The first issue worth discussing is the problem of fraudulent reports that continues to persist in the contemporary business environment and organizations. Over the last several decades, a lot of scandals in accounting are related to fraudulent financial reports. The purpose of such reports is to misrepresent the organizational performance and mislead investors in order to obtain more financial support for the upcoming periods (Bradford, 2017).
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On the one hand, this practice is seen as highly unethical and can harm multiple stakeholder groups in case if an organizational financial report disguised or underreported important accounting information (Freedman, 2017). This is the perspective with which I agree because, in my opinion, unethical practices represent the abuse of stakeholders.
On the other hand, this kind of deceit can help organizations experiencing temporary losses to regain confidence and improve their performance due to the financial support provided by the misled investors. This issue is interesting because regardless of its unethical, unlawful, and dangerous nature, it still continues to persist in the modern world of business. This could be the case because, in business, financial profit can often be seen as more valuable than a good reputation or fair attitude.
The second issue is closely connected to the one discussed in the previous section. In particular, the problem is in the pressure created on accountants from the side of their managers for the purpose to disguise certain kinds of financial information in reports (Lister, 2017). In such situations, in a team of accountants some may give in to the pressure, and some may withstand it thus facing a dilemma of covering for the colleagues’ data misrepresentation or reporting the issue.
On the one hand, reporting the problem is the ethically correct choice for an accountant witnessing fraudulent reporting and knowing its causes and the agents who participate in it. This is the point of view that I support regardless of the emotional pressure that is often related to it. On the other hand, whistleblowing and reporting the wrongdoings of colleagues is connected to another ethical problem – the betrayal of friends, peers, and team members and showing disloyalty. This problem is interesting because often it is the emotional maturity and strength of an accountant that driver his or her final decision. Business accounting is accompanied by this type of risk almost in every professional position.
The issue of fraudulent reports is deep and comprised of multiple levels of impact because it tends to affect many different groups of stakeholders. As a result, an issue as broad as this one needs to be discussed and explained thoroughly in order to persuade the accounting professionals as the primary participants to adhere to the code of ethics and provide honest and transparent reports. It is very important to consider strengthening the culture of the modern accountants because it is them who can positively influence the organizational and business cultures and minimize the prevalence of fraudulent financial reporting scandals in the contemporary business environment.
In that way, the audience for this topic includes, first of all, accountants as the people directly responsible for the generation of financial business reports, as well as the addition of misleading data and untruthful information. Convincing more people to adhere to ethical perspective and accepting honesty and fairness as the higher values than financial profit will impact the business environment, in general, creating an atmosphere of trust, transparency, and respect for stakeholders.
Bradford, C. (2017). What is financial statement fraud? Web.
Freedman, J. (2017). What is an “ethical issue” in financial accounting? Web.
Lister, J. (2017). Ethical issues facing the accounting profession. Web.