Question

1 - Do some research and find a full-text article in an accounting journal on earning per share. Give a brief summary of the article and state if you agree or disagree with the author. Make sure to note your sources in APA format and include a complete library website or document number.

2 - Do you think GAAP has ethical implications or do you think it is just a set of reporting standards? Be sure to back up your opinion.

Answer 1

For Part1 please give the article or link or access to the article you would want summary of

Part 2

• GAAP refers to generally accepted accounting principles. These practices are set following rules and regulations, accouting standards of a country. For example in US, U.S. Securities and Exchange Commission (SEC) has adopted the accounting standards published by Financial Accounting Standards Board (FASB) as U.S. GAAP.

  Though main objective of any GAAP is to standardise recording and reporting process it also has ethical implications. Apart from making financials comparable and easy to understand, GAAP aim to ensure that financial statement show fair state of affairs through statements published. GAAP require everyone to follow conservatism while recording transactions. Conservatism as a basic principle of accouting ensure that excessive revenue is not reported, all probable losses are provided for etc. This keeps an ethical check on anyone reporting false numbers. Other accouting principles set by GAAP such as accrual and matching concept ensure that revenue and expenses reported in correct period.

  GAAP also require to check impairment of assets on a periodic basis. It means that organisation has to evaluate whether assets reported by it are likely to result in equal amount of future benefit or not. If there is less likelyhood, then GAAP require organisation to book impairement losses to report fair value of assets.

  There are many such examples where GAAP require people to follow ethical practices and not just play role of reporting standards.