Review of Accounting Ethics
Review of Accounting Ethics
Establishing principles for ethical behavior frequently starts with a policy on ethics. Businesses acquire a policy on ethics to guide their measures and to set up a general meaning of correct versus incorrect. According to the American Library Association, code of ethics is a handbook for suitable behavior (2012). Given the corporate ethical breaches in recent times, assess whether or not you believe that the current business and regulatory environment is more conducive to ethical behavior. Provide support for your answer Existing businesses and regulatory environment is more conductive behavior because some companies and managers feel as though they can get away with it. The unpredictable increase and collapse of the Enron Company set off a long-burning fire under the American social conscience. From every crevasse and corner, voices rose demanding increased accountability, demanding tighter regulation, and demanding that the unethical be brought to justice.
Clearly, in such estimation, those at fault should have been punished. In order for ethical principles to apply to such industries, it must be shown that they are inherently moral or ethically responsible institutions. Secondly, an adequate discussion of what business ethics is just be provided before we can truly investigate why the situation does not conform to those standards. Third, the role of those same ethical standards must be explained with business content. Fourth, recent societal preventative measures for unethical practice should be examined (SOX). Fifth, and finally, the contribution of philosophical trends and the current phislophical mood of society must be investigated in order to delve into the mindsets of those who perpetrate such acts as society seeks to condemn. at the very beginning it is important to make the following distraction: despite the fact most of society views business as a whole, including executives as inherently dishonest, accountants and business persons are not inherently more likely to choose immorality over ethical behavior than any other segment of society (De Vois, 2002).
Based on your research, describe the organization, the accounting ethical breach and the impact to the organization related to ethical breach. Best Buy Chairman and founder Richard Schulze exited Monday after directors determined he used poor judgment for failing to disclose CEO Brian Dunn’s personal relationship with a young subordinate, a violation of company ethics that led to Dunn’s departure last month. In light of these revelations, Schulze ‘acted inappropriately,’ by failing to bring the matter to the company’s audit committee. While Best Buy made it clear that Dunn did not use the company’s resources to facilitate his relationship with the female employee, the internal probe found that Dunn’s behavior showed ‘extremely poor judgment and a lack of professionalism. Determine how the organizational ethical issue was detected and how management failed to create an ethical environment. In April, Dunn abruptly decided to call it quits as the Richfield, Minnesota-based company further investigated his relationship with the subordinate employee.
The internal probe was initiated by the firm’s audit committee and completed by an outside law firm. Dunn is expected to walk away with a severance package worth up to $6.6 million from the embattled consumer electronics chain. There is still no word on who will succeed him. Schulze said in a statement that when he questioned Dunn about his actions, they were denied and now he accepts the audit committee findings. Analyze the accounts impacted and/or accounting guidelines violated and the resulting impact to the business operation. According to the U.S. Securities and Exchange Commission, within the previous three years, there has numerous businesses and audit organizations that has been held responsible for violation of accounting ethics and other monetary irregularities for rebelliousness of disclosure standards (2012). Richard Schulze, creator and chairman, neglected to take action in a method that was standard with the audit committee’s permission and excellent governance procedures and he produced serious possibilities of employee revenge and corporation liability.
The best news for shareholders is that the board of directors at Best Buy and HP took major steps to look after the shareholders. The board members that observe CEOs make uncertain ethical decisions, should not hang around to decide if there is an accounting violation to make alterations. As a CFO, recommend which measures could have been taken to prevent this ethical breach and how each measure should be implemented in the future. For the worthy of the business, and for the worthy of anyone’s career, it is very significant to stay away from ethical problems and equally, to act morally (Smith, 2003). Mangers and/or supervisors should be a model to the actions they want their employees to obtain.
The company’s staff will observe how the managers perform and they will perform the same exact manner. When corporations create a code of conduct, they need to make sure that they live up to it as well. As a member of staff of any company, CFO choices or events should progress the wellbeing of that business. At particular times, CFO’s could be in a situation where their judgment might influence their own wellbeing as well. On the other hand, to stay away from any form of bad behavior, CFO’s may perhaps reveal the nature of their connection to the corporation.
As a result, ethics play a very important role in each choice an accountant has to obtain as it involves every investor who places their unsighted belief on the accountant to make the right decisions. Principles has to be very clear by hopeful accountants in such a approach that it combines with their ethical growth which will allow them to acquire the most excellent ethical choices in the future. It really comes down to individuals’ ethical responsibility to sustain their own honesty and increase public assurance by illustrating clearness in the shape of the ethical measures being pursued.
Code of Ethics of the American Library Association. (2012). American Library Association. Retrieved November 1, 2012, from http://www.ala.org. De Vous, P. (2002). Recovering the vocation of business. Acton Institute. Retrieved November 1, 2012, from www.acton.org. Smith, Deborah. (2003). 10 Ways Companies Can Avoid Frequent Ethical Pitfalls. American Psychological Association. Retrieved November 1, 2012, from http://www.apa.org. United States Securities and Exchange Commission. (2012). Retrieved November 1, 2012, from http://www.sec.gov.
University/College: University of Chicago
Type of paper: Thesis/Dissertation Chapter
Date: 25 October 2016
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