Question

ACCOUNTING THEORY

question 1.

a. Analyze and discuss the social and ethical issues/ dilemma in financial reporting.

Answer 1

Solution:

Financial Reporting: This is refer as to disclose all financial results with the help of various financial tools tables statements for the management and stake holders =, investors, customers to derive how the company or organisation is performing in specific period of time.

Ethical and Social issues that is present in reporting can have various negative impact.

Ethical financial reporting and accounting practices corresponds to basic human requirements. It creates credibility with public and employees. Ethics and accounting exist to protect the public from unscrupulous corporation. Most of the professions accountants hide or manipulate the information. Most accounting scandals have taken place on fraudulent financial reporting. It means that the management of company presents the misstatement of the financial statements. Normally, this is carried out with the intention of misleading investors and maintaining the company's share price in the present scenario business ethics has its own significance which helps to come from the global financial scandals. There is a requirement a direct ethnical guideline which spread a awareness to protecting from this corporate scandal that had taken place in different areas in different countries which are very harmful to the economy and our society.

Faking the Numbers-With fake numbers, investors may look to something that isn’t actually there.

Asset Misappropriation-From an ethical standpoint, any supplies, money, or other items taken from the industry is stealing from the patients that need it most. This means creating a downward spiral of events from a monetary loss to ultimate organizational failure.

Disclosure Concerns-It is also an issue to disclose too little. If a loss happens, they may choose to hide this loss from potential investors to create a facade of success.This type of disclosure is unlawful and dangerous.