Violations of accounting ethics often violate applicable laws and regulations. Another example is the case of AIG, which was investigated by the SEC for conducting reinsurance transactions that defrauded investors. As a result, AIG lost many customers and struggled to recover its position in the industry.
When a violation of accounting ethics is found, then the company and the individuals involved can face serious legal consequences. Fines from the SEC, financial losses, and even corporate bankruptcy are some examples of the consequences that can occur. Enron executives, such as Kenneth Lay and Jeffrey Skilling, were sentenced to prison on charges of fraud, insider trading, and other financial crimes.
 3. Impact on Stakeholde
Violations of accounting ethics not only have an impact on the company that violates it, but also on various stakeholders. Investors who lose confidence in financial statements will suffer financial losses. Workers who lose their jobs due to company bankruptcy will also experience significant impacts. In fact, a company's reputation can be permanently damaged, making it difficult to restore public trust.
4. Financial Losses
  Violations of accounting ethics often lead to significant financial losses for the company. For example, manipulation of financial statements can cause investors and creditors to lose trust, which in turn can result in a decrease in stock prices and an increase in capital costs.
5. Decline in Public Trust
  Public trust in companies and the accounting profession can be damaged by ethical violations. When cases of ethical violations are revealed, people tend to lose confidence in the financial statements presented by the company. This can have a long-term impact on the company's reputation and the accounting profession.
6. Legal and Regulatory Sanctions
  Violations of accounting ethics can result in severe legal and regulatory sanctions. Companies and individuals involved in such violations may be subject to fines, revocation of licenses, or even imprisonment. These sanctions are not only financially detrimental but also reputational.
7. Impact on Employees and Long-Term on the Company
