Ethics And Financial Reporting Decisions

948 WordsNov 1, 20154 Pages
Abstract. The article reviewed was The Impact of CFOs’ Incentives and Earnings Management Ethics on their Financial Reporting Decisions: The Mediating Role of Moral Disengagement. The key of the abstract is demonstrate how CFO’s personal incentives, interests of stakeholders, and regulatory reforms influence on earnings management ethics (p. 505). The authors focus on the role of CFO’s optional accruals through the presence and absence of incentive conflict. Introduction. The authors studied the earnings management and its manipulation techniques that executives use to obtain preferred financial results. The regulatory changes promoted an aggressive financial reporting. The pressure of mandatory reforms and financial markets affect CFO’s personal financial interests and interest of corporation that the management can manipulate with. The authors investigated the influence of incentive conflict and earnings management ethics on financial reporting (p. 506). The main objective of research is to comprehend the earnings management structure, earnings management ethics, and examine methods to minimize CFO’s harmful effects on earnings. The authors viewed ethics and financial incentives as keys of earnings management. Low ethical standards and personal financial targets increase the issues of CFO’s earnings management behavior (p. 506). Motivations of executives set the ground for ethics. Therefore, researchers considered two problems in the study: CFO’s moral disengagement, and
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