Essay
Ethics: Socks R Us Limited is a manufacturer of socks for various ranges of customers. Recently the company obtained a business loan from a bank with a condition that the company maintains a certain level of profitability. At the end of financial year, Socks R Us made a $15 million profit. Bob, the company's accountant, decided to report a $20 million profit to comply with the bank's loan requirement. In addition, Bob has changed the depreciation method of some machinery from straight-line to reducing-balance method without disclosing the changes in the notes to the financial statement because the results are similar to the previous method.
Which qualitative characteristics of financial reports in the Conceptual Framework have been violated by Bob's unethical decisions?
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