Accountiong Ethics
Accounting Ethics When examining the effect of open marketing on the profession of accounting it is important to view it from three perspectives: the client's, the profession's, and society's. Additionally, two key areas that are affected by marketing must be addressed, these are concerning competition, and ethical implications. Marketing in public accounting is here to stay therefore making an argument against its existence would be fruitless; however, in order to achieve maximum benefit to the firm, the client, and society more stringent guidelines must be implemented at the firm level. The first, and most obvious, of the effected areas is competition. Within competition several points are discussed. First, the implications advertising has on public accounting-- the model of perfect competition versus the model of monopolistic competition. Secondly, the relationship between firm size and advertising expenditures.
A study made of CPA firms in Britain in 1985 asserted "the most dramatic contrast between advertisers and non-advertisers was their size. The result is firms must always actively seek new clients. As a result these firms will grow while small firms struggle. For example, the CPA firm of XYZ has an established clientele base and uses referrals as its sole means of growth. The major drawback is small firms are offered little room for growth because of the expense involved. In the March 1990 issue of the CPA Journal Arvid Mostad, CPA published an article in which he set up "Seven Marketing Guidelines. Therefore the client base of XYZ is not stable as in the previous example and measures must be taken to keep prices competitive with other firms regardless of cost inferences. Competition has resulted in some firms damaging the integrity of the profession. The elements of monopolistic competition are as follows: product differentiation, the presence of large numbers of sellers, and nonprice competition. In a perfectly competitive market the price of a particular service is established solely by the interaction of market demand and supply. ffect of advertising on firm specialization, the implications of client turnover on public accounting practice. This damage has occurred mainly through pricing practices. In his commentary Mario Formichella states the following: It is no longer unusual to find firms willing to take on work at substantial discounts from standard fee levels. This uncertainty exists with any firms who specialize.
Common topics in this essay:
Accounting Ethics,
Marketing Guidelines,
Mario Formichella,
public accounting,
client base,
Mostad CPA,
providing service,
monopolistic competition,
model perfect competition,
perfect competition,
client turnover,
integrity profession,
bottom line,
advertising public,
audit services,
model monopolistic competition,
cost providing service,
relationship firm size,
size advertising expenditures,
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Acceptance Essays
