Legality & Ethicality of Financial Accounting

With different industry definitions and viewpoints, fraud can be a tough issue for audit committee members to grasp for oversight purposes. The legal obligations of audit committee members have intensified because their standard duty of care and loyalty to the entity has increased in light of management fraud activities.

Ethics are crucial to the accounting profession and the business world, so choosing an ethics system to base your moral decisions on is extremely important. Accountants and all business professionals will be confronted with moral dilemmas on a daily basis. Being strong in your faith and knowing what you believe in will help you to always make the right decision. Based on this reasoning, this essay will explain why deontology is the best ethics system for the accounting profession.

In week3, we are looking into the case of Excello Telecommunications, and study their behavior base on the knowledge of legality and ethicality in financial reporting.

1) The discipline dealing with what is good and bad and with moral duty and obligation

Based on the fact that the CFO and company has lied before about a very serious matter, as auditors, we would have to exercise a high level of professional skepticism going forward due to the increase in both inherent and control risk. We have to be sensitive to all information regarding the company, especially when the information is tied to the company’s management. Our responsibility for this situation all depends on the extent of the impact of the CFO’s illegal act

Mr. Eatough’s report referred to the profit managing activity as a “deliberate deferral of reported income” when he should have called it fraud. Standard 2410 requires that results are communicated in such a way as to minimize the risk of misinterpretation. Since Mr. Eatough did not call the “profit management” fraud, he left the report open to misinterpretation.

Improving the independence of auditors might be another effective way to exert control over accounting fraud. This may be achieved through both ethics education for university students and continued ethical training for auditors. Bean and Bernard (2009) point out

Ethics in any industry is important, but for Accounting professionals and those in need of their services, it is a particularly stressed element. Information provided by accountants is used to make major decisions, including investing, downsizing, expanding, etc, so accountants are expected to be competent, reliable, and have a high degree of professional integrity. Because of these high expectations, the professional accountancy industry, like many other professions, has adopted professional codes of ethics (Woelfel, 1986). These ethical codes go above and beyond the requirements for state or federal laws and regulations. There are several professional organizations within the

One of the primary struggles in relation to ethics in the business realm (and in any realm of life for that matter) is the art of determining the morality of specific day-to-day issues— especially the gray areas within business finance. Some financial issues, however, are not so gray or they become more black or white to one person after he or she ponders the matter deeply, obtains wise counsel, learns from experience, etc. When finally convinced that an issue is either right or wrong, enforcing an opinion within a corporation can turn out to be an even more difficult hurdle to overcome. This hurdle is the premise of Kirk Hanson and Dave Price’s conversation in the 7:19 long video by Markkula Center for Applied Ethics at Santa Clara University entitled “Fraud in Financial Reporting - Causes and Solutions.”

Finally, conflicts of interest were overlooked or unaddressed such as when the CEO and CFO kept pressuring the controller to accept stock options as part of her pay. These pressures eventually led this company to cross the line from earnings management, which is legally manipulating earnings within GAAP to smooth out income, to attempted fraud, which us intentionally misleading users of the financial statements through false representations of a company’s financial standing.

New advancement in technology has made it easy for many CEOs to have the opportunity to loot their companies, and to engage in accounting irregularities. Technology has made improvements to the way a company does business with others, and also it has opened up ethical concerns for the way a company conducts their business. “Recently, accounting professionals have been placed under immense pressure by changes in the size and scope of financial markets” (Love, 2007 para. 1). Companies use the financial reporting system to communicate the financial effects of the company to outsiders (Love, 2007). This paper will discuss the legal, ethical, and technological concerns of the accounting, and financial reporting of businesses.

Accounting Information Systems ACCOUNTING SYSTEMS, INTERNAL CONTROLS, AND ETHICS Prepared for the course team by Vimlesh B. Narayan Unit 1 Contents Unit 1 Contents 2 Concept Map 3 Learning Outcomes 4 1.1 Introduction 5 1.2 Accounting System Design 6 System Objectives and Design Factors 6 Designing the System 8 1.3 Internal Control Systems 17 Objectives of Internal Control Systems 17 Structure of Internal Control Systems 18 Why You Should Consider the Components? 21 Internal Control Principles and Limitations 25 1.4 Control over Revenue and Receipts 31 Internal Control Objectives and Strategies 32 Combined Document Flows and Related Activities 35 1.5 Control over Purchases, Inventories,

If you were traveling on matter to Mexico City for the first tense, you 'd be wise to research the local fluency, laws and business etiquette. Similarly, if your audience client operates a greater subsidiary in Mexico and your audit report will be relied upon by users of the principal 's bursal statements in Mexico, you need a working notice of international professional standards. You should know approximately the accounting, auditing, ethics and temper control standards that affect the engagement and your accounting practice.

this dissertation had to be altered. Nevertheless the term will come up and play a role in this dissertation and it is therefore important to develop a basic understanding of what is implied by it. Morrison and Svennevig (2002) agree that it is a broad concept that everybody is somewhat familiar with but that still lacks some precise definition. Nonetheless public interest can generally be described as involving matters that are likely to affect a great number of people and that in turn people might want to know about. A more precise definition can actually be found in the statement of the International Federation of Accountants (2012: 2) who specify publics as “the widest possible scope of society“ which include „individuals and groups

I am very fortunate to have been able to interview three business owners that I come in contact with almost daily from working at a golf course. I asked them all a wide variety of questions both through interviews as well as surveys (see appendices.) I asked them numerous questions both relating to accounting as well as ethics in the business world. They all game me a large range of answers to the majority of the questions that I asked them, however they all had two things that were common answers. First off they all have very favorable views of accountants. If a problem were to ever occur with regards to their financial statements because of their ethical standards they know it would be an honest mistake. They