Question

For this discussion, you will explain the role of management professionals with regard to accounting and analysis ethics, and you will detail any challenges managers may face in ensuring ethical accounting practices. Review the codes of ethics and professional standards in the module resources and then address the following questions:

What is the manager’s responsibility regarding ethical financial reporting?

What challenges might a manager face in ensuring ethical accounting and financial analysis practices?

Answer 1

MANAGER'S RESPONSIBILITY REGARDING ETHICAL FINANCIAL REPORTING

1. Monitor the preparation of financial statements : it is the responsibilty of the managers to have an overview of companies financial statements , wherein its transparency is monitored. Trust is key factor when it comes to financial reporting of a company and trust comes in with transparancy in financial reporting system of a company which is in turn a responsibility of the finance manager of the company.

2.Ensure the accuracy of the financial statements : it is the role of managers to review the reports , verify and vouch its accuracy and look into the minute details of the financial report. the financial reports are a face of a company hence managers should ensure that financial reports present a fair picture of companies activities.

3. help in making important management decisions : managers have a role in advicing the management andmaking several decisions that has an impact in the budgets n finances of the company. on the basis of the financial reports various analytical procedures are to be carried out by the managers such as financial forcasts, trend analysis , budgetting etc

4. check conformance of the financial reports with the applicable financial standards and guidelines : managers should have adequate knowledge about the relevent accounting standards and guidelines as well as the applicable legal compliances. managers should ensure that the financial reports conform to the international financial reporting standards and guidelines.it is the responsibility of the managers to report any noncompliance regarding company policies and local law and regulations

5.Timeliness of financial statements : it is the role of managers to ensure that the financial reports are generated in a timely manner. Meeting the deadlines are of prime importance.

CHALLENGES FACED BY MANAGERS IN ENSURING ETHICAL ACCOUNTING AND FINANCIAL ANALYSIS PRACTICES:

1. managers usually have a subordinate team of various individuals working with the numerical data. therefore in case of an error or a missing important data it imposes huge pressure on the managers to verify and correct the errors in a timebound senario.

2. there is a massive challenge when the inputs to the financial reports come from various quaters of the company and it has to be presented in a unified manner.

3. the ever changing business environment is another challenge to the managers that comes in way of ethical financial reporting. managers as well as the team should be well versed with current business environment and the updated standards , rules and regulations.

4. staff and line conflict is another issue that managers face in case of the ethical financial reporting . that is managing and cordinating the efforts of the team of subordinates . situation where the subordinates fails to meet the deadlines or their conflict against the interest of the company.