BUSINESS

Are stakeholders being intentionally misled by the reporting of business accounts by Corporations?

Are stakeholders being intentionally misled by the reporting of business accounts by corporations?

Introduction

Today it is important to have information which can help stakeholders to critically analyze the financial information of the company; this information can only be transmitted to stake holders with the help of proper accounting structure of a company. Company should reveal their financial position accurately to their stakeholders. Current, Industry standard practice shows that many corporations have cut down the financial information just to make it manageable for external users. No doubt that information, which is excluded or included, is controlled by private bodies and government; however there are many other areas in a business corporation which help companies to misrepresent themselves, recently many financial scandals have taken place which justifies the misrepresentation of companies with the help of unethical accounting practices. I think exclusion of many financial details is required in order to develop understandability and simplicity, using of accounting practices in a wrong manner can result subsequent harm to stake holders and corporate lying. Company, which uses unethical accounting practices for misrepresenting themselves, violates the trust of stake holders.

Stake holder plays many different roles it is defined as the purpose of different cases, such as management, owners, employees, and creditors. Providing accurate information about the company's financial accounts to stakeholders is one of the important and fundamental job of corporation many corporations face challenges in this regard, as a consequence they lack in acquiring the trust of stakeholder. The problem arises when corporation financially misrepresent themselves, without portraying accurate information about the financial position of a company, on the other hand, Corporate lying is an activity used by many corporations for deceiving the stake holders it is the intentional deception of stakeholders. The reason behind corporate lying is to develop an image which favors the company financial position. Several times accurate Information is not provided due to the intentional manipulation of corporate motives, and objectives for external stakeholders.

Discussion

Today every company adopts different corporate culture with different and diverse moral values and ethics. Whereas, accurate information and financial representation, is very important to stakeholders, in this essay, I will analyze the corporate accounting practices used to deceive the stakeholders, and highlight the rising conflict takes place among the corporation and stakeholders. I will analyze that how the corporate culture impacts the level of accounting transparency and misrepresents the financial statements and their stakeholders. (Deanne Julius 1997 pp 450-465)

Primarily all stake holders involved in business have a right to get aware about the financial information of the company as this information affects their directions. It is the core duty of all corporations to provide the concrete financial information to stakeholders. This core duty is based on the ethical framework, and it is supported by the common perception that it is the duty of a corporation to respect their stakeholders by providing them perfect and honest information about the company performance. Although in reality things are different, ...