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Professional accounting bodies have always stressed on the importance of the ethical conduct of their members. They keep providing new and improved ethical guidance to their members. ICAEW for example had recently introduced new code of ethics that was approved in May 2006 and in effective from 1 September 2006. The new code of ethics covers five fundamentals principles which are integrity, objectivity, professional competence and due care, confidentiality and professional behaviour. These code of ethics are certainly essential for the accountants to follow in order to prevent the accounting frauds that can lead to the cooperate scandals as what happened to the companies like Enron and WorldCom. The investors on the other hand need to always check on accountants' ethical behaviour in order not to let the accounting scandals from happening and then loosing their investments. Regrettably though, to what extent do the investors can rely on ethical behaviour by the accountants as enough to prevent this sort of accounting and corporate scandal?

Enron is known as one of the world's leading electricity, natural gas, pulp and paper, and communications companies that had earned an amount of $111 billions revenue in 2000. Besides employing around 21000 people, Enron was also named as "America's Most Innovative Company" for six consecutive years. However, the company had made itself more popular for being a symbol of corporate fraud. The company had maintained its financial condition through a systematic and creatively planned accounting fraud. Enron through its corporate officers had created illusions of billions profits whereas the company is actually loosing money. The company had overstated its earning by $586 since 1997. So, for four years it had hid its true indebtedness. The investors certainly know nothing about this. However, where is the role of auditors that audited this company? Arthur Andersen, once a famous auditing firm had shredded the documents related to its audits of Enron. Why didn't they realise about the fraud? Are they so careless to miss such big accounting fraud? The answer is simple; they don't practice their code of ethics. The scandal of Enron had affected Arthur Andersen badly and leads them to dissolution. The firm which was once a "big five" has only 200 employees now as compared to 28000 of employees in US before the incident since most of their clients lost confidence on them. Another good example of accounting scandals is the WorldCom

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