Question

Hopwood stated that financial statement ethics issues can be mitigated by “disclosing” aggressive accounting assumptions." Do you agree or disagree with Hopwood's statement? Explain your answer.

Answer 1

Aggressive accounting assumptions: It means overstating the financial performance then what they are actual.

The ethical issues of an organization are as the follows

• Leadership- A organization should always have an independent, unbiased leadership
• Policies and procedure- Everyone should follow the organization policies irrespective of their hierarchy levels and main equal penal provisions if violations are done.
• The organization confidentiality about each person and company information should be monitored and have certain internal control procedure and monitor them on a regular basis and many other aspects etc

Hence not simply depended upon the disclosing of such aggressive accounting assumptions but the other aspects also should be followed and it's not by disclosing the issues it is by stopping such practices and making sure that there controls that no further such disclosures are done.

The statement is not 100% correct but its a one a measure and it is not by disclosing its by stopping those disclosures further.