Accounting Theory – Seminar 2
Briefly describe the accounting profession/What is the role of accountants? Accountants analyse costs of operations, products, and special projects. Compute taxes owed, prepare tax returns. Organize and maintain financial records. Suggest ways to reduce costs, enhance revenues and improve profits, Improve businesses efficiency.
Critically discuss the role of the CFO Andy Fastow in the ENRON scandal Fastow created hundreds/ of "special-purpose entities"–off balance sheet partnerships. Designed to transfer Enron's debt to an outside company and get it off the books--without giving up control of the assets that stood behind the debt. He brought in more than $45 million for himself from the partnerships. He said he lied to Enron's chief accounting officer about how much it would cost for Enron to pull out of a contract and Fastow and his buddies pocketed the 19millions he'd added on to the deal. Do some research online: Do you find standards of professional conduct or a code of ethics for the accounting profession?
ICAEW AND ACCA, CIMA, AAT etc. have code of ethics.
A code of conduct typically is issued by a board of directors; however, it outlines specific behaviours that are required or prohibited as a condition of ongoing employment. The codes attempt to regulate behaviour in very different ways. Ethical standards generally are wide-ranging and non-specific, designed to provide a set of values or decision-making approaches that enable employees to make independent judgments about the most appropriate course of action. Conduct standards generally require little judgment; you obey or incur a penalty, and the code provides a fairly clear set of expectations about which actions are required, acceptable or prohibited.
Critically discuss the role Arthur Andersen in the ENRON scandal
Arthur Andersen was Enron’s main accounting firm. It was responsible for auditing at the firm and for verifying that...
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