(1)Applying ethics as beneficial to invest in financial products.

(1)Applying the Agency and Stakeholder Theories to the
Enron Debacle: An Ethical Perspective

(1)If a firm is not
doing business in an ethical way, it is committing
a series of blunders and crime. As discussed in the case Enron is a famous
example of ethical negligence.
It shows how indulging in immoral
financial activities and breaching the code of conducts damaged the public sentiments. The Enron
management indulged in fraudulent reporting
and bribed the external analysts on their payroll. This predicament resulted in
bankruptcy and misfortune for investors. Therefore such case that started in a discussion room hit the global face as an
lesson of ethics and morality
towards corporate reporting.(1)

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(2) Business Ethics and Financial
Reporting Quality: Evidence from Korea

 (2) Business ethics is a fundamental step
towards attracting and maintain customer base. Stakeholders consider business
ethics as beneficial to invest in financial products. They don’t buy from
companies accused of unethical activities and liquidify their investments of
such guilty firms. Institutional investors also refrain from trading with
immoral companies. If a firm is publicly renounced guilty of practicing
unethically, the users of these reporting outcomes exit the investment lines
because there are many highly sensitive buyers who hold high moral respect. (2)

(3)Corporate Collapses in Australia: Case of Harris
Scarfe

(3)Poor ethical mindset leads
to unlawful management decision. Management is the front line for the
responsibility, appreciations and blames and ethical line of directions saves
energies and investment for future benefits. It does so because in the race of
competition many firm don’t want to be left behind and always emphasize on top
performances. Thus when individual goals are not aligned with the truthful
believes, the whole firm suffers from down fall. Ethics encourages team
building because most of the problems arises by the individual motives and
gains. (3)

(3)Ethics reporting provide
immense benefits to accountants and those who rely upon them. Being moral
towards their responsibilities bring prosperity in a long run. It helps them to
develop higher levels of reliability and competence in corporate settings. By
adherence to the concept of ethics, accounting and audit professional achieve a
greater goal, i.e., social togetherness. Corporate morality narrows the
expectation gap which lies between the top management and the auditors. If an
accountant is not faithful towards financial report preparation or if the
auditor is not trustful regarding checking the authenticity of financial
reports, it causes a negative impact on the accounting and auditing society as
a whole. In many case accountants and auditors fall prey to greed of top
management by providing nonrealistic audits like in the case of Harris Scarfe
in the early millennium. The firm collapsed after a series of fake financial
postures. (3)

 

 

 

(4)ETHICAL ISSUES OF FINANCIAL
REPORTING

Intro

(4)A system of belief shaped by morally accepted code of conduct is
called ethics as discussed in
this article. Business ethics is the adoption of ethical conduct towards
running the affairs of business. Though ethics are voluntary in nature but in
today’s world business ethics are related in active as well as passive way.
Ethics restricts peoples from indulging in fraudulent and criminal business
practices which are highly disregarded in human societies. It builds high
values for a business like openness, integrity, reliability and honesty. The
desire to earn profit is at the core of each business but the means to achieve that
goal through ethical practices reflects the core humanity features. In recent
past, the importance of ethics in business has gained a lot of importance and
most probably after the fall of giant companies due to fraudulent reporting,
misstatement of revenues and faking the company share prices. Ethical course of
conduct in business always bring fortune and regarding corporate reporting,
ethical conduct has gain significant importance for success and credibility in
long term business goals.(4)

(5)Implication of financial
statements

(5)Ethical consideration is essential when it comes to stakeholders of
different financial reports. Ethical empower independence in cases where the
users of a financial document demand a higher degree of authenticity of the
information provided to them for future endeavors. (5)

(5) Moral and dignified approach becomes a necessity because many behavioral
theories says that human are motivated by their own interested and as well as according
to this report
opportunistic considerations rises the platform for exercising self
interest.  (5)

(6)multi-dimensional ethical
approach to accounting and reporting practices

(6)A company when exercise
business ethics with full zeal it actually does it through trading off between
the social responsibilities and financial objective. Ethical practice attached
many corporate benefits for the management, independent player and investors
and society as a whole. Ethical firms are apparent by the moral values they
promote and experience in their surroundings. Business ethics give rise to
openness in a firm because the stakeholders are more concerned when a firm keep
their affair hidden from the investors and shows them false truth to believe. The
welcoming attitude is necessary to boost the confidence of stakeholders in the
firm. By openness, a firm takes corrective measures towards betterment when
necessary and do not fake the reality by indulging in various misleading activities.
It helps them to keep on improving their operations and this is the reason that
they accept all failure in business competencies which could be overcome in
shorter period rather than misleading the users of financial reports towards
doom forever.(6)

(7)FINANCIAL STATEMENT ISSUES

 (7)So auditors are more on the verge on blamed
because they have to perform their duties in more independent settings to
ensure the validity, authenticity and fairness of the financial reports
prepared by a company management. (7)

(8)AUSTRLAIAN COLLAPSE ALI YAFTIAN

(8)Business
boundaries for long term sustainability are defined so that the public interest
towards the firm is not violated by the intermingling of non-performing
services. Especially ethical behavior uplifts the rule and regulatory
guideline. For auditor, independent and confined services create fair outcomes
of the services they provide. Like
discusses in the case that auditor are more at verge of doubtfulness if
they go beyond the limits of their responsibilities and indulge in activities
irrelevant to the task they are paid for. Such activities by Anderson (in the case) are not
immoral until they conflict with the public interest rather than management
intentions. Once an auditor is motivated by personal gains they become
questionable and commit unethical practice because they are bound by the payers
to perform on sinful tone of management (in the case). (8)

(9)Financial reporting
regulations, ethics and accounting education

 (9)However there are shortfalls
that despite massive importance and emphasis of ethical representation in
personal as well as professional life, sometimes ethical behavior is turned
off. According to this report
there is a believe that the ethical negligence cause severe blindness to people
who believe that what they are doing is lawful and ethical despite the whole
world shout against their ethical illiteracy. (9)

Conclusion

Based on the discussion, ethical empowerment is the
safeguard against evil practices of corporate world. Many regulatory bodies have
emphasized the importance of ethics in their rules and code of conduct. Ethical
perspective of business dealing could be made more vigilant by enforcing strict
check and balance across the financial reporting matter. In corporate world,
reporting is agreed to be the most crucial element which is based upon higher ethical
standards for survival so it must be dealt with utmost care to deliver optimum levels
of ethical behavior. The need therefore is to legalize such matters which fuel
the personal interests and opportunity gaps. In business, the positioning of
administration team and reporting team must be shifted towards the users. As it
is not a matter of some companies; it is a shield for whole human society
against atrocities of financial misconduct and lifelong shames.