The paper 'Corporate Governance and Accounting Ethics' is a wonderful example of a Management Essay. The essay develops an evaluation of the role of corporate governance and accounting ethics in the development of credibility and integrity on organizational financial statements. In this regard, besides noting the rationale and role of corporate governance and ethics application, the essay notes that increased third party participation, staff empowerment, transparency, and accounting efficiency are the key results of corporate governance and ethics in accounting application that in turn promote increased developed statements integrity and credibility.
As such, the essay notes that although different, both corporate governance and ethics should be simultaneously applied to increase statements credibility and stakeholders' trust in organizational financial policies and systems. Introduction Changes in the global market are causing numerous changes in organizational operations and practices. In this regard, one of the key interest issues in global organizations today is the concept of brand reputation and image, which determines the perception the public, has on an organization, consequently implicating its marketing and industry competitiveness. One of the practices connecting organizations and their third party external stakeholders is through accounting and financial statements publishing, where the shareholders, investors, the government, and consumers rely on such information to position organizations in the market.
However, Jorissen and Otley (2010, p. 6) argued that in the recent past, increased fraud on financial statement presentation, such as the case of HIH insurance Company that eventually collapsed to the third party surprise, has reduced confidence and integrity of such statements, causing organizations to publicly apply corporate governance and accounting ethics as integrity boasting initiative (Merkley, Bamber and Christensen, 2013, p. 482).
This essay evaluates the various ways through which the application of both corporate governance and accounting ethics increases organization published financial statements integrity. Third-Party Involvement One of the basic values of corporate governance is the concept of increasing participation in organizational management and the decision-making process. In this regard, the executive organizational management seeks the input and participation of the third parties in their decision making as well as the strategy formulation process. In this context, there is the emergence of change acceptance. With increased consumer groups and shareholders’ representation in the various stages of the financial statement preparation such as profit margins and revenues determination, increases their ownership aspect of the whole accounting process.
Consequently, upon the publishing of the accounts, the stakeholders have confidence in the listed accounts, as they feel like part of the statement preparation process. Bhimani (2008, p. 139) argued that a key role and function of corporate governance is boosting the stakeholders’ confidence in the adopted practices. In this case, once the stakeholders have confidence in the adopted practices and systems governing the organization, such as the staff recruitment process as well as employee reward and promotion policies, there is increased opportunity for trust and confidence establishment.
In this regard, once the external stakeholders establish that the respective organizations have the relevant employee policies such as a clear promotion and reward system, that is not pegged on the executive decision, rather on individual employee performance, is an illustration of accounting staff independence, thus boosting the integrity of the prepared statement (Garcia-sanchez, 2010, p. 318).
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