One. The Nature of Accounting and the Chief Ethical Difficulty: True Disclosure

  1. Ronald Duska1,
  2. Brenda Shay Duska2 and
  3. Julie Ragatz1

Published Online: 20 APR 2011

DOI: 10.1002/9781444395907.ch1

Accounting Ethics, Second Edition

Accounting Ethics, Second Edition

How to Cite

Duska, R., Duska, B. S. and Ragatz, J. (2011) The Nature of Accounting and the Chief Ethical Difficulty: True Disclosure, in Accounting Ethics, Second Edition, Wiley-Blackwell, Oxford, UK. doi: 10.1002/9781444395907.ch1

Author Information

  1. 1

    The Center for Ethics in Financial Services, The American College, USA

  2. 2

    Del Pizzo & Associates, USA

Publication History

  1. Published Online: 20 APR 2011
  2. Published Print: 11 MAR 2011

Book Series:

  1. Foundations of Business Ethics

Book Series Editors:

  1. W. Michael Hoffman and
  2. Robert E. Frederick

ISBN Information

Print ISBN: 9781405196130

Online ISBN: 9781444395907



  • nature of accounting and chief ethical difficulty - a true disclosure;
  • Enron's collapse, as a company in 2001 - taking a $1.01 billion charge related to write-downs of investments;
  • The Wall Street Journal, saying Enron disclosed - that it shrank shareholder equity by $1.2 billion as a result of transactions;
  • Enron/Arthur Andersen collapse in 2001–2002 - a watershed moment in history of accounting, with problems, practices and conflicts;
  • accounting, technique and practice - an art or craft, helping people to monitor their economic transactions;
  • accounting practice, and Financial Accounting Standards Board (FASB) - of the Financial Accounting Foundation, a conceptual framework;
  • income statement, and net income - revenues exceeding expenses, with net loss when expenses exceed revenues;
  • ethics of disclosure, and ethics of truth telling and disclosure - complicated issues;
  • Securities and Exchange Commission (SEC) - overseeing financial statements of corporations;
  • accountant role shift, profession of auditor - to entrepreneurial professions of consultant and planner


This chapter contains sections titled:

  • The Nature of Accounting

  • Ethics of Disclosure

  • The Financial Statement

  • Roles an Accountant can Fulfill

  • Development of Explicit Accounting Standards and Regulations

  • The Sarbanes–Oxley Act (SOX)

  • Recent Scandals that Provoked More Regulation

  • Conclusions