Business Ethics Essay Example | Topics and Well Written Essays - 1500 words - 12

Business Ethics - Essay Example Along with this the management accountants also use the financial statements and the statements like cash flow, fund flow (which are not published in the annual reports) and they formulate a plan about the further steps that should be taken by the management so that the company can use the available resources optimally and can perform better. If the accountants doing fraudulent while preparing the statements then the objective of the company can be hampered. The external stakeholders would fail to take the right decisions and the management accountants can’t plan successfully. So protecting the interest of the stakeholders it is necessary to maintain the accounting ethics properly by the company management. The accounting bodies has prepared some rules, the companies are bound to maintain those rules for protecting the interest of the stakeholders. The paper describes the issue of ethics in accounting; the importance of the ethics rules of AICPA is also discussed. A case study will also be discussed by the researcher for depicting the importance of ethics in accounting. Doing fraud in the financial statements is an intentional activity for making the balance sheet stronger, for showing higher profit of the company in the financial year. For showing higher profit than the actual the accountants shows higher value, higher revenue. Enron, the company in the energy sector started its business in 1985. In the 1990s the company’s growth was fine. The growth of the company made it one of the best companies in the world. In Standard and Poor 500 index the growth of the company was also good. But the lack of transparency was the cause of the downfall of the company. Their business model was complex and they used to do unethical practices. The company used to recognize the revenue even when the deal was signed between the two parties. Government deregulation was also a factor for their downfall. Enron used the Special Purpose Entities for accessing