“objectivity in accounting is a myth” (morgan, 1988) the concepts have certain loopholes that lead to believe that accounting is not objective the materiality concepts states that those figures which are immaterial, that is figures which will not have a great impact in the financial statements, can be ignored and not stated. The monetary unit principle states that only transactions that can be expressed in terms of money can be included in the accounting records for example, human assets cannot be recorded in the accounting records. To be relevant, accounting information must be capable of making a difference in a decision relevance is one of the two fundamental qualities that make accounting information useful for decision - making.
Read this article on questia academic journal article journal of finance, accounting and management accounting for false objectivity. 61 objectivity is the avoidance of all relationships that impair or appear to impair the objectivity of the accountant true false 62 both public accountants and managerial accountants are required to adhere to a code of professional conduct true false 63 the federal reserve board is an example of a consumer group.
Under rule 102 [et section 10201], a member must maintain objectivity and integrity in the performance of a professional service in dealing with his or her employer's external accountant, a member must be candid and not knowingly misrepresent facts or knowingly fail to disclose material facts. In this regard partnoy (2003) argues that the nature and characteristic of manipulation of accounting information is complex and extremely difficult to determine, and jennings (2006) concludes that there is a need for more moral training and leadership to motivate professionals (accountants) to act in the public's best interest, not only for the sake of the profession as a whole but also the well being of the entire economy.
Home » accounting principles » objectivity principle the objectivity principle states that accounting information and financial reporting should be independent and supported with unbiased evidence this means that accounting information must be based on research and facts, not merely a preparer’s opinion.
Whilst objectivity is the aim of those who manage a corporation, there are some who stand to gain from cooperating with management to falsify the accounting system to produce a misleading, distorted, and downright fictional portrayal of a business’s health and prospects. The objectivity principle is the concept that the financial statements of an organization be based on solid evidence the intent behind this principle is to keep the management and the accounting department of an entity from producing financial statements that are slanted by the opinions and biases of the company. How accounting is used by management to compromise objectivity is the subject of this paper keywords: accounting, earnings manipulation, earnings management introduction as one encounters quantum mechanics and real life, one soon realizes that there are shades of grey and moral dilemmas and objects are not always as they may seem.