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Ethics Set By Congress, PCAOB, And FASB

1144 Words5 Pages

Introduction Ethics in accounting can be defined as a set of moral principles that a company needs to follow and enforce in their employees. The reason why acts like SOX of 2002, and GAAP exist is that they give a company set specific rules that they need to follow. Having these set principles has many benefits such as improved reputation, not as many liability issues, build trust within the company, and protects the company from fraudulent acts. In this paper, you will see different cases where the ethics of a company were ignored and the effects of it. Also, the different acts and principles that were set by Congress, PCAOB, and FASB to ensure that companies are following the rules and are doing things correctly. Although there are many …show more content…

These are aspects of accounting that require individuals that are trustworthy because they are dealing with federals things. For example, in auditing, there are individuals that go out to companies and examines the companies financial records. After they test the different controls, they need to write a report stating whether the company had material misstatements and if the information provided was in accordance with GAAP. The PCAOB set a variety of audit standards that auditors need to follow. If these standards are not followed correctly there can be consequences for the company and also to the auditor. These set standards act as an auditors ethical rules that they need to follow. Another example would be the standards that tax accountants need to follow. The items that they report go directly to the IRS and can affect the accountant and also the client. Accountants need to do to report items that are valid, have proof, and do things in an ethical …show more content…

In 2001, they reported a loss of $618 millions dollars, and after this, the SEC began an investigation (CNN). After a failed attempt at merging with Dynergy, the company filed for bankruptcy. The US Department of Justice began to investigate why they suddenly declared a bankruptcy. In 20002, it was discovered that they had made accounting loopholes that hid the fact that the company was in billions of dollars in debt. This company was audited by Arthur Anderson, but he was not an ethical individual. When the issue abrupted, he was destroying documents that had to do with the Securities and Exchange Commission (SEC). This caused Anderson to receive jail time because he did something completely illegal. He was in charge of auditing and reporting those fraudulent acts. The CEO of the company also did not do anything about the fraudulent acts occurring in their accounting

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Abstract This case study examines auditing, Misrepresentation of Facts in Fantastic Developments, Inc. Further how accounting can be used to mislead decision makers into acting against their own interests operation of legal requirements for financial reporting and several areas where ethics and accounting interact are addressed. Financial statements of a company determine the company’s market value and number of investors. Fantastic Developments, Inc is a company that has been struggling financially and had experienced recurring operating losses. In contrast Fantastic Developments, Inc has presented a furnished, misrepresentation of facts about their financial statement in order to get loan from Coshocton National Bank (CNB).

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Ethicality Statement: The moral of values that the human growing up with, addition to the work ethics rules that prohibit not reveal or disclose any secrets or resources of any company to a third party especially the accounting dept. because of the sensitive computational information. This information only allowed for a company for developing and finding solutions to their problems as a practitioner system.   Client Report: Dear General Manager of House of Tools & Machinery Company, Any company type in any field needs a purchasing dept.

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The goal of PCAOB is to oversee the audits of public companies in order to protect investors and the public interest by promoting informative, accurate, and independent audit

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Introduction Legal Aspects of Health Care Administration textbook outlines several committees that are mandatory in a health care organization. The textbook explains ethics committee which is one of the mandatory committees in a healthcare organization. In a healthcare organization the ethics committee helps to address legal and ethical problems that happen during the duration of a patient’s care and treatment plan. The committee serves as a resource guide for patients, family members and healthcare staff. Also, the ethics committee offers the option of objective counsel when having to deal with difficult healthcare issues.

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The Securities Exchange Commission (SEC), Financial Accounting Standards Board (FASB), and the American Institute of Certified Public Accountants (AICPA) all have an interesting relationship with each other. The SEC has the legal authority to the set standards of accounting in the United States, but has delegated that authority to the FASB. And the American Institute of Certified Public Accountants dictates the conduct of certified public accounts that practices their profession utilizing the laws and principles formed by the Securities Exchange Commission and Financial Accounting Standards Board. Organizations use these three authorities often to present to third parties their financial information. Accountants prepare financial statements in accordance with GAAP,

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The auditing standards require that the auditors execute their duties within the confines of the regulating standards. However, sometimes the auditors are faced with the ethical dilemmas that can compromise their ethics. The code of ethics governs the behavior of the CPA practitioners and thus they should ensure that they adhere to them. Some of the codes of ethics which govern the behavior of the CPA practitioners are: Integrity: This aspect demands that the auditors should act honestly and truthfully when providing the auditing services to their clients.

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The present file is based on the ethical and corporate governance issues which CPA Australia is facing in current time. The problem regarding self-promotion by its CEO, excessive remuneration packages to the CEO and board of directors, large compensation packages to the other professional financial accounting bodies and use of unethical language in the working environment have been described into the file. Along with this, appropriate solutions have been also recommended to the respected company with respect to the discussed problems. Table of Contents EXECUTIVE SUMMARY 2 INTRODUCTION 5 ANALYSIS OF THE PROBLEM: 6 CONCLUSION 8 REFERENCES 9 INTRODUCTION Ethics refers to the part of philosophy which includes systematizing, defending and recommending the concepts regarding what is wrong and what is right. This term seeks to answer the questions regarding human morality by explaining various concepts such as good and evil, right and wrong, virtue and vice, justice and crime and much more.

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After the 2008 Financial Crisis, and with the addition of the Wells Fargo Debacle, ethics within Financial Institutions have become a hot topic. Consumers are hesitant to place any trust in the financial sector. This paper defines ethics and what it takes for a financial institution to make ethical decisions. It not only looks at the organization but also looks at management and individual employees. The paper also addresses the ethical issues that can arise within financial institutions.

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Maintaining high ethical standards is imperative to uphold the integrity of decisions that are being made on a daily basis. Every organization makes ethical decisions every day. Accounting professionals handle sensitive information on a daily basis which requires adequate knowledge of the code of ethics for professional accountants in order to help guide their decision making. All accountants are required to follow the code of ethics, but some may not just to make it easier on themselves or because they were told not to. Not maintaining a high ethical standard in the accounting profession can lead to wide reaching negative consequences to those that are entrusting their financial wellbeing to the accounting decisions being made for them.

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After accessing the American Institute of Certified Public Accountants (AICPA) principles, I believe ethics is about what is respectable in a society to make individual moral conduct. The ethical Dilemma is being able to understand unethical situations, no matter the number of individuals involved or who has an appropriate action. You must report. The ethical Behavior in Accounting is about Certified Public Accountants (CPA) are the eye of the public. Their decisions are guided to be in line with practice standards.

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On the other hand, corporate ethics force organizations and related people to apply the good business practices to reduce the corruption deals and scandals, which raised the need of ethical working environment. In the same manner, corporate ethics refers the use of systems in a business process, which could help the non related person to know about the movement of organizations in the market. This is because that the corporate ethics develop codes of business ethics, ethics based training, officers, and ethical committees to conduct the entire business process in a systematic manner (Pies & Koslowski,

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In the article, “It’s Time for Principles-Based Accounting Ethics”, I agree with the authors that there needs to be more than a minimum set of standards. A minimum set of standards allows someone to have a range of acceptable behavior even though it may still be wrong or there is no specific guideline stating it is wrong. Accounting needs to have ethics principles which describe the correct ideals as guidance rather than a minimum set of specific ethical standards. Having standards to go by makes it easier for accountants to properly follow the rules for which the standards describe, but will not give guidance for situations that do not have a specific rule or interpretation. With principles-based accounting ethics, the accountant has a

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• Due Care- allows the continuous duty for a business to maintain professional knowledge and skills that are acted accordingly and diligently based on professional standards and services. • Confidentiality- confidentiality of information that is acquired has to be respected and not disclosed by Professional Accountants to third parties without permission. • Professional Behavior: Professional Accountants have to make sure not they are complying with applicable laws and regulations that can possibly affect their right to practice. Importance of Ethics in Accounting

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The four standards of the IMA’s ethical professional outline Competence, Confidentiality, Integrity, and Credibility as the corner stones of an ethical company and accounting department because they set clear guidelines to follow in order to achieve ethical excellence. The four standards refer to the ability of an accounting professional to maintain a level of professional character and follow laws and regulation in Competence, Confidentiality refers to the ability to not divulged information unless legally required and not to use information to enhance or damage others, Integrity refers to the to ability to address and mitigate conflicts of interest before they can become problems and advice management of any conflicts that hinder the

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