Legal, Ethical and Technological Concerns

Legal, Ethical and Technological Concerns

Falitta Covington

Grand Canyon University

BUS-340

July 19, 2015

This paper will take a look at the legal, ethical and technological concerns of financial reporting. “The purpose of financial reporting is to deliver this information to the lenders and shareowners of your business. If someone else is supporting part of your business, financial reporting must be part of the essential contract between you and them. Your lenders and investors have the right to know if their money is being spent wisely and returning a profit.” (HGExperts, 2015) In today’s business world, it is important to understand the legal, ethical and technological concerns of financial reporting. They can change the public’s view of an organization.

“The accounting profession, which is largely self-regulated, suffered through a series of scandals since the late 1990's. These controversies required the FASB and the SEC, as well as other regulatory organizations, to consider new rules designed to improve financial reporting. Between 1996 and 2002, investors lost an estimated $200 billion in earnings restatements and stock meltdowns following failures in auditing processes.” (HGExpert, 2015) Technology in the 2st century has given a brighter spotlight to accounting practices. The updated technology is in place to ensure that the practices are both legal and ethical. This technology not only helps to keep more accurate financial and accounting records, it protects the company legally. These advancements also protect the interests of shareholders. (Lister , 2003 ).

Financial and accounting reports give a transparent view of the company to the public. This practice builds trust with interested parties and investors. A company that jeopardizes its credibility through illegal activities can ruin its corporate image and reputation forever. The legal, ethical and technological concerns of this reporting are all of great priority to a company’s leaders. The success of the company hinges upon all three.

The information gathered by certain reports is used in all of the company’s decision making. It is vital that this information be reliable. Unreliable information will raise both legal and ethical issues. This could lead to legal actions that tie up the company’s time and resources. Fraudulent reports create legal and ethical concerns. The organization can become scarred in the public eye. Some companies have been saddled with fines or even worse shut down. Accounting executives are some the people central to guiding the financial well being as well as corporate image of the company. “An accountant