Ethical Issues In Accounting Essay

Abstract. The article reviewed was Creative Accounting: Some Ethical Issues of Macro- and Micro-Manipulation. The abstract emphasizes the manipulative behavior of regulators and company management. The macro- and micromanipulation is considered as attempts to modify financial statements (p. 55).
Introduction. The authors studied ethical considerations and manipulative behavior of prepares of financial statements. Financial statements should be reliable so interested parties can make adequate economic decisions. Using the figures, prepares of financial statements send the message to shareholders and other users. The activities of financial statement prepares may alter the message that will be transmitted to users. This behavior is known as
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The system of accounting regulation is divided between the corporate law and promulgated standards. Over the years, non-government organizations had a significant influence on accounting settings. One of their responsibilities is to address technical issues of accounting activities, enforce adequate auditing mechanisms, and build ethical standards to guarantee the fairness of financial reporting (p. …show more content…
The entities’ profitability has substantial effect on the nation income and budget. There are cases when preparers misled regulators. It happens under the weak regulation. When the accounting regulation does not allow the prepares to achieve the goal, then they ignore rules or alter financial statements (p. 58). The weak regulation provides incentives to preparers for financial manipulations. The authors explained a manipulation as one of the types of creative accounting. Creative accounting refers to management that does not provide true accounting information, and lack of ethical standards.
The researchers selected twenty-seven relevant sources published between 1972 and 2004 Nine of these references were primary sources. Among those are the studies of Amat, Gowthorpe, and Perramon (2003), Cairns (2001), Dechow and Skinner (2000),

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