The purpose of financial reporting is to provide valuable information that benefits economic decisions (Financial Accounting Standards Board, 2008). Knowledge reflects the financial impact of transactions to manage a capitalist system. A company will benchmark the statement to determine long-term economic growth opportunities (Association of Chartered Certified Accountants, 2013). The report will include specific details to uncover ethical issues that affect the balance of accounting policies for presentation and disclosure of information for public use. Venture capital firms rely on mandatory financial statement disclosure specified in Generally Accepted Accounting Principles (GAAP) and the International Financial Reporting System (IFRS) (Gibson, 2013). The main objective is to gain knowledge to create sound judgment and ensure harmony, as accurate financial statements create effective communication across borders. EthicsVarious organizations maintain a stable financial position to obtain short-term investments . According to Investopedia (2014), profit comes from excess stocks and bonds, which pay high dividends instead of a standard interest-bearing account. “The Dangerous Morality of Earnings Management” illustrates the direction of ethical behavior of business managers to influence financial statements for the benefit of managers or the organization (Bruns and Merchant, 1990, pp.1). The participants' belief is to bend the rules of business methods, namely bookkeeping, cost deferral and budgets, to change short-term revenue. The individual neglects to extend credit and labor hours to increase deliveries or sell assets to maintain profit (Gibson, 2013). The intention is......middle of document......ement Accounting, 72(2), 22. Retrieved from http://search.proquest.com/docview/229746269?accountid=38569Federwisch, A (2014). Ethical issues in the financial services industry. Retrieved from http://www.scu.edu/ethics/practicing/focusareas/business/financial-services.htmlFinancial Accounting Standards Board. (2008). Statement of Financial Accounting Concepts #1 Objectives of Corporate Financial Reporting. Retrieved from http://www.fasb.org/cs/BlobServer?blobcol=urldata&blobtable=MungoBlobs&blobkey=id&blobwhere=1175820899258&blobheader=application/pdfGibson, CH (2013). Financial Reporting and Analysis: Using Financial Accounting Information (13th ed.). Mason, OH: Southwest Cengage Learning. ISBN 13: 9781133188797Short-term investments. (2014). In Investopedia. Retrieved from http://www.investopedia.com/terms/s/shorterminvestments.asp