Beyond Intelligence: the Ups and Downs of the Accountants

In: Business and Management

Submitted By mavismoratilla
Words 18180
Pages 73
Chapter 1

THE PROBLEM AND ITS SETTING

Background of the Study
The business world changes in every tick of the clock. As a result, businesses tend to rise or fall and the stability of the business enterprise is always at stake. But, business sustainability depends on its financial performance and the people governing the business. And to measure whether companies are capable of handling potentially unexpected corporate risks, companies’ accounting transactions are reported through financial statements. These financial statements are the masterpieces of accountants who analyze the transactions and measure the financial stability of the company if they are sustainable enough to defray any business risks. However, in presenting these statements, some accountants may mislead owners or decision makers through financial mistatements which affect the business itself. Because of this accounting malpractice, it may cause to a major problem that will put CPAs into grave misconduct such as allegation of fraud and engangement in corporate accounting scandals. Accounting malpractice are affecting the businesses globally. It decays the economy of the country and slowly creeps into different industry until they are no longer outlive in the business world. In fact, the Report to the Nations on Occupational Fraud and Abuse in Asia-Pacific Region led by Wells (2010) found out that the Asia Pacific median has a loss that was significantly higher than the global median loss of $160,000 because of accounting malpractices. This report also added that 338 fraud cases that has been found on that Asia-pacific region wherein China has the most number of fraud cases and followed by India, Australia, Indonesia and United Arab Emirates. This claim has been confirmed further by Yancey (1996), which she states in her study that during 1987-1993 AICPA Professional Liability…...

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