Ever since the unethical actions of some employees of Enron

Ever since the unethical actions of some employees of Enron Corp. first came to light, ethics in accounting has been in the news with increasing frequency. The unethical actions of the employees essentially involved their selection of certain accounting policies for the company.
In many instances, GAAP does allow firms some flexibility in their choice of legitimate accounting policies. This is true, for example, in choosing an inventory cost formula. However, the company’s choice of policies may ultimately be influenced by several specific factors.
State three of these factors and explain why each of them may influence an accounting policy choice.
Generally Accepted Accounting Principles (GAAP) is the accounting standard adopted by the U.S. Securities and Exchange Commission (SEC). While the SEC previously stated that it intends to move from U.S. GAAP to the International Financial Reporting Standards (IFRS), the...


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