Legal, Ethical, and Technological Concerns, Investments
The need for accountability links the accounting and financial reporting of businesses to the law. The main interest of the law in this case is to protect the interests of the public from manipulations of the statements to exploit unsuspecting citizens. In addition, the law creates a platform for the alignment of all reporting processes to be as homogenous as possible (Stice& Stice, 2011). That is to say that in the accounting and financial reporting of businesses, there are often regulations to be followed to create reports that look familiar. These regulations dictate the aspects to be included in the financial reports and the things that are to be excluded. The result is uniformity in the reporting process.
The financial reporting process must also consider taxable elements in the report. For example, the turnover or the gross profit after elimination of the total expenditure are used to calculate the taxes(Stice & Stice, 2011). Therefore, in the event of dishonesty, the reporting system is often used to hide specific figures to reduce the burden of taxes on an organization.
[...] Financial accounting: Tools for commerce decision creation (4th ed.). Hoboken city, NJ: John Wiley. Geera, E., & Hafga, J. (2011). Economic accounting concepts (11th ed.).America: South-Western city Cengage Learning. [...]
[...] The financial reporting process must also consider taxable elements in the report. For example, the turnover or the gross profit after elimination of the total expenditure are used to calculate the taxes(Stice & Stice, 2011). Therefore, in the event of dishonesty, the reporting system is often used to hide specific figures to reduce the burden of taxes on an organization. There are cases where entities use the reporting system to entice investors. For example, in a bid to make a business organization appear more profitable that it actually is, the accounting and financial reporting of businesses uses the net income instead of the figures after all deductions to create an impression of a higher income. [...]
[...] The Legal, Ethical, and Technological Concerns in Investments In the contemporary capitalist systems of government, the public often founds large business entities. The people who fund the large business entities are called investors. The presence of outside financing creates the relevance of accountability in the business organizations, particularly one that are listed in stock exchanges or ones that play an important role in the community. The need for accountability in large business entities creates the need for accountability and raises legal, ethical, and technological concerns in these businesses. [...]
[...] This is to say that all businesses have an ethical obligation to follow the interests of the law in the reporting process(Kimmel & Weygandt, 2007). For example, compliance with the reporting procedures set out by the legislature and the concerned financial regulation units is an important ethical consideration for all businesses. Honesty is also an important ethical concern in the accounting and financial reporting of businesses. There is a tendency for businesses to manipulate the accounting systems to attract investors or to avoid paying taxes. [...]
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