Accounting Quality (Other (Not Listed) Sample)

Accounting
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Introduction
Ethics can be defined as the decent principle that regulates an individual’s manners or else how an activity is carried out. Therefore, ethics is a group of norms or else standards of moral conduct which controls the behavior of persons as well as organizations. By using the ethical morals, an individual or else, a set of characters as well as a group control their conduct to differentiate between what is correct and what is incorrect as professed by other individuals. Considering business environment, business ethics can refers to a code of conduct, that is, a group of values as well as beliefs which are taken into consideration to be binding on any individual who have membership of a particular group that business persons are anticipated to monitor while dealing with other individuals. (Van Beek, 2004)
Roles played by board of directors and the chief executive officers
The board of trustees has the critical responsibility for their company emerging successful or else failing, and also for actions ethics. Considering any public firm, the ethical tendency of the organization is put at the top; hence actions as well as viewpoints of the board significantly affect the moral atmosphere of the organization. All directors on a public company’s board undertake legal duty for the company’s resources as well as decisions. The members of this board have a fiduciary responsibility, that is, a status of trust as well as confidence. Because of globalization, the role played by media, nature being revolutionized by technology in addition to the speed of communication, the directors do feel superior burdens for accountability as well as transparency. Such roles require an ethical decision construction in addition to providing an ethical decision construction framework. Other functions include;
Ensuring that the public accounting firms preparing audit reports for the company is a registered one;
Institute alongside adopt auditing, quality control, ethics conducts as well as other standards involving the preparation of audit reports for the firm;
They should carry out the inspections of registered public accounting companies in line with the rules of the board;
They are carrying out-out investigations as well as disciplinary process on any unethical practice by the company’s accountants;
They both have to set the budget as well as manage the tasks of company’s staffs across departments (Sarbanes-Oxley Act of 2002). For example, a New Companies Bill, 2012 set Code for Independent Directors that carry out duty on board of directors to report anxieties about unethical conduct, real or else alleged fraud or else defilement of the firm’s ethics policy.
Ethical strategy for high-quality accounting
The CEO of any company is normally appointed by the board created on the principle of his ability in addition to his skills to manage the firm efficiently. His chief tasks include coming up with as well as executing high-level strategies, formulating principal company decisions, handling the entire operations of the company in addition to resources of a firm. He also acts as the primary path of communication between boards of directors as well as the company operations; thus he takes part in every aspect of the firm’s performance. The most significant skill that a Chief Executive Officer must possess is strategic thinking. Through this, he will be able to implement the ethical environment requirement within the company thus achieving high-quality accounting as well as reporting. He will be able to achieve this through the following;
Expanding execution of the plan of action to take care of the competition as well as considering the long-term objectives of the corporation.
Providing satisfactory control systems throughout the company’s departments.
By observing the operating as well as financial results against the entire plan set.
By applying remedial action always in his decisions pertaining to the company’s ethical issues as well as financial reports.
It is therefore important to add a clarification to the annual report affirming the firm’s strategy for coming up with long-term value that is a business model which would improve the capacity of investors as well as other users of the report to evaluate the revelations required under the corporate evaluation (Arjoon, 2003).
Corporate management assurance to the investors
Corporate management can provide assurances to investors through one to one meetings. The meetings between firm investors as well as the company management are tremendously vital as a way of communication between the two groups. Through this, the investors will be able to look into detail the company’s financial report as well as its performance within a set period. The corporate management has a chance to discuss with these investors the company’s forecasted as well the ways to realize them. This is an efficient way because the investors will have first-hand details from the managers of the enterprise. Company managers should endlessly seek to advance in their environmental routine by embracing cleaner operation methods, promoting efficient financial monitoring as well as adopting environmental and user-friendly technologies in the firm’s structure (Wasden, 2007).
Consequences of public company on weak financial quality monitoring include;
Loosing of investors- most of the potential investors would like to invest in the firms that consider transparency as well as accountability as their main objectives. This is because they expect the high rate of return on the investment they participate into, and if there are problems in financial accountability, they will not invest in such company.
Little shareholders’ trust- shareholders are the most important persons in any business and earning their trust is the chief function of the board of directors. That confidence goes hand in hand with the financial management of the company. As long as there is fund mismanagement, they will be worried about the faith of their shares in such firm.
Bad public image- the public company going through financial unaccountability will spoil its public image. This means that the public who are the owner of such company will lose confidence in such company thus leading to firm’s failure. This is because the public company depends on citizens its management process...