Final answer:
Public accounting establishes ethical standards to enhance the credibility and trust in financial reporting, promote transparency, and ensure accountability in the financial system.
Step-by-step explanation:
Public accounting, as a profession, promulgates ethical standards and establishes means for ensuring their observance primarily to enhance the credibility and trust in financial reporting. Ethical standards are important in public accounting because they provide a set of principles that guide the behavior of professionals, ensuring that they act with integrity, objectivity, and in accordance with the law. The adoption of ethical standards is aimed at protecting the public interest by ensuring that financial information presented by businesses is reliable and that professional accountants remain impartial and independent in their activities.
A code of ethics in the business not only addresses specific unlawful practices such as bribery and discrimination but also promotes broader societal values like environmental responsibility and social goals. Furthermore, regulations like the Lobbying Disclosure Act encourage transparency and ethical conduct by promoting the public's right to know about lobbying activities and contributions. Similarly, the profession's commitment to ethical behavior supports measures that aim to improve accountability and prevent abusive practices, contributing to the overall financial stability and trust in the economic system.