Assignment 1: Accounting Ethics
Assignment 1: Review of Accounting Ethics
1. Given the corporate ethical breaches in recent times, assess whether or not you believe that the current business and regulatory environment is more conducive to ethical behavior. Provide support for your answer.
With the historical amount of fraud that has taken place over the last few decades, there had to be a stop of some sort to this type of unethical behavior. Through our class lectures, discussions, and readings, I have learned about the changes made to the business of accounting to ensure that the financial documentation occurred in an honest and professional manner. I would say that I am a believer that the current framework for accountants is working and does lead to more ethical behavior. The Sarbanes-Oxley Act of 2002 was a key milestone in ensuring the appropriate recording of financial information takes place. The SOX framework can ensure reliable and complete financial information due to the strict requirements set in place. Management (as a result of SOX) has to take a much more active role in their accounting and determine that all financial information is certified and correctly gathered. As a result of numerous scandals, SOX has made the penalties for fraudulent activity more severe, working to the benefit of accounting professionals since there can be dishonest influence placed upon them from the companies or corporations they work for. Additionally, the change to the image that has been placed upon accountants due to the scandals that took place has drastically improved. The act helped to build trust in both investors and managers that would otherwise be nervous that dishonest accounting would take place. Certain sections of the act helped to solidify my support of the regulatory environment and the effect on the behavior in accounting. According to the American Institute of CPAs, Section 302 lays the groundwork to honest accounting, by creating a set of procedures to ensure complete and
1. Given the corporate ethical breaches in recent times, assess whether or not you believe that the current business and regulatory environment is more conducive to ethical behavior. Provide support for your answer.
With the historical amount of fraud that has taken place over the last few decades, there had to be a stop of some sort to this type of unethical behavior. Through our class lectures, discussions, and readings, I have learned about the changes made to the business of accounting to ensure that the financial documentation occurred in an honest and professional manner. I would say that I am a believer that the current framework for accountants is working and does lead to more ethical behavior. The Sarbanes-Oxley Act of 2002 was a key milestone in ensuring the appropriate recording of financial information takes place. The SOX framework can ensure reliable and complete financial information due to the strict requirements set in place. Management (as a result of SOX) has to take a much more active role in their accounting and determine that all financial information is certified and correctly gathered. As a result of numerous scandals, SOX has made the penalties for fraudulent activity more severe, working to the benefit of accounting professionals since there can be dishonest influence placed upon them from the companies or corporations they work for. Additionally, the change to the image that has been placed upon accountants due to the scandals that took place has drastically improved. The act helped to build trust in both investors and managers that would otherwise be nervous that dishonest accounting would take place. Certain sections of the act helped to solidify my support of the regulatory environment and the effect on the behavior in accounting. According to the American Institute of CPAs, Section 302 lays the groundwork to honest accounting, by creating a set of procedures to ensure complete and