"It is unethical for big companies to recognize a large income tax expense on their income statements reported to the public but to pay a small amount to the? government." Do you? agree? Explain.
A. Yes. It is unethical to withhold important information pertaining to a government obligation such as income taxes. Management have an obligation to provide full disclosure of financial information to its shareholders.
B. No. The purposes of tax reports and financial reports to the public differ. Managers must follow the rules for each. In? addition, they have an obligation to shareholders to minimize taxes and to delay them as long as the law allows unless economic considerations indicate otherwise.
C. Yes. It is unethical to minimize an income tax liability or any other financial obligation. Tax reports and financial reports should be presented exactly the same.
D. No. The purposes of tax reports and financial reports to the public differ. Managers must follow the rules for each. In? addition, they have an obligation to shareholders to disclose the amount of income tax that is due.