Leaders and financial teams in organizations have an obligation to provide financial reports to meet...

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Leaders and financial teams in organizations have an obligation to provide financial reports to meet the requirements and guidelines provided by a number of regulating bodies. In addition, they must uphold a high level of professional ethical standards when preparing reports that reflect the health of the organization to its stakeholders.  Write 750 words that respond to the following:   	Examine at least 2 ethical issues that managers and financial teams face when preparing financial reports. 	What regulations should be considered when making a decision about each issue? 	Provide an ethical solution for each issue that you introduced. 
	
Document Preview: Scenario:Tony Fortune, a tenured and well-respected turnaround guru, pondered his latest employment offer as he was driving home from an eventful meeting with a number of key Electronic Equipment executives. He had been asked to assume the presidency at a poorly performing company, Electronic Equipment Venture (EEV), which is owned by Electronic Equipment USA. Certainly he could refuse, but Tony flourished on reinventing and remolding underperforming companies. During the last 10 years, he was instrumental in overseeing three successful business turnarounds, four consolidations of business units, and five successful divestitures. This latest endeavor, based on his understanding, would be a challenge because the board of directors was seeking concrete data that would allow a quick resolution to the company’s problems. Electronic Equipment Venture is a producer of electronic equipment dating back to the 1970s. During the company’s first 30 years, it was a pioneer in the development, design, and manufacturing of electronic equipment. The competitive environment changed tremendously in the late 1990s, however, and EEV’s market share eroded from 75% to 25% as other firms recognized this untapped market. Reacting to the loss in market share and unacceptable deterioration in profitability, management attempted to revitalize the company by increasing the level of research and development as well as acquiring two smaller but more sophisticated firms. With the added research and development along with the additional resources, profitability continued to worsen. Faced with slow stock growth at Electronic Equipment USA, primarily because of EEV, the board of directors has been pressed to make a decision regarding EEV. Recognizing that factual data is crucial to the decision process, the board proceeded with authorizing management to employ the appropriate resources needed to conduct the evaluation and valuation of EEV.Accepting this challenge and knowing he has only 5...

Robert · Accepted Answer

Introduction 
Financial Managers and teams are responsible for the formulation of financial reports, 
direct investment activities and implementation of cash management strategies. They are liable 
for implementing long term goals of their organization. These financial managers or accountant 
working in the public or private sector must remain impartial and loyal to ethical guidelines 
while preparing financial reports. An accountant frequently come across ethical issues 
irrespective of the industry and must remain continually cautious to decrease the possibility of 
outside forces manipulating financial records, which could result in ethical and criminal 
violations.  
Ethics implies right conduct. In recent times highly published accounting scandals have 
made it clear that ethical behavior of financial teams has not met the standards formed in this 
regard. To prevent these frauds and other scandals, Sarbanes Oxley Act, 2002 (SOX) was 
enacted which authorized establishment of Public Company Accounting Oversight Board to 
regulate the behavior of accountants and financial teams.  
Ethical Issues faced by Managers / Accountants / Financial Teams 
The two ethical issues that managers and financial teams face when preparing financial 
reports are as follows: 
1. Window Dressing for personal greed 
Greed in business and finance world results in crossing ethical boundaries and steeping 
out safeguards in exchange of making money. It is observed that accountant generally give more 
preference to earning a better living and acquire more possessions as against following ethical 
principles for financial reporting.

Leaders and financial teams in organizations have an obligation to provide financial reports to meet the requirements and guidelines provided by a number of regulating bodies. In addition, they must...

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