Response to Coments on DQ1 Hunt and DQ2 Smith - Essay Example

DQ1 I agree with you that uniformity is needed in accounting. The utilization of GAAP provides a tremendous financial framework for accountants in the US to follow. There are always some rotten tomatoes in every crop and the Enron case is an example of unethical accounting behavior. In the aftermath of the Enron case in United States the investment community doubted the credibility of financial information. It is extremely important for users of financial information to trust the work being submitted to them by accountants.

Ethical standards are very important in the accounting profession. The majority of accountants have a very high sense of moral and ethical standards. “Ethics in accounting is of the utmost importance to the accounting professional and those who rely on their services (Enotes, 2011). The academic community should stress more the importance of ethics in business. All courses should teach applications of business ethics in relation to the material being taught. DQ2 In your response you mentioned that investors use financial information to make decisions whether to buy or sell stocks.

Common stocks are a very common type of investment, but there are other financial instruments that are traded on the open marketplace. In the money market corporate bonds are often sold by corporations in order to raise money. There are other instruments such as mutual funds which reduce the overall risk associated with the investment. It is true that both investors and creditors need financial information, but I believe that this information is more important for lenders than for investors. Lenders deal with billions of dollars in debt.

In the recent global financial crisis we saw how volatile the financial system can be. The banks in the United States received the largest governmental bailout in the United States history. On October 2008 the US Senate passed a $700 billion bank bailout package (Amadeo, 2011). References Amadeo, K. (2011). What Exactly was the Bank Bailout Bill? Retrieved April 5, 2011 from http://useconomy.about.com/od/criticalssues/a/govt_bailout.htm Enotes.com (2011). Ethics in Accounting. Retrieved April 5, 2011 from http://www.enotes.com/business-finance-encyclopedia/ethics-accounting