Ethical And Legal Obligations
Recently, professional accountants have been huge pressure changes in the size and financial markets. The main way to communicate the economic impact the organization’s activities and operations of companies outside the financial reporting system. This reporting system with the economic information through various forms such as a prospectus forecasts, annual reports and other financial information. Accounting major source of information is transferred to outsiders.
The reporting process is a way to “strengthen the trust of investors, lenders and other entities with which they deal. The financial reporting process itself is based on trust of its users, and this trust has been threatened due to reports from reliable accounting and misleading “(Whittington, 1999, p. 3). The difficulty of obtaining reliable information may be more evident when “a manager’s compensation is directly related to accounting performance measures. Because these measures are generated within the company, basically the same group of people whose decisions are behind business results, the possibility of manipulation is present “(Weinberg, 2003, p. 5). Financial reports are designed to meet the needs of users, providing information relevant to decision-making rational investment and credit, and other trials reported (Marshall, 2004, p 0.18).
The relationship between the SEC, FASB and the PCAOB
Are accounting manipulation is the Achilles heel of the U.S. company
financial markets? Accounting scandals are nothing new. Episodes of accounting fraud have occurred repeatedly in the history of financial markets in the United States. The SEC, the FASB and the PCAOB have been established to provide forces to the honesty of management.
