Laws play a powerful role in the prosperous operation of business and society by regulating social conduct that leads to a society that can run freely yet efficiently. Working on the accounting for a medium sized manufacturing company requires a great deal of knowledge of the functions and roles of law In the Industry when Issues of ethics, taxes, and disputes come Into play. The more knowledgeable the accountant, the better prepared they will be when difficult legal situations are at hand. Laws help to supply ethical measures and expectations along with rules of oversight and the appropriate measures needed to impose those rules.When those rules are not followed, laws also have accompanying repercussions to help settle disagreements. Accounting has a great deal to do with ethics, as most of what accounting deals with is in the financial nature. When accounting finds something unethical, it is their duty to call attention to the matter.
Oftentimes the unethical matters deal with fraud that is an illegal act. When fraud is detected, an accountant is to notify their immediate superiors of the Issue and follow it up the chain of nomad to ensure the Issue is resolved.If the fraud Is found to be originating from higher up management, the accountant must seek outside legal advice to perform the steps necessary for perusing a weightlessness case. That Individual Is then protected by the Whistler’s Protection act of 1989, so the company cannot retaliate against them. Understanding this law and following it precisely is the only way the accountant will be protected. If the accountant steps out of line and moves forward without following the necessary steps, the accountant will not be protected by the act.The fraud may still go on to be resolved, and the guilty party punished, however the accountant may lose their Job and could be cited for negligence or breach of confidentiality.
Taxes play a major part in the decision making process of business. When businesses decide to buy and sell, there are always taxes involved so they turn to their accountants for guidance on what will be the best options for their bottom line. When accountants are brought the deferent types of scenarios that the company Is proposing, It Is their Job to determine how these various scenarios will effect the company as a whole.In order to do so, an accountant will look to stare decides in the business environment. “Stare Decides is a deeply rooted concept that applies to all laws” that maintains that the courts will treat each transaction that is similar in interpretation the same manner (Melvin, 2011). The accountant will then take the information they can find on previous transactions that are similar to give their most informed opinion of the scenarios and how they will affect the business.By understanding the laws, the accountant can save the company a lot of money by aging sure they chose the correct decision and not go with the one that looks good on paper. Working in a company that deals with transactions across multiple states also requires knowledge of various laws Including the Supremacy Clause and Preemption.
Each state has Its own set of laws that must be adhered to regarding their Import and export rules and regulations. Sometimes, the laws between states have conflicts that cannot be settled at state level because the conflict Is too great.When this happens, the accountant is stuck at a crossroads of which law is the saws are always supreme to any conflicting state law” (Melvin, 2011).
The Supremacy Clause makes any state law that conflicts with federal law invalid, this power is known as preemption (Melvin, 2011). Because of this, accountants can always look to the constitution and know that following the laws stated there will trump any state law that the companies try to impose. Having this protection can help with many legal issues that arise when disputes over import and export occur.
Laws in business and society are necessary to keep order and maintain social conduct. Accountants especially are affected by laws as they govern the way their Jobs are done in almost every aspect. From the laws of ethics steering accountants toward the correct ways to report fraud, to the ways laws affect taxes and, therefore, the decisions they make, all the way to the laws that help resolve disputes; law effects the functions of accountants and how they help society every day.
References Melvin, S. P. (2011). The legal environment of business: A managerial approach : theory to practice. New York: McGraw-Hill/Larkin.