Financial Reporting Practices and Ethics

FINANCIAL REPORTING PRACTICES AND ETHICS

HCS/405

July 20, 2015

FINANCIAL REPORTING PRACTICES AND ETHICS

Accounting principles are standards that determine how accountants in the U.S. conduct and format their reports. The Financial Accounting Board set financial and ethical standards for accountants to maintain a positive conduct in their reports. These principals form guidelines to provide a comprehensive framework for classifying, recording, presenting and interpreting financial information. Ethics involve how companies report their financial activities (Small Business, Chron). This paper will provide a summary of the four elements of financial management, generally accepted accounting principles, and general financial ethical standards.

In addition, we will discuss examples from articles that reflect ethical standards of conduct and financial reporting practices.

In order for a company to be ethical in their financial practices and apply the accounting principles, their financial reports must include the four financial statements for audit. A company’s financial statement includes the balance sheet: displaying a relationship between a company's assets and liabilities; The income statement: measuring a company's financial performance; Equity statement: what is the company's equity and if there is any curve or changes in their equity; And finally, the Statement of cash flow, the cash flow statement is concerned with the flow of cash in and out of the business and, as part of the balance sheet, the cash flow statement is useful in determining the short-term viability of a company, particularly its ability to pay bills. It is how a company chooses to report their financial expenditures and revenues that can make a company seem more or less ethical.

In addition, the accepted accounting principles, and general financial ethical standards that are issued and governed by the Financial Accounting Standards Board (FASB) and, the International Accounting...