Ethics Article Review
Ethics Article Review
In his article on accounting ethics, Thea Mann (2006) states that ethics "is a key part of financial reporting." His article explains that financial reporting lays out all the information pertaining to a company's history and that the shareholders and investors rely on the accuracy of this information in order to make "informed, educated decisions." He makes two statements that sum the entire matter up. Mann (2006) declares that "The importance of ethics in business, and specifically in financial reporting is to inspire and ensure public and investor confidence in entities." He further states that "Accounting professionals must have a strong grounding in ethical and moral reasoning as their decisions regarding financial reporting can have devastating consequences not just for individuals but also for corporations and entire nations." The truthfulness of these statements have been borne out many times in recent years.
The article maintains that organizations need several watchdogs to keep them accountable. The three that he feels do the most to guard investors are the Financial Accounting Standards Board (FASB), the Securities and Exchange Committee (SEC), and the Public Company Accounting Oversight Board (PCAOB). He goes on to say however, that until the passage of the Sarbanes-Oxley Act the misuse and abuse of financial trust "plagued the American public and delivered hard punches to the economic health of the entire nation" (Mann, 2006).
This article stressed the concepts that the reading this week also pointed out. Investors, stockholders, and the public expect that financial reports and financial statements are accurate. There can be mistake ...