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Accounting Ethics When examining the effect of open marketing on the professionofaccounting it is important to view it from three perspectives theclients the professions and societys Additionally two key areasthat are affected by marketing must be addressedthese are concerning competition and ethical implications Marketing inpublic accounting is here to stay therefore making an argument against itsexistence would be fruitless however in order to achieve maximum benefitto the firm the client and s ociety more stringent guidelines must beimplemented at the firm level The first and most obvious of the effected areas iscompetition Within competition several points are discussed First the implicationsadvertising has on public accounting-- the model of perfect competitionversus the model of monopolistic compet ition Secondly the relationshipbetween firm size and advertising expenditures Thirdly the effect ofadvertising on firm specialization the implications of client turnover onpublic accounting practice Before making the comparison a brief explanation whythe twomodels are chosen is in order Monopolistic competition has been chosenfor the pre-advertising era because it most closely resembles the marketstructure in an extreme sense The elements o f monopolistic competitionare as follows product differentiation the presence of large numbers ofsellers and nonprice competition Although accounting services betweenfirms offer very little service differentiation the absence ofadvertising serve s as a replacement because clients are not necessarilyaware that other options are easily attainable The post-advertising erais explained through the model of perfect competition for which thequalifications are as follows very little or no service d ifferentiationmany sellers and price as the only means of distinguishing one firmsservice from anothers In a perfectly competitive market the price of aparticularservice is established solely by the interaction of market demand andsupply Thompson p277 When market demand for accounting servicesincreases the resulting demand shifts right causing pri ces to increasereturning the market back to equilibrium However when supply increasessuch is the theoretical effect of adding advertisement to publicaccounting practice the supply curve shifts right causing prices to fall The model of monopolistic competition
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