Ethical Issues In Finance Case Study

Ethics is the study of human behaviour which is right or wrong, i.e., doing right things to others, being honest, being fair and justice to others. Ethics in finance is a compartment to general ethics. In financial system it is all about trust. Innumerable numbers of organisations in India have cheated many highly ethical people who trusted them and their companies. Hard earned money has been put by many people in cash to seek their better living in the post retirement stage. No stringent actions have been taken on them. This is more predominant in India.
Ethical issues in finance are important because they bear on our financial well-being. Ethical misconduct as everyone knows, maybe by individuals acting alone or by financial institutions

They are entitled to use this information for their own benefits. Also, they perform a service to everyone by ensuring that stocks are accurately priced.
Competition between parties with unequal information is regarded widely as unfair because the playing field is tilted in favour of the player with superior information. Market are then characterised by great information asymmetries.
(c) Inefficient Pricing
Fairness in financial markets includes efficient prices that reasonably reflect all available information. In inefficient pricing individual investors are harmed by buying at a higher price or selling at a lower price than at a minimum standard price.
It affects the market by reducing investor’s confidence, which may indirectly depress the stock prices. CREATIVE

VARIOUS METHODS OF CREATIVE ACCOUNTING:
 Companies enjoys the freedom to choose its accounting policy that gives their preferred image is as per the accounting rules provided for companies to choose between different accounting methods. In fact deceptions are all in perfectly good taste. This is legitimate instance of creative accounting.

 Account entries consist of high involvement of unavoidable estimation, prediction or judgment. Since it is made inside the business, creative accountant has the opportunity to error on the side of caution or optimism in the case of estimation and also if an outsider is employed to make the estimates, the creative accountant can also manipulate the valuation both by way of valuer’s briefing & also by choosing valuer known to take pessimistic or optimistic as preferred by the creative