COMM 104 Chapter Notes - Chapter 11: Ethical Movement, Balance Sheet, Internal Control

• School: Queen's University
• Department: Commerce
• Course: COMM 104
• Professor: Sean Field

Document Summary

Corporations must account for their activities all stakeholders have the right to the company"s financial status and how well the company is performing. Stakeholders: current investors and creditors, potential business partners, employees, and the government. Financial statements are the key mechanism for meeting stakeholders" needs for information. Company"s that are publicly traded must issue financial statements on a quarterly and annual basis. Financial statements include: balance sheet, income statement, statement of cash flows, and statement of changes in shareholder equity. Poor quality financial statements are one"s that are inaccurate or misleading due to errors or fraud. Error unintentional misstatement; if found, statement must be reissued with correct information. Fraud an intentional misrepresentation in the financial statements, whether by commission or omission. Ethical concern: unethical behaviour lies somewhere in between error and fraud. Think of the quality of financial statements as being along a continuum from honest and error-free, through various levels of severity of unethical reporting, to blatant fraudulent reporting.