Ethical issues in accounting

Ethical issues in accounting: 

Ethical issues in accounting Facilitator – V. A. Banerjee

Types of financial accounts: 

Types of financial accounts Financial accounts Accounts that are used to report to shareholders Internal Management Accounts Accounts that show internal operations and financial activities of a business internally 2 Facilitator - V. A. Banerjee

Importance of financial statements: 

Importance of financial statements Fictitious Revenues Fraudulent timing differences Concealed liabilities and expenses Fraudulent disclosures Fraudulent asset valuation 3 Facilitator - V. A. Banerjee

Causes of fraud: 

Causes of fraud Unduly aggressive financial targets Domination by a person without controls Major performance related compensation Pressure to reduce tax liabilities Aggressive accounting policies to keep stock prices high Inadequate monitoring and control Weak corporate ethics Inadequate knowledge of accounting & finance Facilitator - V. A. Banerjee 4

Importance of transparency in disclosure: 

Importance of transparency in disclosure Maximizing long term owners value Data misinterpretation due to non-consistent rules and regulations Manipulation in figures leads to misallocation of funds 5 Facilitator - V. A. Banerjee

Role of Accountants: 

Role of Accountants Professional accountant employed by firms The management accountant To provide information that is needed for formulating policies, planning and controlling activities of employees, decision-making, disclosures to shareholders and other investors The financial accountant To provide economic information to the investors, employers, suppliers, etc. describing financial performance of organization, statutory compliances under Companies Act, measurement and presentation of financial information 6 Facilitator - V. A. Banerjee

PowerPoint Presentation: 

Independent professional accountant Auditor They are appointed by shareholders to do audit of co. They give an accurate statement about companies affair, identifying true nature of accounts, unbiased, fair, reliable opinion of the company Related services Accountants working as tax consultants, management consultants, Liquidation and insolvency services, cost accounting consultants,etc.. Facilitator - V. A. Banerjee 7

Rules regulating the professional conduct of accountants: 

Rules regulating the professional conduct of accountants Ethical Audit It measures a business standards and procedures against principles of maximizing owners value Helps in establishing ethical conduct and code of business To improve the quality of governance by evaluation of financial performance Facilitator - V. A. Banerjee 8

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