Accounting is a profession that should be treated discreetly and with a high level of integrity. The accounting profession is an embodied body of auditing, financial analysis, financial reporting, cost accounting, and quantitive techniques among others. All these aspects of the accounting profession should be carried out according to set laws and regulations. When the general accepted accounting principles (GAAP) are not applied in executing the accounting profession, fraud, omission and commission mistakes, in appropriate information will be detected.

According to a forum carried out between International Organization for Standardization and International Accreditation in 2006, the ISO 9001 Auditing Practices Group Guidance on, Auditor Code of Conduct and ethics insisted that for any corporation to receive and credentials or ISO, certification, it was mandatory for it to abide by auditors code of conduct and ethics. Auditors and accountants in general are supposed to act with the interest of the organization and its clientele to prevent any form of fraud or deceit from taking place. “It is important that the auditor keep a close eye on the information provided by the auditee in the quality manual or documentation where the auditee has defined the interaction of processes” (ISO 9001). All the information relayed should be investigated thoroughly before presenting it as true according to the subject of analysis. The general terms in the code of auditors code of conduct are stated under the general statement, code of ethics which comprises of general issues, an auditors relationship to the general public, relationship to peer, organization, clients, and the auditor’s employer and so on (ISO, 2009)

There have been several occasions that accountants and auditors have disobeyed the code of conduct and ethics, or neglected small issues that later resulted in huge financial scandals. A given number of accountants can carry out accounting mistakes without their knowledge whereas others are usually out to defraud the clients of money. A prime example of financial fraud due to an accountant negligence occurred recently in the Bernard Madoff Auditing Firm.

A Ponzi scheme is one that defrauds the members or investors by paying off their dues through money derived from other sources or from separate members from the same investment scheme. Businesses that operate such schemes usually pay off their dents on time and consistently so that it can attract more customers and keeps the business going. The company vigorously sells off its services through classified advertisements to attract large numbers of investors to its business. Ponzi schemes are destined to collapse after a calculated period of time because there are no forms of investment that are undertaken to maintain the working capital of the company. In most cases they are usually indicated by authorities, but after they have fraudulently collected money from their perceived investors of a considerable number of people. They usually have dependent or non existence auditors whose investigation favor the company and cannot be relied upon by the public or investors.

There are several instances where the Securities and Exchange Commission (SEC) alongside the Federal Government has failed to prevent such huge scandals from taking place. These accounting regulating bodies are good for carrying out prosecution after a substantial amount of money has been stolen from innocent and hard working citizens. Unfortunately some auditing firms do not abide by the auditing code of conduct and professional ethics partnered with fraudulent individuals to fraud investors of their money through the use of false represents information to the authorities and the public.