Ethical and Legal obligations in financial reporting is extremely important in today's world, fraught as it is with corporate frauds and accounting scams and scandals of every other sort. One Company, the Thornburg Investment Company, has taken a firm stand on financial reporting within its company, wherein all concerned officials are expected to report accurately, any actual, as well as suspected violations and breaches in the laws and rules and regulations of the company, to the appropriate personnel, immediately. (Code of Business Conduct and Ethics) Another Company, the 'Trinity Capital Corporation' stresses the importance of adhering to the rules and regulations created by the Company so that the company's loyalty to its numerous shareholders may be apparent. Where financial reporting is concerned, all the employees of the firm are expected to comply with the generally accepted rules laid down by the accounting principles of the United States of America, so that the assets of the company may be safeguarded adequately. (Business Conduct and Ethics Policy)
The FASB is an association made up of accounting professionals who not only decide on accounting principles, but also maintain them and communicate these 'Generally Accepted Accounting Principles' to the private sector, and are responsible for the maintenance of a standards board that has been created by them for the purpose of accurate financial accounting, and this is the FASB. (Definition of FASB) The FASB was founded more than thirty years ago, and has been an independent and an excellent standard setter for U.S. Accounting, and today, it is being faced with more and more challenges in tackling complex and complicated financial reporting issues, and also in its search for improving the efficiency and the standardization of these reporting issues. The FASB Chairman Robert H. Herz, in the effort to bring together all the various participants of the FASB who have been constantly striving towards better goals, together, invited these various participants to a Forum, to which he invited all the important leaders of the FAF, the SEC, and the PCAOB, all of which are intricately linked together in the total plan. (FASB: 30 years of setting the standard)
The issue that was discussed was the ways in which the FASB, the PCAOB and the SEC would be able to restore the lost confidence of the shareholders of large corporations, and this, he states, would be achieved by coordinating efforts between the three. While the SEC would still be primarily responsible for looking into the private sector and the establishment of financial accounting and reporting standards, the PCOAB, headed by the Chairman William J. McDonough, would continue its overseeing of the accounting profession. However, since the question and the issue of 'breach of trust' has gained so much importance today, he stressed, it is imperative that the PCOAB does its bit in earning back the people's trust in corporations and companies, especially in view of the latest corporate scandals that have been rocking the world. The most important tasks that the PCOAB does, that is, registration, inspection, enforcement, and the setting of standards for the auditors, must not lose its priority and its importance in the face of these scandals, and it is time that the confidence of the people is won back. (FASB: 30 years of setting the standard)
When the AICPA held its Annual National Conference in December 2003, present were the various representatives from the SEC, the PCAOB, the FASB, and the IASB. The topic that was discussed was the fact that the expectations of the general public that the main role that auditors and accountants of any large firm was to 'do the right thing'. This means that although at the present time the auditing and accounting professions are in the midst of a large number for changes, what is important is that the age old traditions of a complete commitment to integrity and honest and ethical behavior and an endeavor to improve the quality of auditing must stay the same as always. The AICPA has passed a number of measures for the prevention and interception of fraud in accounting and financial reporting, and this has led to the formation of the 'Special Committee on Enhanced Business Reporting'. (Current SEC and PCAOB Developments)
In addition, the 'Center for Public Company Audit Firms' will from henceforth concentrate on the development and creation and the management of technical and developmental information on SEC and also PCAOB related activities, in a manner that would benefit all the other member firms. The Center would also provide a platform on which to base discussions of all matters...
Our semester plans gives you unlimited, unrestricted access to our entire library of resources —writing tools, guides, example essays, tutorials, class notes, and more.
Get Started Now