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The accounting entities and accounting professionals of the world have specified several requirements and ethical guidelines that need to be and should be followed by the accounting professionals so that things are not misrepresented and no wrong info is provided to the investors. The accounting info produced by any business is normally used by external entities and stakeholders too and thus it is crucial to maintain and define some standards and practices that serve the purpose and are in the very best of interest of all the stakeholders of any company.
However, despite of the development and facility of such particular standards and guidelines, there are numerous deceitful activities that occur and there are several accounting scandals that enter the image from time to time.
There are several factors that lead to such accounting scandals despite of the existence of the ethical standards and requirements. The scandals are revealed to occur due to the fact that of the unethical behavior o f the employees and one major element that may result in the unethical behavior of the staff members is the corporate culture developed and utilized in a company.
Every business embraces and deals with a particular type of culture and the culture must constantly be such that is assists in the total knowing and development of the staff members. But sometimes, due to some spaces in the expectations and the culture in fact specified, the workers start embracing unfavorable and deceitful measures, thus leading to scandals.
Miscommunication can also be a significant factor for the observed scandal in a number of cases.
It is possible that specific guidelines or practices are mis-communicated to individuals. At times, it happens to be that the individual accountable for providing the details misses out on out or leaves out some information entirely. And for this reason, the accounting scandals tend to take place not since of the purposeful effort of some worker or a lot of employees but primarily because they were not clear of specific practices or requirements.
The lack of appropriate management and guidance in an organization is also an important factor that contributes towards the development of different
accounting scandals. Irrespective of the roles and responsibilities of the employees, the management always needs to keep a check on the things that is happening and maintain a way of guiding and managing the employees. In conditions where the management fails to do so, there are certain differences that occur in the set guidelines and actual practices, which lead to fraudulent activities.
Thus, there are several factors that can be responsible for the accounting scandals that have occurred in the past and will keep occurring in the accounting world. In addition to these factors, there are also certain individual factors such as lack of professionalism, lack of knowledge, financial benefit or gain that can lead to scandals. And hence it is a mandate for every company to develop ways to monitor and avoid such unwanted and undesired situations.
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