...Responsibility and Profession Having an unethical Accountant could change the atmosphere of your company a s well as your reputation to the public, one should change accountants immediately if they feel like they do not have an ethical accountant – in the end it will save your company a lot of hardship. “An accountant does your tax return. You complain about the amount of the refund saying that its $2,000 less than you traditionally receive. Without evidence, reason, or ethics, your accountant adjusts the numbers so that you receive the refund you expect. He signs the return. You sign it, and receive your refund. How can this hurt you?” (Amundson, 2011) This can hurt you in a number of ways if your company is audited and this fraudulent activity is shown you can face penalties, fines and an investigation into years before to see if the fraud was prevalent … Furthermore, if the fraud was serious enough in regards to the length and amount you could see prison time. The point is to make sure you have an accountant who will mirror your companies’ mission statement as well as provide an ethical balance to the profession and to your company. “Another example which is extremely common is that you go to one of these neighborhood magicians that prepare your returns without evidence, due diligence, or ethics. Being the unethical practitioner that they are, he does the same thing for the rest of his clients. One of the other clients gets audited and the IRS discovers fraudulent intent...
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...Introduction Accountants have a responsibility to clients, third parties, and to the government. To the clients, accountants have an ethical responsibility to: protect them, provide accurate financial information, represent them with enthusiasm and maintain high ethical standards. Accountants’ responsibilities to third parties consist of the accountant’s duty of care, possessing the necessary skills and acting the good faith. An accountant’s responsibility to the government is to provide accurate information to the public and to the government, they also have the responsibility to follow and obey the laws, regulations, and securities acts. The responsibilities of accountants is tremendous, “The standard of care applicable to the conduct of audits by public accountants is the same as that applied to doctors, lawyers, architects, engineers, and others furnishing skilled services for compensation, and that standard requires reasonable care and competence therein.” (www.USLEAGAL.com). Accountants’ Responsibility to Clients Accountants have certain responsibilities to their clients, some ethical responsibilities are: * Protect our clients. * Produce financial statements and tax returns to the best of our ability after performing a proper due diligence. * Avidly represent our clients with zeal, in the event of audit or other administrative settings, before the Internal Revenue Service, The Illinois Department of Revenue, or other governmental agencies and maintain...
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...belief, accounting is not a “walk-in-the-park” career. Accountants do not sit at a desk one-hundred percent of the time crunching numbers that always add up perfectly. In fact, accounting fraud is one of the largest scandals found today. When an accountant enters an engagement with a client, who are they liable to? Certainly not just to the client, but also anyone who could negatively be affected by a material misstatement, as well as the government. These responsibilities are not easily assumed, nor are they equally distributed. Accountants assume a large responsibility to their clients. They enter a contractual agreement through an engagement letter, and use engagement letters to minimize the risk they assume under the contract. Many engagement letters include memos limiting the recovery. (Reinstein, Lobingier, & Green, 2009) Accountants expressly agree to do a project by a specific date, and imply that the work will be completed carefully. If an accountant breaches the contract, they can be found liable for damages. If it can be found that an accountant did not act with skill and competence, causing harm to their client, negligence can be proved. Accountants also may be found guilty of fraud. Fraud can be proved if an accountant makes a false statement, knowing it is false, and the client relies on the information, resulting in damages. Another liability to the client is the trust clients give their accountants. They are liable to keep the information confidential...
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...Introduction to Accountant Responsibility Essentially, accountants have a responsibility a number of parties, with the major parties in this case being the government, clients and third parties. In today’s capitalist society, the accounting profession is deemed to be a common and important feature. Discussing the responsibilities accountants have to the three parties identified above would, therefore, certainly be a prudent and logical move. Responsibility to Clients To begin with, accountants have a responsibility to keep client information confidential. If an accountant discloses confidential client information to a third party, such an accountant would be deemed to have violated Rule 301. The said rule, in simple terms, states that “a member CPA shall not disclose any confidential information without the specific consent of the client” (Perkins, 2004). In that regard, therefore, an accountant must obtain the consent of the client before disclosing information which could be regarded confidential. The said consent could be in writing. It should, however, be noted that an accountant cannot be deemed to have violated Rule 301 if the information disclosed already happens to be in the public domain. Similarly, an accountant cannot be held liable for the violation of client confidentiality if disclosures of client information are made pursuant to proceedings of a legal nature. Yet another critical responsibility of accountants to their clients has got to do with exercise...
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...Code of Regulations, Title 16, Division 1, § 58 | failure to perform audit | Revocation of CPA Certificate | No.AC-2007-20 | Baisden, Lowell A. | 1/8/2008 | Business and Professions Code, Division 3, Chapter 1, §§ 5100 (c), (i) and (j), and 5062. California Code of Regulations, Title 16, Division 1, § 58. | provide false tax advice | Revocation of CPA Certificate | No.AC-2006-13 | Baka, John Edward | 10/20/2006 | Business and Professions Code, Division 3, Chapter 1, § 5100 (c). | participated in the audit under the supervision of George Alan Fisher | Revocation of CPA Certificate | No. AC-2007-18 | Adamic, Jonathan Ernest | 6/17/2007 | Business and Professions Code, Division 3, Chapter 1, § 5100 (h). | failure to practice as an accountant | Revocation of CPA Certificate | No. AC-2009-3 | Affonso, Dale Albert | 10/26/2008 | Business and Professions Code, Division 3, Chapter 1, § 5100 (c) and (g). | implement fraudulent tax shelters | Surrender of CPA certificate | NO. AC-94-14 | Alas, Benigno Bercasio J. | 10/29/1997 | Business and Professions Code, Division 3, Chapter 1, §§ 5062, 5100(c) and (f). California Code of Regulations, Title 16, Division 1, § 58. | failed to obey all Federal, state, and local laws, and to timely file quarterly reports | Revocation of CPA Certificate | No. AC-2014-15 | Arding III, Arthur James | 7/5/2014 | Business and Professions Code, Division 3, Chapter 1, §§ 5062, 5097 (a), (b), (c) and 5100 (c). California Code of Regulations,...
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...organizations, such as the American Institute of Certified Public Accountants (AICPA), the Institute of Internal Auditors (IIA) or the Institute of Management Accountants (IMA), one is agreeing to adopt the ethical code. This professional code is a positive set of statements and guidelines for CPAs with explicit rules as to what accountants should or shouldn’t do. It applies to all members, whether it is public practice, industry, government or education. There are many reasons why one would want the accountant representing them to adhere to a specific rules and regulations. From an investor’s point of view, one would want an accountant that is going to have their best interests in mind, but to also be morally and ethically bound to perform within legal confines. Sometimes actions may be considered within acceptable limits of the law, but not ethically suitable; in such instances, the code of ethical conduct is even more important. Investors want insurance that the corporation with which they are financially backing is transparent. Transparency, which from an accounting/corporate standpoint, is the free flow of information within an organization and between the organization and its many stakeholders. This transparency and accountability improves the credibility and the relationship between the corporations and the stakeholders. Accountants and those in the accounting profession have many laws and regulations by which they must abide in handling others’ financial interests...
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...find it hard to believe that unethical behavior is being committed, especially in an organization that is well known in the community. There are several reasons that can encourage unethical accounting practices or behavior in organizations, but the most common reason would most likely be money. Accountants are paid professionals that work for an organization or is hired outside the business to perform services such as: audit and assurance, consulting, deals, financial advising, tax accounting services, and so much more. These services are imperative for an organization to maintain good business accounting and good strategic planning of the business finances. Since individuals in the accounting profession have such a considerable amount of responsibility to companies and to the public, there has to be a level of confidence in the knowledge and the behavior of accountants. However, there are times when unethical behavior and practices are displayed in the accounting profession, particularly when the bookkeeper is working in favor of the business. This can promote fraudulent activities within the business that can result in the company losing finances, facing legal responsibility, possibly losing the confidence of the public, investors, and stakeholders....
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...Reporting revenue correctly and honestly is management and owners responsibility. Abuse of the system and fraud committed by dishonest practices the government has set up standards of reporting income and expenses. The function of the generally accepted accounting principle is that all companies report revenue using the same methods. Using the four elements of financial management, planning, controlling, organizing, and decision making, businesses can be successful. Using ethical standards of honesty, an organization can expect to remain in business. Generally accepted accounting principles (GAAP) is the standard that determines how accountants conduct reports (Kennan, 2014). The function of the GAAP is to ensure that companies have the same methods of reporting financial information. The GAAP applies to all financial statements issued to the public for investors to understand how the company is reporting income and expenses (Kennan, 2014). The financial accounting standard boards (FASB) created the GAAP that define the ethical standard practices of companies (Reeves, 2014). Maintaining high ethical standards accountants must maintain confidentiality when reporting financial reports. Accountants must enter accurate data, and validate amounts entered into financial transactions. Accountants must have backup documents to support any correction made. Use internal controls in each department to ensure competency of the accountant. Accounting clerks should be separated from the payable clerks...
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...component every profession must possess in order to garner satisfaction and commitment from clients and customers is trust. Trust cannot be gained quickly; it is developed over time through interactions, observations, and an understanding of another’s beliefs and values (Mayer, Davis, Schoorman, 1995). However, a person’s stated beliefs do not often dictate their behavior. In pursuit of professional goals, individuals often set aside what they know to be right and act in a manner that benefits them either financially, with recognition, or in some other manner (Six & Sorge, 2008). Over the past decade, the accounting profession has seen an erosion of public trust. Numerous financial scandals have brought heavy regulation and burdensome laws to which companies and accountants must comply, these scandals have done much to damage the superior reputation the profession once enjoyed and has also led to the demise of the world’s largest accounting firm...
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...oversee the accounting and financial reporting processes of the Corporation and the audits of the financial statements of the Corporation, to assist the Board of Directors in fulfilling its oversight responsibilities regarding finance, accounting, tax and legal compliance, and to evaluate merger and acquisition transactions and investment transactions proposed by the Corporation’s management. Consistent with this function, the Committee endeavors to encourage continuous improvement of, and foster adherence to, the Corporation’s policies, procedures and practices at all levels. The Committee’s primary duties and responsibilities are to: • • • • • • Serve as an independent and objective party to monitor the Corporation’s financial reporting process and internal control system. Review and appraise the audit efforts of the Corporation’s independent accountants and internal audit department. Evaluate the Corporation's quarterly financial performance as well as its compliance with laws and regulations. Oversee management's establishment and enforcement of financial policies and business practices that are designed to manage business and financial risk and to comply with significant legal, regulatory and ethical requirements. Provide an open avenue of communication among the independent accountants, financial and senior management, counsel, the internal audit department, and the Board of Directors. Review and, in its discretion, approve merger and acquisition and investment transactions proposed...
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...the ethical to prevent accounting scandals. And they should not be focused on the teaching of accounting techniques. Neoliberal ideology is a political movement beginning in the 1960s that blends traditional liberal concerns for social justice with an emphasis on economic growth. And it is similar to globalization. Globalization includes three elements that are difficult decreasing, quick response to alterations, and multilateral trade liberalization. And accounting professional contains individual professional judgment and professional self-regulation. Globalisation brings many benefits but also a number of problems, for instance, low price labour used by multinationals that Increasing wages for highly-skilled workers and reducing wages for less-skilled workers obviously leads to greater inequality. Neoliberalism has also been unable to address growing levels of global inequality. In order to better focus on ethical education, accountants should consider ethical issues in various directions. And they should understand the requirements of students’ future employer, and how to guide students into a true ethical notion. Introduction With the development of society in the...
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...components, both good and bad, used by LJB Company to help determine the company’s readiness to go public. Upon assessing all of the components and regulations currently utilized by LJB Company, I will also make recommendations for the improvement and future success of this company moving into the public market. In order to properly perform an assessment of the LBJ Company, there first had to be some set of standards or regulations that outline the internal controls and proper procedures for companies and businesses to adhere to for financial reporting. As it turns out internal control is a key component of Foreign Corrupt Practices Act(FCPA) of 1977 and the Sarbanes-Oxley Act(SOX) of 2002 which required companies to follow this set of internal controls. This list of internal controls is as follows: 1). Conduct its business in an orderly and efficient manner, 2). Safeguard its assets and resources, 3). Deter and defect errors, theft, and fraud, 4). Ensure accuracy and completeness of accounting data, 5). Produce reliable and timely financial and management information, 6). Ensure adherence to its policies and plans.(O’Malley) From this point on all senior management officials will be held responsible for enforcing and ensuring that their company follows these regulations and...
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... 24 - 25 Environmental Management Accounting (EMA) versus Environmental Financial Accounting (EFA): If so, what is the significance of knowing the better accounting method to use when identifying environmental cost? It has become indispensable for companies to increase their responsibility regarding all facets of the environment and to acclimatize existing practices to cause limited environmental impairment; more especially at this present time when stakeholders linger ‘bitterly’ about how corporate failure have influence organization’s environmental performance and measurement issues. Yoking this emergent obligation within the corporate sector is consequently a strategic component in any strategy for accomplishing the goal of sustainable development; and evaluating the viability of such a strategy requires both the resolution of scientific and manufacturing problems; and also the attention of how organization’s account for environmental cost to demonstrate their corporate social responsibilities. The Environmental Management Accounting (EMA) and the Environmental Financial Accounting (EFA) are the two mainstream accounting approaches that have allowed an upsurge in the demand for relevant information to augment...
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...Company has engaged RR Accounting Firm to evaluate their current system of internal controls as LJB Company is planning to go public. Public companies have additional responsibility to shareholders and investors and must ensure integrity over their financial statements by maintaining a strong and effective internal control environment. The purpose of this report is to provide an objective analysis of the control environment of LBJ Company. This report will discuss importance of internal controls and identify both the current strengths and the current weaknesses in LJB Company's control environment within the following sections: 1. Compliance with Federal Regulations on Internal Controls for Public Companies. 2. Importance of Internal Controls. 3. Assessment of Internal Control Environment at LBJ Company. (a) Governance - Tone at the top (b) Segregation of Duties (c) Documentation Procedures (d) Physical Security (e) Human Resources 1. Compliance with Federal Regulations on Internal Controls for Public Companies As LJB Company is considered to be a small organization, going from private owned to public traded will require extensive planning. During planning, LJB must consider the current system of internal controls and the cost versus benefit of becoming compliant with regulations such as the Sarbanes-Oxley Act of 2002 (SOX). Under SOX, all publically traded U.S. companies are required to maintain an adequate system of internal controls. Corporate...
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... Management should certify the accuracy and fairness of presentation of their financial statements. Independent auditor(s) outside of LJB will need to attest to management’s assessment of said internal controls. Additionally, non-audit services between these two parties (LJB and said independent auditor) are prohibited. * There are a few internal control measures that LJB already has in effect and are better for it: the use of pre-numbered invoices by the accountant and your (the President’s) involvement in the approval and hiring process of new employees. I also recommend the purchase of the indelible ink machine as per the accountant’s request. As this applies to the Internal Control Principle of Physical Control, future check fraud will be more difficult to be accomplished. * There are several internal control weaknesses that I assess LJB currently has. Following each weakness I list below is a recommendation from myself to rectify these internal control weaknesses. * One is risk is the accountant who serves as Treasurer and...
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