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Review of Accounting Ethics

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Review of Accounting Ethics
Dr.
ACC 557: Financial Accounting
May 22, 2013

Table of Contents

1.0 Corporate ethical breaches in recent times. 3 2.0 Accounting ethical breaches and their impacts 3 2.1 The Scandal of Enron 3 3.0 Organizational ethical issues and the management failure 5 4.0 Breach of the accounting practices and its impacts 5 5.0 Recommendations by the CFO 6 6.0 References 8

1.0 Corporate ethical breaches in recent times. Ethics is an important aspect of business in today’s enironment. Sometimes management ignores or leaves to state laws to govern the code of ethics within a company. Companies have faced a lot of issues regarding ethical situations in modern times. According to Baker (2012) contrary to the popular belief of the recent global financial crisis resulting from failures of accounting ethics, he argues that there is not enough evidence to support this connection.

2.0 Accounting ethical breaches and its impacts
Breaches of the accounting ethical policies have become a source of concern for the firms today. The proper application of IFRS and GAAP standards is vital for each firm. In recent years as more scandals have come into the spotlight firms have taken more and more internal measures in addition to the policy making at the governmental level to ensure breach of consumers’ trust and laws does not take place in the future. There has been a tremendous increase in the interest in accounting ethics (Cowton, 2013).

2.1 The Scandal of Enron The scandal of Enron in 1990’s is well known in history. When due to misrepresentation in the accounting procedures the company had to face huge losses and collapsed (Hurst, 2004). The financial statements established by the accountants of the company had unrealized or non existing assets (Emerson, 2006). The company had applied for loans, the lending firms relied on the statement of accounts…...

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