Ethics of Financial Statements and Codes

The audit committee’s role in financial reporting is to ensure that accurate and transparent disclosure is being presented to the public, investors, and shareholders. The role of top management in financial reporting is to make sure that the financial statements and disclosures are in accordance to GAAP, and that everything disclosed is truthful, while not hurting the business. The

A simple definition of financial ethical standards is the accuracy of books and records, disclosures of reports and filings, and safeguarding personal and confidential information in compliance with regulations and laws. In

Auditors have the responsibilities as well as management to report internal controls. The auditors must examine closely management’s claim of effectiveness and also physically test the controls. After the examination, the auditors should express their opinion and any recommendations to fix any internal control weaknesses.

Excello Telecommunications was presented with a dilemma on how the company should report earnings so that they would appear to have met earning estimates for the 2010 financial year. The CFO, Terry Reed, was concerned with how failure to meet earning estimates would affect bonuses, stock options, and the share price of Excello stock. On December 201, 2010, the company sold $1.2 million of equipment to Data Equipment Systems. However, Data Equipment Systems requested that Excello hold on to the product until January 11, 2011, because they do not have the

The observational study shows that there are some factors that lead to ethical misconduct within the company. First, working in financial services company tends to be challenging for the employees. This makes the employees feel like being in a competitive environments that make them struggling to be more successful and do anything to be the best. Consequently, people are more likely forget about ethical behavior and undervalue code of conduct. However, business knows the importance of integrity and how it makes difference in

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

Businesses, investors, creditors rely on accounting ethics. The accounting profession requires honesty, consistency with industry standards, and compliance with laws and regulations. The ethics increase the responsibility and integrity of accounting professionals, and public trust. The ethical requirements influence the management behavior and decision-making. The financial scandal of Enron and Arthur Anderson demonstrates the failure of fundamental ethical framework, such as off-balance sheet transactions, misrepresentation of financial statements, inaccurate disclosure, manipulations with earnings, etc. The confronted accounting profession and concern for ethics in businesses forced regulators to revise the conceptual framework of accounting processes.

B) I think the auditors should have equal responsibility for detecting material misstatements due to error and fraud. It’s their job to make sure the financial statements are as accurate as possible. Although it may be hard to check all the information from a company it’s the responsibility of the auditor to sign off that everything is in check.

Financial statements of the company are significant for the investors who would like to venture into the business operation. It gives them the insight whether the business is making profits or it is doomed to fail;

The accounting department is very crucial to the company. We understand that experienced and seasoned qualified accountant shall be employed for relating accounting duties, internal control, and cash management. This department is like a central unit that will work with other departments of the company. Accounting departments would consist of internal control unit, and financial control. The internal control unit would set policies on how the financial and operational activities of the company shall be carried out, and check at interval to ensure compliance. The financial control unit roles are to ensure the accuracy of reporting, eliminates

(6) Auditors are independent parties who periodically examine a company's financial statements and the systems, internal controls and records used to produce the statements. Since a company's managers prodice their own report cards, i.e., the company's financial statements, auditors play an important role as a control mechanism. They attest that the financial statements conform to generally accepted accounting principles and they provide assurance that the company's accounts are presented fairly.

Accounting has a primary function to provide and develop data measuring the performance and disclosure of the company or organization to assist managers, investors, tax authorities and decision makers. The individual in the role of accounting is called an accountant and he or she has the responsibility to prepare financial statements such as balance sheets, income statements, and cash flows. The different categories for accounting are financial, cost, internal and external accounting. Finance has a function of decision making. The financial manager or consultant is an individual who performs the decision making process and uses the information provided from the accountant to an organization about possible losses and profits. Finance has

Does the Board or audit committee understands and exercises oversight responsibility over financial reporting and internal control?

The most important things is that, the purpose of the establishment of the Code of ethics is that to provide guidance to Directors to help them recognize and deal with ethical issues, to provide mechanisms to report unethical conduct, and to help to foster a culture of honesty and accountability. Codes of ethics also can ensure the discipline of the directors.

If the auditors conclude that the internal control over financial reporting is not maintained effectively by management, auditors should express an unqualified opinion on management’s assessment of internal control over financial reporting. On the other hand, an adverse opinion should be issued on the effectiveness of the company’s internal control over financial reporting.