Ethical Issues In Managerial Accounting

While the organization blatantly made mediocre managerial decisions, such decisions merely reflect the competitive business environment the financial services industry has grown accustomed to. When it comes down to it, the employees of Wells Fargo did what most individuals would do when faced with the terrifying reality of potential unemployment. In the fast paced, money driven, cut throat environment that is known as twenty first century Corporate America, the lines often blur in terms of ethical decision making. Wells Fargo deserves to receive the blame in this situation in order to demonstrate that the big business taking advantage of the individual is intolerable and that the consumer demands a change. Modification of organizational behavior,

financial statement information led to inflated stock prices and that this contributed to the stock

Pensions are known as a retirement account that most employers maintain to give employees who have stayed with the company a payout upon retirement. Most employers give recipients of pension accounts a choice between a lump-sum payment or monthly annuity payments that are based upon the amount of time that the employee worked and their final salary prior to leaving the company. There are different types of pension plans and the use of each one is dependent on the employer. The Governmental Accounting Standards Board and Financial Accounting Standards Board both have to report pensions and have designated different ways to account for it. The GASB and FASB have always been separate entities but

Audet was a financial adviser. He was several times fooled by what Grant calls “takers,” or people who take advantage of others. At first, his definition of giving meant to help those who were in trouble. He helped due to sympathy. However, as he saw that his own friends and colleagues were taking advantage of his generous acts he stopped helping. These experiences changed his perspective on how to help others, including takers. He has started to think like a taker. Audet says, “ when we engage in perspective taking, considering our counterparts’ thoughts and interests without sacrificing our own interests, we’re more likely to find ways to make deals that satisfy our counterparts without sacrificing our own interests” (197). He considers takers’ interests as well as his own and thinks about ways for both to win. Audet has learned that one can keep being a giver but there has to be a way where both the helper and the receiver can

Ciftci, M., Mashruwala, R., & Weiss, D. (2016). Implications of Cost Behavior for Analysts ' Earnings Forecasts. Journal Of Management Accounting Research, 28(1), 57-80. doi:10.2308/jmar-51073.

Target Corporation’s accounting policy is both efficient and reliable. However, in relation to the ratios discussed earlier, the use of estimates accounting policy is one that may require additional attention. This policy requires management to make estimates and assumptions affecting reporting amounts in the consolidated financial statements which can link to the payout ratio, the return on assets ratio (ROA), and also the earnings per share ratio (EPS). By comparing the estimates, management makes in comparison to the actual numbers presented in the statement, it would support us to make reflections on numbers that look unusual. All three ratios connect to the assertion accuracy since their amount

Throughout the case, it can be seen how Cendant Corporation was performing activities that dealt with the interactions of income smoothing. The main cause of performing with Income Smoothing was to make their shareholders and investors believe that they had a professional and ethical operation running. Income smoothing can best be represented as how either gains or losses from a certain period are taken into a good or bad period with losses or no profits. Income smoothing throughout this case was used as an unethical practice performed by Cendant Corporation to achieve financial stability and falsify numbers to make the investors believe they had premium stocks when in reality it wasn’t what was really occurring which would then lead to the

The e-mail system is provided for the use of staff and other authorized users for corporate

Net sales, cost of sales, gross margin, expense, operating income, interest income, taxes, cash, assets, long-term and short-term liabilities, Properties, common stock dividends, total shareholder’s equity are all the accounting policies. All of those and other financial data be used in preparing the Macy’s financial reports.

There are many reasons why ethical problems continues to be ignored and one of the most obvious is based off money solely and how much money an organization can profit for the company itself and to fatten their pockets. In a nonprofit organization, the board of directors are completely liable for any actions that are taken by any employee or volunteer, under their command. This includes the CEO and the CFO. It does not matter, if the actions were made as a direction of the board, or not. A Code of Ethics/ Code of Conduct or Ethics and Compliance program are only as good as the persons for which that they apply. Organizational culture is also; only as good as the persons for which they apply Enron, Tyco, and WorldCom are all memorable. These scandals happened in 2001 and 2002.

Traditionally, pro forma earnings are lampooned as “earnings before the bad stuff”, which are lower than the figure according the GAAP. Companies may present to the public their earnings and results of operations on the basis of methodologies other than GAAP. And this presentation in the earnings release is often referred to as “pro forma” financial information. Many companies were thought to be using pro forma figures not only to exclude one-time charges, but also to strip put recurrent costs and other elements that they claimed concealed their “true” performance.

Globalization is a fact of Economic Life – Carlos Salinas De Gortari. Globalization is not a new thought. This process of interaction and integration among the companies, people and government of different countries is happening from ages. Technology has been the major driver of globalization. Economic life has been transformed dramatically by the advances in information technology. However, globalization is controversial. The proponents of globalization claim that it gives an opportunity to the poor countries to grow and develop economically. On the other hand, opponents claim that free market has benefitted multinational corporations at expense of the local people, culture and enterprises. The management concepts create a significant

The unrealistic expectations of external users of financial statements to assume that an auditor remains totally impartial to client influence is a conclusion drawn from psychological research. The legal system forms the opposite view and has determined that external users should be able to rely implicitly on an auditor’s determination. Accounting standards have set expectations of auditor independence and neutrality. (Max H. Bazerman, 1997) The entire concept of professional scepticism and its application is the true and fair representation of financial statements to the users of these

One of them is underreporting income. The reason why accountants underreport profits in different firms is so as to avoid paying massive taxes. Underreporting income is illegal, and individuals or companies caught doing so pay large penalties an if the case is extreme they are charged in a court of law. Underreporting income makes the government lose tax revenue that could be used to provide various social amenities to its citizens. The ethical issue in such an instance is the accountant reporting the true financial status of an organization in regards to the profit, liabilities and companies assets. It is easy for those accountants that are unethical to alter the financial records of a company. This makes the company seem to be doing well in the short term, but in the long run, it leads to failure of the company. The other ethical issue is a falsification of documents. Falsification of documents involves changing the details of the documents which are original so that they can appear real ( Bampton and Cowton, 2013, p.552).this is done with the aim of deceiving another person. Some of the documents that are easily falsified are personal checks, tax returns, bank accounts records and birth certificates among others. Tax evasion is usually a major reason for falsifying documents. A person can only be held liable if the aim of falsifying the document is to deceive another person. However, if a person a person unknowingly is found

Having different accounting standards in the world is a problem for multinational public limited companies and investors in order to be able to compare and evaluate financial statements (Doupnik & Perera, 2009). Due to the economic and financial scandals and meltdown in recent years, the pressure has been increased on some countries such as United States. Therefore, it must eliminate the gap between the International Financial Reporting Standards (IFRS) and US Generally Accepted Accounting Principles (GAAP). The world of accounting diversity will have consequences on such changes, and the standard convergence of US GAAP with International Financial Reporting Standards also largely affect corporate management, investment, stock market, accounting personnel and accounting standard setters. In addition, the convergence of accounting standards will change the approach for international accounting harmonization to CPA and CFO, it affects the quality of international accounting quality standards and the effort made toward GAAP and IFRS convergence