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Custom Code of Professional Conduct Essay

According to Epstein and Saafir (2010), financial Accounting Standards Board (FASB) permits the use of Generally Accepted Accounting Principles (GAAP) by accountants. This is done through pronouncements known as Financial Accounting Standards (FASs).

GAAP Application

 GAAP involves rules and regulations in accounting used in preparation and standardization of financial statement reports of a company or government entity. Standardization of the financial statements ensures that the information provided by the accountants is reliable, consistent, and comparable. Thus, GAAP-based income provides useful information to a company’s decision makers who include investors and creditors. This is different from other financial reporting like income tax report whose focus is on social and economic matters.

AICPA Code of Professional Conduct Rule 203 Relation to GAAP

Rule 203 of AICPA code of professional conduct requires preparation of a company’s financial statements with strict adherence to GAAP. However, an accountant has to explain the exceptional circumstances that necessitated the departure from GAAP without which the financial statement would be misleading. If the explanation is not provided, the accountant may lose the license to practice.

Theories like utilitarianism and deontology provide moral principles that enable individuals to make informed decisions. Utilitarianists select actions that would ultimately provide the greatest benefits. This is after taking into account the costs. On the other hand, deontology’s concern is equal treatment of every individual. Therefore, two theories should complement each other when accountants are making decisions.

Code: Sample20

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