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Legality and Ethicality of Financial

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Legality and Ethicality of Financial Reporting
Paula E. Noble
University of Phoenix
January 19, 2015
Mrs. Juanita Davis

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Introduction
Excello Telecommunications has been a profitable company for several years, but for the first time they have encountered an increase in competition for its products by overseas manufactures. It seems that their earnings will not be met for the year ending 2010. Therefore, management is worried of how the company’s future with investors will be impacted (Legality and Ethicality of Financial Reporting Anti Essays, 2013). A large sale has been made right at the end of the year and this sale could make the company better or not. At the end of the year is when buyers can purchase the items. This is not entered in the accounting period and that’s a problem. The CFO wants to draw attention of the investors, so he is asking if there is a way to report the sales for this year, in this year’s books
Legal Issues and Laws
In a business, there a federal and state laws that must be followed when financial transaction are being reported. These three important components of accounting go hand and hand when to come down to enforcing laws are the Sarbanes-Oxley act, the AICPA Code of Conduct and the Generally Accepted Accounting Principles. Sarbanes- Oxley was created to protect investors from Corporations that may try to do fraudulent accounting activities. AICPA Code of Conduct sets standards for the professionalism and auditing for private companies, non-profit organizations, federal, state and local governments (“American Institute of Certified Public Accountants”, 2013). Generally Accepted Accounting Principles are used to prepare, present and report financial statements for a wide variety of entities (“Generally Accepted Accounting Principles”, 2013).

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A meeting has been schedule for the...

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