A certain contingent liability was evaluated at year-end,and considered to have a reasonable possibility of becoming an actual liability.If the accountant decided NOT to report it on the balance sheet or in the notes to the financial statement,this could be considered unethical behaviour.

Question

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Failing to disclose a contingent liability with a reasonable possibility of becoming an actual liability in the financial statements is a violation of generally accepted accounting principles and can be considered unethical behavior. The accountant has a responsibility to provide full disclosure of all material information to stakeholders, and withholding information about potential liabilities could mislead users of the financial statements.

A Certain Contingent Liability Was Evaluated at Year-End,and Considered to Have