Unethical accounting methods have affected public confidence only in the company found to have committed accounting violations.

Question

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Unethical accounting methods not only affect the company found to have committed violations but also have a negative impact on public confidence in the entire industry or sector. This is because the public begins to question the integrity and reliability of financial statements presented by other companies within that industry or sector. The Enron scandal is a classic example of how unethical accounting practices by one company impacted the entire energy sector.

Unethical Accounting Methods Have Affected Public Confidence Only in the Company