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Ethic Of Financial Statement Essay

872 words - 4 pages

The purpose of the financial code of ethics is to encourage honest and ethical behavior and compliance with the law, mostly it is related to the maintenance of the firm's financial book and record also the preparation of its financial statement. The purpose of the code of ethic is to guide the firm in the right way, but not changing the business nature of conduct. As a finance professional of the firm, it must be promote and engage in ethical conduct, including also handling in the ethical of conflicts between personal and professional relationships in interest, and to report to secretary office any information of transaction or any material that might give rise to such a conflict.

Financial professional need to carry out the responsibilities and honest, due care and carefulness, always do the best independent judgment. Besides that, it also assist in the making of accurate, fair, full, understandable and timely disclosure in document and report that the firm and its subsidiaries file. Against the financial code of ethics may also consider as violations of law, which may cause the firm and the owner to criminal or civil penalties.

“The financial statements are management’s responsibility. The auditor’s responsibility is to express an opinion on the financial statements. Management is responsible for adopting sound accounting policies and for establishing and maintaining an internal control structure that will, among other things, record, process, summarize, and report financial data that is consistent with management’s assertions embodied in the financial statements. The internal control structure should include an accounting system to identify, assemble, analyze, classify, record, and report an entity’s transactions and to maintain accountability for the related assets and liabilities. The entity’s transactions and the related assets and liabilities are within the direct knowledge and control of management. The auditor’s knowledge of these matters is limited to that acquired through the audit. Thus, the fair presentation of financial position, results of operations, and cash flows in conformity with generally accepted accounting principles is an implicit and integral part of management’s responsibility. The independent auditor may make suggestions about the form or content of the financial statements or draft them, in whole or in part, based on information from management’s accounting system. However, the auditor’s responsibility for the financial statements he has audited is confined to the expression of his opinion on them” (AICPA Professional Standards, n.d.)

The fraudulent financial reporting includes the misstatements in financial statements that are caused by fraudulent financial reporting, and the reasons for and methods of commit fraud. A...

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