factors behind accounting scandals essay
The accounting entities and accountants on the planet have defined several standards and honest guidelines that really must be and has to be followed by the accountants to ensure that things are not really misrepresented and no wrong data is provided to the shareholders. The accounting information generated by any company is generally used by external entities and stakeholders as well and therefore it is crucial to maintain and specify some requirements and practices that provide the purpose and therefore are in the most of interest of all the stakeholders of any business.
However , despite of the development and establishment of such particular standards and regulations, there are several fraudulent actions that come about and there are several accounting scandals that come in the picture every once in awhile.
There are several factors that lead to such accounting scandals despite of the presence of the ethical guidelines and standards. The scandals happen to be shown to occur because of the underhanded behavior o f the employees and a single major element that may cause the underhanded behavior from the employees is the corporate tradition developed and used in a company.
Every single company retreats into and works on a specific kind of culture as well as the culture should be such that is facilitates the general learning and development of the employees. But at times, due to several gaps in the expectations plus the culture basically defined, the employees start using negative and fraudulent actions, thus bringing about scandals.
Miscommunication can also be a serious reason for the observed scandal in several instances. It is possible that particular guidelines or practices are mis-communicated to the people. At times, it really is that the person responsible for supplying the information yearns for out or perhaps omits some information altogether. And hence, the accounting scams tend to happen not as a result of deliberate effort of several employee or a bunch of staff but mainly because they were unclear of specific practices or standards.
The possible lack of appropriate managing and advice in an business is also an important factor that contributes towards the progress different
accounting scams. Irrespective of the functions and required the employees, the management always needs to keep a check within the things that is happening and maintain a way of helping and handling the employees. In conditions the place that the management fails to do so, there are particular differences that occur in the set guidelines and actual practices, which lead to bogus activities.
As a result, there are several elements that can be responsible for the accounting scandals which may have occurred in yesteryear and will maintain occurring in the accounting world. In addition to these factors, additionally, there are certain individual factors just like lack of professionalism and reliability, lack of understanding, financial profit or gain that can lead to scandals. And hence it is a mandate for every business to develop methods to monitor and avoid such unwanted and undesirable situations.
Reference point:
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