ACC 300 Unit 1 Discussion

It is always possible for fraudulent activity to take place inside the financial position of a corporation, regardless of whether the fraudulent activity was conducted purposefully or accidentally. Even when the information is provided in accordance with Generally Accepted Accounting Principles (GAAP), there is a possibility that it might still be erroneous. Because of the structure of managerial incentives, corporate misbehavior, and the conflict of interest between the corporate client and independent wrongdoing, financial statement manipulation is a persistent issue in the United States. Because of this, it is possible for the entity in question to perpetrate or try to commit fraud, which would result in the entity's financial condition being misrepresented. According to Kieso, D., Weygandt, J., and Warfield, T. (2019), standard-setters have gravitated toward the practice of crafting extensive regulations that, if technically obeyed in a "checkbox" approach, may insulate auditors and firms from legal culpability (p.14). In the end, this makes it possible for businesses to generate financial statements and corporate structures that comply with GAAP, but also make it possible for them to conceal huge sums of money, debt, and other commitments. Fraud, misrepresentations, and the manipulation of statements are continual problems. It does not matter if the purpose of the deception is to boost the interest of investors, to improve the income of corporate executives, or simply to make the entity of a business appear better than it really is. It makes no difference whether it happened ten years ago or is occurring right now; the fact is that it is still a problem and will continue to be one in the years to come. It is of the utmost importance to make certain that all commercial companies are subjected to stringent oversight, as well as that accounting standards are regularly updated and checked.