraud control requirements to better reflect its actual needs One agency employee is designated as the main contact point for the contractor and manages the contract, consulting if necessary with in-house contract management expertise The contact point is responsible for fraud control activity in the agency, has a detailed understanding of the operations and is also Secretary to the Audit Committee That person closely monitors performance of the contractor against contract requirements

The National Library of Australia has contracted a single provider Fraud control outputs covered by the contract include: the development of a fraud control management policy; a fraud risk assessment and accompanying fraud control plan; fraud investigative guidelines (using recently issued Australian Government Investigation Standards, but tailored to the agency’s particular needs); and development and delivery of employee training Other specifications in the contract also address the following issues:

 the quality and style of presentation of work;

 the level of contractor security clearances;

 the experience and level of qualifications of the individual personnel conducting the consultancy (for example, that employee training is delivered

by personnel experienced in delivering training to adults and in investigating fraud);

 the scope of work; and

 A range of fee options, which provide both client and contractor with flexibility about the way services, may be delivered

To provide protection for both parties, a scoping document is signed off by the contractor and the contact point for each significant piece of work

(Source: Information provided by the National Library of Australia)

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2.2 Code of Ethics

2.2.1 Definition of business ethic and factors affecting business ethics

Ethical values are the foundations on which a civilized society is based on Without them, the civilization collapses In business, the purpose of ethics is to direct business men and women to abide by a code of conduct that facilitates public confidence in their product and services In the accounting field, professional accounting organizations recognize the accounting profession’s responsibility to provide ethical guidelines to its members Ethics must and should be taught People are not born with the desire to be ethical or be concerned with the welfare of others And contrary to all beliefs, one person can make a difference

Accounting ethics is both a normative and descriptive discipline Interest in business ethics and accounting ethics accelerated dramatically during the 1980s and 1990s, both within major corporations and within academia When we talk about accounting ethics, we always link the term with creative accounting, earnings management, misleading financial statements, securities fraud, insiders’ transactions, bribery, executive compensation and many more If you occupy a position of leadership, then your actions will profoundly influence those who follow your example And the well-known cases of fraud, WorldCom and Enron included, prove just that Elements affecting business ethics are personal code of behavior, ethical standards for managers, company policy and ethical suit with the country

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2.2.2 Code of ethics

Each day we are challenged to be fair and consistent, to be compliant with the laws that govern our activities, and to notify others when something needs to be corrected Our Business Code of Conduct and Ethics provides you with guidance in making the right choices when called upon to do so Please become familiar with this Policy, as well as all of our Corporate Compliance Policies and Standard Operating Procedures As you review these materials, please keep in mind that it is not simply the letter of the policy, but the spirit of our Policies that we all must embrace

Professional accountants have an important role in society Investors, creditors, employers and other sections of the business community, as well as the government and the public at large rely on professional accountants for sound financial accounting and reporting, effective financial management and competent advice on a variety of business and taxation matters The attitude and behavior of professional accountants in providing such services have an impact on the economic well-being of their community and country International Standards Accounting Board of Ethics (IESBA) issued Code of ethics for Professional Accountants It’s an independent board in standard-setting of IFAC Code set the ethical requirements for professional accountants and provides a conceptual framework for all professional accountants to ensure compliance with the fundamental principles of professional ethics and more principle which I consider that it’s also important is technical Standards These principles included integrity, objectivity, professional competence and due care, confidentiality, and professional behavior, technical Standards

+) Objectivity: A professional accountant should be fair and should not allow prejudice or bias, conflict of interest or influence of others to override objectivity

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+) Professional Competence and Due Care: A professional accountant should perform professional services with due care, competence and diligence and has a continuing duty to maintain professional knowledge and skill at a level required to ensure that a client or employer receives the advantage of competent professional service based on up-to-date developments in practice, legislation and techniques +) Integrity: A professional accountant should be straightforward and honest in performing professional services

+) Confidentiality: A professional accountant should respect the confidentiality of information acquired during the course of performing professional services and should not use or disclose any such information without proper and specific authority or unless there is a legal or professional right or duty to disclose

+) Professional Behaviour: A professional accountant should act in a manner consistent with the good reputation of the profession and refrain from any conduct which might bring discredit to the profession The obligation to refrain from any conduct which might bring discredit to the profession requires IFAC member bodies

to consider, when developing ethical requirements, the responsibilities of a professional accountant to clients, third parties, other members of the accountancy profession, staff, employers and the general public

+) Technical Standards: A professional accountant should carry out professional services in accordance with the relevant technical and professional standards Professional accountants have a duty to carry out with care and skill, the instructions

of the client or employer in-so-far as they are compatible with the requirements of integrity, objectivity and in the case of professional accountants in public practice, independence In addition they should confirm with the technical and professional standards promulgated by:

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 IFAC (e.g International Standards on Auditing);

 International Accounting Standards Board;

 The Member’s professional body or other regulatory body; and

 Relevant legislation

Under the framework, all professional accountants are required to identify threats to these fundamental principles and, if there are threats, apply safeguards to ensure that the principles are not compromised This Code provides a framework to assist a professional accountant to identify, evaluate and respond to threats to compliance with the fundamental principles If identified threats are other than clearly insignificant, a professional accountant should, where appropriate, apply safeguards to eliminate the threats or reduce them to an acceptable level, such that compliance with the fundamental principles is not compromised

2.3 Related Theory

2.3.1 Control fraud theory

Control fraud occurs when a trusted person in a position of high responsibility in the company, corporation or state use their powers to destroy the company and engaged in widespread fraud for personal interest The concept of fraud control is based on the observation that the CEO of a company is uniquely placed to remove the check and balance on fraud in the company by hiring selectively, and by which position it can engage in accounting fraud frequently, and thus rob shareholders and creditors The company will regularly publish accounts huge profits, while in reality

it is the inability to pay This will cause the stock to rise, and those who make

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fraudulent cash control on their stock1 In addition, companies can lobby for changes

in the regulation of legislation to weaken the rules, and this can extend the fraud

"Control fraud" theory explains why these form of fraud most damaging situations in which those who control the companies or countries that use it as a means of fraud Executive Director, or Head of State, set out the biggest fraud risk Control only major fraud can cause huge financial losses than all other forms of property crime combined - they are "super predators" of the financial world Fraud control can also occur in waves that can cause damage to the economic system and to discredit other institutions necessary for the government and society Control frauds are usually able

to defeat the market mechanism for several years that the neo-classical economists predict will prevent such fraud

2.3.2 Ethical theory

Ethical theory based on moral principles previously explained They emphasize different aspects of dilemma situation ethics, leads to the most accurate resolution morally guided in moral theory itself People based on personal choice of moral theory according to the experiences of their lives

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company decided to move their production facilities from one country to another How much good is being moved? How much harm? If they do have value over the damage, the decision to move can be regarded as a virtue, with the yardstick handy This method also includes what is called cost - benefits In particular, costs and benefits of a decision, policy, or an action to be compared Sometimes they can be measured in terms of economic, social, human, or even term of emotion When all the costs are increasing and comparison with the results, if the benefits outweigh the costs, that action can be considered ethical Another criticism brought fairness of this approach is that it is difficult to accurately measure the costs and benefits The other criticism is of the minority rights can be ignored The benefits that selfishness is as advocates assessment of the consequences of action, but unlike the selfish, self-interest focused on determining the course of action will produce the best for the greatest number of people Therefore, it is the end determines the morality of an action and no action (or intention of taking actions) The benefit is probably the dominant moral philosophy in business ethics The benefits are attractive to many entrepreneurs, since philosophy recognizes that actions result many good consequences for some people, but bad consequences for others This is certainly true of many business decisions

In my opinion, I use utilitarian theory for this thesis because utilitarian is basic ethic which give the right action to assess the potential risk of frau And then we can prevent this problem as soon as possible

There is a view that the transparency of the business is something which is very valuable asset for the enterprises themselves Once the enterprise has created trust with investors, business partners …will create good conditions for raising capital, seeking business partners, bank loans more favorable; on the other hand it also enhanced its brand business in the market Banks - as a business - you have created the trust with customers, it also will have opportunities to mobilize a large number of deposits, expansion of capital in both domestic and foreign market

No transparency - it hardly created trust with business partners With no transparency- shareholders and investors will not trust in bank and business in managing their capital banks will be difficult decisions for business loan - and by contrast, bank has also difficult in raising loans by itself

Sum up, the transparency of the business is an important basis for sustainable development; increase the value of the business in general To develop strong and sustainable, businesses as well as banks are required to enhance transparency

Accounting systems - audit is an indispensable tool to accomplish transparency in company management Auditing companies help to audit the corporate governance system transparent - not only within the accounting and

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financial management Through the audit process to make recommendations on corporate governance, risk management, improve internal control systems…help enterprises make timely adjustments to survive, improve management systems - aims

to increase transparency International Accounting Standards has launched the concepts, requirements, conditions and general opinions about the transparency of financial reporting The countries have a good understanding to set the transparency

of financial reporting will be the loss of the benefit and what cost Transparency of financial reporting is no longer a controversial issue is do or not do, but it was the responsibility of the management agency as well as individual companies and enterprises

In the international accounting and transparency of financial statements easily achieved because: To ensure the stability of financial markets and capital markets, regulatory agencies have raised the issues of particular concern to the quality of information provided to subjects participating in the market

 Organized themselves to provide information that is also the responsibility of proving themselves in the improvement of internal information systems, to make their reputation in providing quality information

 Their law intervenes into financial markets deeply and strong institutions to celebrate the acts of infringement

 The level of public understanding of good economics and business, accountant has set very high requirements for quality of provided information

 To prevent fraud in financial reporting and then by it affect to accounting ethics

"Accounting work of small businesses often rely on cash basis and it so very hard to cheat," according Taparia told a luncheon meeting in Kuala Lumpur on the theme

"The detection of the operating fraud in financial reporting " He said that reports business results tend to be susceptible to fraud, because there are many ways to

"store" items in this report

Under GAAP, revenue may be recognized in three cases: (i) obtaining cash on, (ii) when signed but not yet collected the money on, (iii) and the more likely contract will be signed For example, sales are usually made up by measures within "channel stuffing", in which the company leave the goods at the customer's warehouse and book sales, although not received in cash, he added "Frankly, with role as an investor and money manager, I no longer use the report business results, and I do not care to EPS or PE," he added Taparia said he likes to use the statements of cash flows because the method is relatively consistent between tests by the company's books eventually be converted into cash "The key problem - if you see revenue and net profit up, but cash flow from operations declined, beware Money was never known to lie," he said He said that investors want a management team has ethics and

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passion, whose main objective is to maximize their cash flow and from which investors also get the same value to

2.5 Relationship between fraudulent and ethic

+) Fraud is a clear example of an ethical lapse, but not all ethical lapses are fraud +) a strong ethics program will help prevent and detect fraud

+) Fraud is illegal

+) Ethics is more than compliance

+) Ethics is doing the right thing, not just what is legal

For example, we have all heard of cases where companies backdated the stock options for executives This is not necessary illegal

2.6 Hypothesis statement

This project will be investigated on a sample of Vietnam accounting for accountings

of characteristics, which determine ethical behavior, are applied and implemented by accountants Based on understanding current economic situation, I decide will test the hypothesis concerning economic situation, CEO corresponding, money culture and some accountant behavior