Ethics In Financial Accounting Reporting

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Ethics in Financial Accounting Reporting

Ethics in Financial Accounting Reporting

Discuss the importance of ethical considerations in eBay's financial reporting?

EBay's limited operating annals did not supply any promise of proceeded profitability. Even though the business had skilled an exceptional income growth along with an boost in the number of customers, this development was not sustainable and was anticipated to decrease in the future. The history of the business from it's inception to date was not reliable as a device to approximating future growth, earnings or revenues. Moreover, EBay derived its incomes from the transactions recognized during the same period, if a shortfall in transactions were to occur, EBay would not have any other source of income and would not be adept to cover expenses.

·Seasonality: Not only is EBay's enterprise cyclic by nature but it had not been in business long enough to forecast the repercussions of the United States finances on its performance.

·doubt on Future Demand: EBay's enterprise was a new emerging market, which grew fast due to the phenomenon initiated by the web. It was hard to forecast if use grade of the Internet and online services would remain constant.

Whead covering influence does this have on eBay stakeholders? Give at smallest 2 specific examples

After only three years of being in business, Ebay had begun the method for its public stock sale, when the supply valuations were at record levels. Then a fall on the Internet supply Index (ISDEX) and the S&P500 caused numerous businesses to put their publicly traded future on hold. Later, the market started to retrieve at the cost of high volatilities and the inquiry of if to proceed public or not became a large-scale anxiety for Gary Bengier.

Unlike its competitors and the large most of internet companies, Ebay had very good profits and a characteristic form that guaranteed success. Moreover, If the company determined to go for the public proposing the signaling effect would be an benefit; EBay's willingness to go public regardless of the market's instability was a positive signal about how the company seen the strength of its proposing.

EBay's early stage of development

·worldwide expansion: Not only were there a allotment of competitors trying to elaborate but new matters would sway the company such as foreign currency exchange rate fluctuations (revenues would be held in a different currency), tariffs and guidelines among others.

·dangers affiliated with technology: scheme malfunction, technical adversities or service interruptions, need ...
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