Question

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

Managers must consider ethics on a daily basis when it comes to being ethical in financial reporting. Understanding what those ethics are and how they affect a business should be understood when in a manager role that deals with financial reporting. Ethics are based on doing what is right and values by which a business or individual operates. It’s about reporting timely and accurate data as well as following policy and guidelines established within the boundaries of the law.

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

There are many challenges that a manager might face with it comes to ensure ethical accounting and financial analysis practices. One of those challenges would be based on how a business is doing financially. If they aren’t doing well a manager may get pressure and be asked from upper management to manipulate the reporting of their financials to make them look healthier financially.   Another challenge is being faced with this unethical dilemma and how to handle how a manager might deal with being put in this situation. Will they forge forward and manipulate the data? Or will they wrestle with their own morals and blow the whistle so to speak and worry about repercussions of doing so.

For chegg: Compare and contrast your perceptions with the above assessment of the role of managers regarding ethical accounting practices and the challenges they may face. Can you identify additional challenges? How does the assessment of the future impact of this course compare with your own?

Answer 1

The role of managers with regards to maintenance of ethical accounting paractices involve being custodian of the shareholder's interest and ultimately doing what is right to ensure that long term sustainabaility of the business is maintained and even at the cost of undertaking short term pain. Thus it would involve timely and accurate reporting of the financial health and performance as well as resisting pressures to manipulate the numbers to paint a better than actual picture of the finanical health of the company.

Additional challeneges for the managers is also to counter the tendency to take actions which glorify actions taken by self or manipulate numbers to get better bonus payouts. Thus not only they have to resist pressures from the top, but also resist temptation of their own welfare and good. Moreover, most managers have a short term view of the organization's health because of short tenure of their job at the organization, thus alignment of interest is another challenge.

The future impact of this course is that it is likely to produce managers who are more ethical and more sensitive to owner's interest. Also they are less likely to indulge in accounting or financial wrong doing in their work areas.