Since the day we are able to comprehend, our parents have tried to set a good example for us to understand the importance of right and wrong and how to act in many situations. As we get older to attend school, our teachers, family, and friends also influence our daily lives. During our journey to adulthood, we come across everyday challenges of whether to be ethical or unethical in situations we find ourselves in. When entering our career profession, we are taught and trained by the company to understand their ethical codes of conduct, such as in an accounting career. The accounting career has been an increasing and prominent profession that continues to play a valuable role to society. Because accountants serve as financial reporters and mediators, the information they provide requires a high level of ethics in assisting executives, investors, and other businesses in making critical financial decisions. Ethical misconduct by accountants can be damaging to society, resulting in distrust by the public and business operations. However, there are many influences and pressures placed on accountants as well as creditors, stockholders, and other parties affected by financial decisions. For example, in September 2004, Jay Reeves of The Washington Post had written that HealthSouth, “the largest U.S. operator of rehabilitation-hospitals, was under investigation by the Securities and Exchange Commission and the Justice Department for allegedly overstating earnings by $2.5 billion since 1999.” This accounting scandal had put several people in prison for the unethical decisions they decided to participate in. Another example of a major company’s unethical decision making is well known as Enron. According to the University of Washington Mich...
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...lp us determine what is considered to be ethical in various situations. However, in the end, we must evaluate moral issues for ourselves, and taking into consideration both the facts and ethical situations involved.
Works Cited
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Berman, J. (2014, February 5). It's a Fact that Women Get Paid Less Than Men. Stop Debating. The Huffington Post.
History, Concepts, Ethics and Rule-Making in Human Care Regulation. (2009). Retrieved from Univesity of Southern Maine Muskie School of Public Service: http://www.naratraining.org/historycourse/ethics/ethics5.html
Karpoff, J. (2010, April 5). The Decade's Worst Financial Scandals. Seattle, Washington.
Reeves, J. (2004, September 30). Timeline of Accounting Scandal at HealthSouth. The Washington Post.
Ethics in business environment is core values and standards to guide one’s decision-making. (Mintz and Morris, 2008) Maxwell (2003) introduces “Golden Rule” to decide what constitutes to be ethical by asking one “How would I like to be treated in a particular situation?” Hence, unethical behaviours include allegedly inflating earnings to meet stockholders expectation in Healthsouth Scandal in 2003.
Building standards of ethical behavior is essential for public company. Otherwise, it causes accounting scandals and bankrupts. Over the last decade, there were a lot of enormous bankrupts that because of unethical behavior of investors and auditors. Lehman Brothers Holding Inc. is an example of accounting scandals. In this research paper, I am going to analyze this firm.
This week’s case study, Enron: Questionable Accounting Practices Bring New Regulation to the United States, reflects the increased government control regarding accounting and financial issues in corporations. This increased control was implemented due to the downward economic spiral occurring in the late 1990s. Although, Enron had successfully concealed their debt for years, they inevitably collapsed under an avalanche of debt and profit misrepresentation (Ferrell, Hirt, & Ferrell, 2009). Flawed principles and disclosures surfaced within accounting practices. Therefore, the government implemented the Sarbanes-Oxley Act. The Sarbanes-Oxley Act provided oversight to corporate financial reporting protocols, ethical employee standards, and financial
Ethics is practiced every day. Put simply, ethical values form an integrative piece of the professional world. Regardless of profession, it can thus be expected that an opportunity arises in which one must make some sort of ethical deliberation. Despite its ubiquitous nature, ethical issues remain among the most complex and grainy aspects of the professional world. Profound questions are raised and boundaries become more obscure.
In many Universities today it is mandatory to take an ethics class. This is not to provide students with an ethical behavior but to provide education of companies that have found themselves in ethical predicaments and how they dealt with them. One of the most recent ethical issues that have taken place would be the Enron collapse. The Enron Corporation was founded in 1985 out of Houston, Texas and was one of the world 's major electricity, natural gas, communications, and pulp and paper companies that employed over 20,000 employees. With the help from Arthur Andersen the outside accounting firm and Vinson & Elkins Enron’s law firm, these three companies participated in an unethical practice that is still being dealt with today. This paper will
In the recent article of 2016, “What is the Gender Pay Gap and is it Real?”, the authors Elise Gould, Jessica Schieder, and Kathleen Geier give an ample amount of statistics that prove that women are paid less than men; for example, a woman was paid less than a man of the same education, experience, and occupation. In Kevin Miller’s article “The Simple Truth about the Gender Pay Gap,” he states that full-time working women get paid 80 percent of what men are paid (Miller). According to the two articles mentioned above, factors such as age, stereotypes, and ethnicity can be the cause of the gender wage gap. In the 2016 article of “Four Ways the Gender Pay Gap Isn’t All It Seems,” author Simon Maybin claims that the gender wage gap does not exist
As an individual and ambitious accounting student with plans to pursue a career in public accounting, I recognize the importance of understanding my core personal values and behaviors that guide the ethical principles of my everyday actions. I recognize that I have a responsibility to myself, family, future colleagues, future clients, and the general public to follow certain guidelines and conduct myself in an ethical manner. Furthermore, I acknowledge the idea that ethical dilemmas will occur, but I am committed to my “Personal Code of Ethical Values” (as seen above) that represent my desire to live ethically in every facet of my life.
When working within any professional body, an individual will be subjected to circumstances in which personal ethics will come into play. The Accounting profession is no different as ethical questions arise as part of any working day and can effect how an individual or the company conducts business. These questions can vary greatly in practice from selection of new customers to the rates at which those clients are going to be charged. These ethical questions are raised regularly within the workplace and each employee will react to them differently. The varying reactions will depend on the morality of each individual, or each employees own ‘ethics’. As each employee has their own set of values companies must be alert to the fact that some of their employees may have more ‘flexible’ morals than others. This ‘flexible’ morality can lead to corruption and manipulation within the workplace and can give companies serious problems. As a result of this, all of the main professional accounting bodies have begun to re-introduce mandatory courses teaching ethics to their employees. As well as this, ‘A Guide to professional ethics’ was published which contains a number of different principles in order to govern the behaviour of accountants and also to identify and reduce the greatest areas of risk with respect to unethical behaviour.
The Enron scandal is the most significant corporate collapse in the United States in the century. This scandal demonstrates the need for significant reforms in accounting and corporate governance in the United States, as well as for a close look at the ethical quality of the culture of business generally and of business corporations in the United States.
Garrett, T. M., Baillie, H. W., & Garrett, R. M. (2010). Health care ethics: Principles and problems (5thed.). Upper Saddle River, NJ: Prentice Hall.
Ethics is commonly taught in all accounting courses in higher education and continues to be taught by companies when training accountants and auditors. With so many different accounting services now provided by accounting firms they have a duty to have ethical standards. In recent years fraud resulting from accounting
Unethical accounting practices involving Enron date back to 1987. Enron’s use of creative accounting involved moving profits from one period to another to manipulate earnings. Anderson, Enron’s auditor, investigated and reported these unusual transactions to Enron’s audit committee, but failed to discuss the illegality of the acts (Girioux, 2008). Enron decided the act was immaterial and Anderson went along with their decision. At this point, the auditor’s should have reevaluated their risk assessment of Enron’s internal controls in light of how this matter was handled and the risks Enron was willing to take The history of unethical accounting practic...
Almost all professions are demanded by a society to be ethical, especially the accounting profession. The accounting profession was founded on the notion that proper ethical behaviour is the cornerstone of providing professional services to clients. The collapse of Enron, the largest energy-trading company in the US had jolted the profession out of its complacency and serves a warning that all is not well with the profession. Ethics had aroused significant interest amongst practitioners and academics alike. The message is clear that it is under scrutiny, if accountants want to be relevant, they have to be more diligent and ethical. In recent years, there are many financial scandals in some very big corporations in Malaysia. According to the former Malaysian Institute of Accountants (MIA) President, Abdul Rahim Abdul Hamid, the responsibility of any wrongdoing in any company is on the shoulders of the directors, senior management team as well as the auditors, among others (MIA, 2007). As a result, litigations taken against auditors are increasing in number. For example, there are many financial scandals which include Perwaja Steel, Oilcorp Berhad, Transmile Group Berhad, Megan Media Holdings, Southern Bank and Technology Resources Industries Berhad.
Enron was one of the major energy corporation in America before it went bankrupt. A contributing reason to Enron’s failure was a lack of ethical management. Enron scandal proves that the company infringed the transparency, dignity and responsibility ethical principles of the Global Business Standard Codex (Paine et al. 2005). Effective management practices help businesses manage risk by reducing the likelihood of breaching the misconduct, but ethical dilemmas cause illegal or immoral activities.
“Accounting scandals are political and/or business scandals which arise with the disclosure of financial misdeeds by trusted executives of corporations or governments. Such misdeeds typically involve complex methods for misusing or misdirecting funds, overstating revenues, understating expenses, overstating the value of corporate assets or underreporting the existence of liabilities, sometimes with the cooperation of officials in other corporations or affiliates.” This misdeed adversely affects the reputation of the institutions of financial audit, the accounting standards, senior accountants and executives. Because of that the financial and accounting scandals considered of the most serious problems facing communities, because it spreads rapidly and extensively.