Ethical and Legal ObligationsEthical and legal obligations apply to all members of society. As an individual in society, the obligation to act in an ethical and law-abiding manner on a daily basis is vital to the integrity of daily life. Many professions have their own code of ethics. Financial reporting is not exempt from such ethical and legal standards. A person's vitality depends on the decisions made in business. Business transactions occur daily and can impact a person's economic stability. Trust is placed in the hands of corporate America, and financial reporting requirements to reveal a complete, honest, and legal picture of an entity's accounting practices are important to earning trust. This document will discuss the obligations of legal and ethical standards of practice in the financial spectrum. According to Marshall, McManus, and Viele (2004), accounting is “the process of identifying, measuring, communicating information about a business for the purpose of making informed decisions and judgment” (p.3). Decision makers consider the balance sheet, the income statement, changes in owner's equity, and the cash flow statement as documentation of an entity's viability. Financial statement misrepresentation can call into question the profitability of any company. The need for accountability and regulation of accounting practices is important to maintain trust in the business community. Entities have ethical and legal obligations regarding financial reporting. To ensure that these obligations are met, agencies have been developed to regulate standards of practice ......rtheast Business & Economics Association, p.360-366. Retrieved October 19, 2008, from the EBSCOhost database. (2008). Facts about the FASB. Retrieved October 17, 2008, from http://www.fasb.org/facts/Marshall, D.H., McManus, W.W., & Viele, D.F. (2004). Accounting: What the Numbers Mean (6th ed.). New York: McGraw-Hill. Public Company Accounting Oversight Board. (2008). Our mission. Retrieved October 17, 2008, from http://www.pcaobus.org/index.aspxU.S. Securities and Exchange Commission. (2008). The Investor Defender: How the SEC Protects Investors, Maintains Market Integrity, and Facilitates Capital Formation. Retrieved October 17, 2008, from http://www.sec.gov/about/whatwedo.shtml