Legal, Ethical and Technological Concerns of Accounting and Financial Reporting of Business - Essay Example

Ethical Numerous fraud cases in contemporary society constitute moral and legal issues in the accounting and financial reporting of businesses. The concerns include changes in the manner that fraudsters execute their operations. Consequently, most systems, which support financial reporting, are vulnerable to fraudulent activities. Therefore, it is necessary that the current accounting reporting adopt measures that would reduce immoral practices. Professionals usually create accounting rules because there are several emerging ethical issues in accounting. A need arises for accountants to follow all the ethical rules to minimize abuse in the profession (Albrecht, 2011).

In addition, the issue of creative accounting is a concern to the ethical issues in accounting. This is because some accountants use their knowledge to create false crises in the present world. These crises cause several damages, for example, misleading economic depiction. Consequently, ethical rules demand that businesses communicate about their respective financial positions. This will eliminate unreliable reports through annual accounting reports (Needles & Powers, 2011). The preparation of true reports is also a concern since some current accountants are immoral.

They prepare false reports to the relevant people to benefit. For example, they account for money that was not even spent in their respective firms. Indeed, this allows them to keep the extra funds because no one came to tell unless they are as professional as they are (Albrecht, 2011). Legal Presently, there are numerous legal requirements in accounting and financial reporting. This is because of the universal need to protect both internal and external investors. In addition, several countries ensure that the legislation of their respective countries is against faulty accounting systems.

There are also mandatory laws for all current accountants, which ensure that there are minimal illegal practices. For example, the creation of commissions enables accountants to counter legal issues in accounting (Albrecht, 2011). Other legal issues in the existing society include the emergence of audit firms. These audit firms visit organizations and in turn, inspect their accounting books. This is a new phenomenon in accounting. Consequently, it forces organizations to be honest. This is because audit firms take strict legal action against firms whose accounting books display financial illegalities.

For example, firms that fail to account for funds have to be in court and face respective fines. Finally, current legal concerns in accounting include the establishment of punishments that discourage people from committing accounting fraud (Needles & Powers, 2011). Technological concerns of accounting and financial reporting of business In the accounting and financial reporting of businesses, accounting professionals are vital because they play a significant role in every successful business.