Question

Explain how alignment to relevant regulations and ethical reporting influenced your accounting practices and notes, providing examples to

support your claims

Answer 1

Accounting methodology should be such that it represents the true and fair state of financial affairs of the company. In this regard compliance to relevant regulations and ethical reporting is very important. One must do what is morally correct. Examples to support these claims are mentioned below:

- Due to change in regulations, electricity was billed to our organization at the commercial rate which was much higher than the industrial rate. However, the bills were not received. To disclose this fact to the investors, a note for the additional liability to be incurred was given.

- The company defaulted in payment to vendors. A late penalty was incurred. This was duly recorded in the book and the variance in expenditure was explained to investors.