Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Centrality of Ethics An icon reads, Ethics. Accountants play significant roles in the capital marketplace. Illustration 1.3 shows that they are part of every stakeholder
Centrality of Ethics An icon reads, Ethics. Accountants play significant roles in the capital marketplace. Illustration 1.3 shows that they are part of every stakeholder group, including preparers, auditors, regulators, investors, and others. They are therefore central in making the capital marketplace efficient and effective. However, decision-making is a complicated and human process. In accounting, as in other areas of business, ethical dilemmas are common. Some of these dilemmas are simple and easy to resolve. Many, however, are complex, and solutions are not obvious. Management biaseseither internally prompted (by the desire to maximize bonuses, for example) or externally prompted (by the desire to meet analysts' earnings expectations, for example)are the starting point of many ethical dilemmas. These biases sometimes lead to an emphasis on short-term results over long-term results and place accountants (both inside and outside the company) in an environment of conflict and pressure. Basic questions such as "Is this way of communicating financial information transparent?", "Does it provide useful information?", and "What should I do in this circumstance?" cannot always be answered by simply following GAAP or the rules of the profession. Technical competence is not enough when decisions have an ethical side. Doing the right thing and making the right decision are not always easy. What is right is not always evident, and the pressures to "bend the rules," "play the game
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started