Society as a whole is responsible to conduct business ethically. Parallel to the formula that we use for inventing the laws that a society created to promote specific behaviors and actions that are appropriate to build trust and relationship, it is similar in corporations' behavior. According to Svensson & Woods "Society does have expectations of business and of its business leaders" (Svensson & Woods, 2008, p. 306). Ethical business behavior is a combination of values and normative ethics, which drive an organization. When analyzing Anglo-American and Primark for this case study.
Integrity is under section 110. This fundamental principles is most important element in accounting profession. This is because integrity need accountant to be straightforward and honest in all professional and business relationships. In this principles also restricted accountants from any benefits or advantages for themselves only. That why ethics should be taught in accounting subject so accountant will be honest, candid and forthright with financial
This also includes establishing a private-sector regulator to oversee the auditing profession to combat accounting fraud, and enhancing financial disclosures. Companies are under more pressure to comply with SEC and Sarbanes-Oxley Act after recent and growing concerns about their ethical behaviors. Role of Ethics and Compliance in the Financial Environment Starbuck’s role of Ethics and Compliance in the financial environment applies to the Chief Executive Officer (CEO), Chief Financial Officer (CFO), comptroller, and other financial leaders. The company’s code of ethics encompasses
EHT/376 The Purpose of the AICPA Code of Professional Conduct The Code of Professional Conduct of the American Institute of Certified Public Accountants is a voluntary association of Certified Public Accountants. This code is used to discuss the ethical obligations of CPAs and to provide guidance and rules to all accounting professionals in public practice. I believe that the Code of Professional Conduct is considered as the foundation of ethical reasoning in the accounting profession because every CPA has an ethical responsibility and a commitment to the public, to clients and to colleagues of honorable behavior, even at the expense of personal advantage. Following I will discuss the three main purposes of the AICPA Code of Professional Conduct and why I believe these three purposes are most important (Mintz & Morris, 2011, Pg 50) . The purpose of the AICPA Code of Professional Conduct includes responsibilities, the public interest, integrity, objectivity, independence, due care and scope and nature of services.
GAAP stands for Generally Accepted Accounting Principles. The common set of accounting principles, standards and procedures that companies use to compile their financial statements. GAAP are a combination of authoritative standards (set by policy boards) and simply the commonly accepted ways of recording and reporting accounting information. GAAP are imposed on companies so that investors have a minimum level of consistency in the financial statements they use when analyzing companies for investment purposes. GAAP cover such things as revenue recognition, balance sheet item classification and outstanding share measurements.
What are agency problems? * Occurs when managers act in their own interests and not on behalf of owners (stockholders) What is corporate governance? Corporate governance is the set of rules that control a company’s behavior towards its directors, managers, employees, shareholders, creditors, customers, competitors, and community. d. What should be the primary objective of managers? * The primary objective should be shareholder wealth maximization.
The AICPA is basically a community of accounting professionals and CPAs. Individual: AICPA Code of Professional Conduct The purpose of the AICPA is to have a precedent of set ethical standards for the accounting profession and auditing standards of companies that are private, nonprofit organizations, federal, state and local government. In having support for those in the accounting profession and to improve the profession as a whole. It is responsible for aiding in setting certain technical standards for those accounting professional who goes on to get their licenses to becoming CPAs. The AICPA have several publication that helps with guiding the accounting profession and to enhance the member’s technical and professional abilities.
Consider the following: • What kinds of accounting, audit, and tax services does the firm provide? • Who is their target market(s) by industry and company? • Why would prospective clients give serious consideration to have KSM handle their accounting, audit and tax services? 3. Working in an ever changing accounting, audit and tax environment that is driven by change and strict regulatory adherence, how does the managing partner (David Resnick): • Ensure strict employee compliance to federal and state regulation and the company’s high ethical standards?
In Order to fill the gap between directors and accountants, independent directors have to work in audit committee, likewise, executive officers could not change the accounting standard to cover up the financial problems. Therefore, the responsibilities of independent directors and choosing the disclosure and transparent accounting standard are important elements to manage a company. The responsibilities of independent directors Wallison, the codirector of American Enterprise institute’s program on financial markets deregulation (2006) believed that independent directors is an important part of corporate governance .He stated that independent directors and the contortion of financial status are problems in some companies. Cornfrod, the Bard college professor (2004, p.7) argued that independent directors failed to avoid the collapse of company at sometimes. These independent directors neglected in their management job.
Though ratio analysis should not be used alone as there are several limitations in the usefulness of their data, they will give general historical information. Managerial decision-making should consider all factors in leveraging their position within their specific industry to excel and continue to generate positive revenue. Financial statements are the driving forces behind understandings a company’s financial position in the market place. Financial statements can effectively communicate what financial decisions have been made, how the bottom line was affected and what are the necessary steps to keep a company in business. Financial statements give the relative fiscal health over a period through interpretation; by identifying corporate strength and effectively examining overall managerial decision-making through ratio analysis.