Academic journal article Journal of Accountancy

Corporate Ethics: Doing the Right Thing in the Real World. (FirstLook: Special Advertising Section)

Academic journal article Journal of Accountancy

Corporate Ethics: Doing the Right Thing in the Real World. (FirstLook: Special Advertising Section)

Article excerpt

Financial managers and accountants are today faced with increasing responsibility for compliance with all manner of financial reporting requirements. As the number of financial restatements has grown and questions about management integrity have shaken investor confidence, the roles of financial managers and accountants have taken on both more importance and greater risk.

Investors have come to the realization that financial decision-making is rarely a simple black or white choice; rather, they now understand that the variety of ways in which a complex transaction can be structured may dictate the accounting result. For this reason, many institutional investors are now more concerned with the personal values and integrity of financial managers and accountants than with other, more traditional investment criteria.

At the same time that financial managers and accountants have assumed a more prominent position in the management hierarchy, exposure to liability for financial decision making is at an all-time high. Civil litigation can no longer be counted on as the last word in liability for deficient financial reporting, and the search for more sources of recovery means that financial managers and accountants are more likely than ever to become targets in legal actions, regardless of their culpability. Against this backdrop, financial managers and accountants must maintain and enhance their decision making skills within a values-driven environment or may suffer the consequences of their failure to do so. …

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