...Impact of Unethical Behavior Article Analysis ACC/291 Principles of Accounting II September 18, 2012 Thomas House Impact of Unethical Behavior Article Analysis Reporting financial statements within a business or company is more than a must; it is a necessity to keep ones business up and running. If one were to report false information on any kind of financial statements it then could be costly for the company or business. This is known as unethical behavior in accounting. The unethical behavior in accounting would be to mislead financial analysis for personal gain, misuse of funds, overstating revenue, overstating the value of corporate assets, or even underreporting the existence of liabilities. The purpose of the Sarbanes-Oxley act is to, “Protect investors by improving the accuracy and reliability of corporate disclosures made pursuant to the securities laws, and for other purposes.” ("Sarbanes-Oxley Essential Information", 2003-2012). The Sarbanes-Oxley act was named after senator Paul Sarbanes and Representative Michael Oxley. Sarbanes and Oxley drafted the Sarbanes-Oxley act of 2002; both wanted to make sure that any business or corporation would be held accountable for wrongdoings. Enron would be sure to be held accountable. Enron Corporation Enron Corporation was an American energy company located in Houston, Texas. Enron employed nearly 21,000 people and was one of the world’s leading electricity, natural gas, pulp and paper...
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...Impact of Unethical Behavior The business I decide to analyze is WorldCom. This corporation establish in Mississippi had documented that for some years it’s been ballooning or rising their earnings during booking about $3.8 billion everyday expenditure as long-term savings rather than expenses. They did that by redistribution operating expenses for instance salaries plus wages as long-term savings on the equalize sheet whereas those costs ought to have been posted and expensed to the proceeds statement. When they perform that, they exaggerated assets while enormously minimize expenses. This escort to an exaggeration of net profits; the corporation then cheapen such expenditure which guide cash flows, net income and profit margins to be pretentiously pumped up. Given the information that these are key procedures employed to appreciate the business’s stock, the company’s stock was highly expensive. If I were an accountant at WorldCom, I might have considered such payout as standard operating expense. If I were enforced by management to make a fuss of such unethical behavior, I would see myself obligatory to have told the corporation to the authorities of this serious infringement of accounting ethics, and I would not want to be part of such violations. WorldCom’s reaffirmation of profit had place the corporation in non-payment of bank agreements. Such non-payment resulted in lend being entitle for instant imbursement. WorldCom’s economic tribulations made it unfeasible for...
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...Impact of Unethical Behavior Shavonne Ware February 12, 2012 Acc/291 Mrs. Adkins The Sarbanes-Oxley Act of 2002, also known as SOA, was passed due to the accounting scandals at Enron, WorldCom, Global Crossing, Tyco and Arthur Andersen, that resulted in billions of dollars in corporate and investor losses. These huge losses negatively impacted the financial markets and general investor trust. The Sarbanes-Oxley Act mandates a wide-sweeping accounting framework for all public companies doing business in the US. After so many investor loss their investment the government felt as though they had to do something about the way companies are being ran, this act was solely put together to protect the investor. After this act was passed all public companies will be required (for the first time) to submit an annual assessment of the effectiveness of their internal financial auditing controls to the Securities and Exchange Commission (SEC). Additionally, each company's external auditors are required to audit and report on the internal control reports of management, in addition to the company’s financial statements. The effect this had on financial statement was that everyone had to begin to report a more accurate account of the company earning was for the year. These statements had to go to the federal government and be in compliance with the SOA or the company would have to answer to someone higher than the CEO. I think that this was a good thing because the accountant in the...
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...Impacts of Unethical Behavior I chose to discuss the unethical behavior done by the company Enron. This company made many wrong choices by shredding and hiding the truth of their documents. Which not only affected their employees but put their 89 year old company to a stop. All accountants from this company were charged with altering inaccurate financial information about the companies they were representing. The trouble all started when the managers on Enron chose to provide false income statement figures. This ended up turning into a multi-billion dollar disaster for the company. They made the decision to do this in order to attract new investors. Once they took this step there was no going back. The Arthur Andersen accounting firm was a major contributor in this huge scandal, they led the assistance to the false documentation of Enron. Enron also had other accounts with other companies that they credited to aide in hiding the losses and debts that had been accumulated. All these choices led to the collapse of the company. If I had been an accountant of the company, I would have left to be honest. I would never feel right to scam anyone else, and I believe no other company should even if they are just trying to attract more investors. All accountants were charged in this case, and I do not personally think any company is worth going to jail over because they wanted to scam other companies and make more money. I would have brought it to their attention and if I felt...
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...Impacts of Unethical Behavior Unethical behavior is among us everywhere, and in an accounting career it is somewhat one of the easiest parts of a company or organization that a person can commit fraud. It would be easy for an accountant who controls the books and write the checks to push money around, leave things off the books, and write checks to put money into their own hands. ENRON is a prime example of fraud being committed in a company. They not only caused the company to go bankrupt, but shareholders lost $74 billion, employees lost their jobs and retirement accounts were lost as well. ENRON is energy, commodities and service corporation based out of Houston, Texas. They committed many fraudulent crimes in which one was practically given to them by the government. Most organizations are regulated by the government. Financial regulation is a type of regulation or supervision that holds an organization to certain requirements, restrictions and guidelines which is aimed at maintaining the integrity of the financial system. Its’ objectives are to keep market confidence, financial stability, consumer protection and reduce financial crimes and unethical behavior. However, ENRON filed for deregulation, in which when it was granted, the executives were able to hide and not divulge certain items such as losses, which had investors wanting to invest in that company since it looked to be so profitable. However, this lead to a bigger scandal in which finance...
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...Impact of Unethical behavior Article Analysis The Sarbanes Oxley Act was passed in 2002 as a result of plenty of corporate scandals. The purpose of this act was not only to defend investors and provide them with accurate and reliable information but also make companies and employees behave ethically and with integrity. After the law was passed the financial statement have been impacted and corporate managers are more involved but is the law 100% effective? Many businesses argue that the implementation and ongoing requirements of Sarbanes Oxley Act are costly, time consuming, and as yet ineffective. In many instances law has at best led to a culture of compliance rather than a culture of integrity. Brooke Corporation is one example where these laws have seemingly failed. Brooke Corporation was once one of the largest franchisors of property and casualty insurance in the United States. Its main focus was selling insurance and other products through its franchisee locations. According to Beth Hazel (Journal of Business Case Studies, 2010) the laws as they exist today create a corporate environment focused on compliance instead of integrity. In Brooke Corporation the senior management was in charge to set the example of the organization culture. His main focus was on making money and not, apparently, behaving with integrity. Brooke’s business model required that all insurance companies pay commissions to Brooke directly and not to the agent. Brooke then withheld any expenses...
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...Check point: Impacts of Unethical behavior Earl Walker University of Phoenix 2/19/2014 Axcc/280 Earl Walker 2/19/2014 Checkpoint: 1 The fall of Enron in December 2001 under the leadership of then CEO Kenneth Lay was due to a number of unethical business practices in the corporate world, inflated profits, deceptive ledgers, and illegal partnerships where the charges filed against the this company was showing deceptive practices in accounting as well as in business. Enron corporate culture did little to promote values of respect and integrity. Each division and business was kept separate so that there were few people whom may have had a big picture of the company’s operations. There were compliant board members, and impotent accountant’s auditors and lawyers. Enron in 1997 filed a $586 million dollar reduction after only months after their first quarterly loss there were many highly regarded Wall Street firms that enabled Enron’s fraud as being partners to it. Andrew Fastow , known as LJM2 would take an asset that was doing poorly off the hands of Enron at the end of a quater and sell it back to the company at a profit once the quarter was over and the earning had been booked. The controversy with Enron could have been prevented had each employee performed his or her duties to the expectations of those in their positions and the laws ,rules and regulations of the Internal Revenue Services, and not turn their heads out of fear of job loss If I were employed...
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...The Effects of Unethical Leadership in the Workplace Leadership in Organizations A leader’s actions, ethics, behaviors, and values have a huge impact on those that they lead (Span, 2012). The impact can change the whole culture of the organization. Unethical behavior by a leader in the workplace can lower employee’s performance and productivity, lower a company’s credibility, and the possibility of legal issues ("Effects of Unethical Behavior in the Workplace | Cogentys," 2013). Unethical behavior can lower employee’s performance and productivity. By having an unethical leader, an employee may begin to take their job less serious. A leader should be setting an example for their employees to follow. If an employee sees a lack in effort and values from their leader, they will be more likely to reflect the same behaviors. Employee’s performance is determined by the amount of motivation they have; if they have a leader who does not care, they will not care either. By lowering the performance and productivity of the employees, the company will begin to lose money and cash flow (Zeiger, n.d.). Having an unethical leader can lower a company’s credibility. If consumers hear of things a leader has said or done that they do not ethically agree with, they may refuse to shop or spend money on a specific item or service given by the company. Once the public knows the lack of ethics, the company will lose credibility. Although a company can recover, it is hard to rebuild the relationship...
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...Running head: IMPACT OF UNETHICAL BEHAVIOR Impact of Unethical Behavior Article Analysis IMPACT OF UNETHICAL BEHAVIOR Impact of Unethical Behavoir The impact of unethical behavior in accounting can be tremendous. When people think of unethical behavior in the workplace whether it be accounting or any other division people often think of using the company phone for personal phone calls, or using the work computer to look at something like facebook or even to shop or something along those lines. However, when you think of unethical behavior when it comes to accounting there are so many different things that can occur and so many problems that it can create. You really need to be able to trust the people working in any accounting department and be able to trust them well. A few examples of unethical behavior would be: exaggerating revenue, misuse of funds (allowing them to go one way when in fact they should be going toward something else), misleading financial reports, and the big one that is often publicized when it occurs is inside trading. “Sarbanes-Oxley was precipitated by a slew of corporate scandals, including those at Enron (otc: ENRNQ - news - people ), Arthur Andersen, Tyco (nyse: TYC - news - people ), Global Crossing (otc: GBLXQ - news - people ) and WorldCom (otc: WCOEQ - news - people ). But it was meant to address systemic flaws in the way corporations have been reporting their numbers for decades.” (www.forbes.com) The...
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...much scrutiny over the last few years due to the financial crisis and misuse of organizational funds. The unethical behavior has come into the light due to the demand for government bailout and the outcry of the public for more oversight of funds. Uproar has ensued due to huge bonuses for corporate big shots running floundering companies while their employees are getting laid off and their benefits cut. All of it being plastered across the news making business and ethics anonyms. The following will discuss how personal differences and preferences impact ethics, how organizational policies and procedures impact ethics, and will examine a case study on dealing with ethical dilemmas. Discuss how personal differences and preferences can impact organization ethics. Values and principles strongly influence an individual’s decision making and behavior. Ethics are values and principles that help individuals distinguish right from wrong. A difference in an individual’s values and principles can result in a difference in what an individual considers to be ethical or unethical. The same can be said for an organization. For example, a person may value people more than an organization. Therefore, that person may not consider an action that is hurting the organization but benefiting the people within the organization to be unethical. Some may not consider an action to be unethical unless the action breaks the law. Ethics are based on a set of values and beliefs. Values and beliefs vary...
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...becomes one of the major unethical issues in organizations. Workplace bullying expressed as unethical behavior or unethical business practice in organizations. Bullying in workplace is unhealthy, mistreatment and unfair supervision for one employee, by one or more employees and employers. The unhealthy, mistreatment and unfair supervision is form as violence that prevents somebody or employee to perform in his / her works. This issues being popular and serious problem among researcher. In addition, it will demonstrate negative impact to categories such as individual, team and organizations as well as to country. In this study, the problem of workplace bullying will be explored by using several of review papers / articles. The purpose of the study is to determine the potential factor or causes of workplace bullying on employees. Other than that, this study also wants to explore what is workplace bullying and unethical behavior as well as its consequences or the effect to individual and organization. Furthermore, the relationship or correlations between workplace bullying and unethical behavior will be identify. The review papers / articles taken between year 2010 and 2015. The conclusion and recommendation for this study are provided as purpose to further study and research. Keywords: Workplace Bullying, Unethical Behaviors 1.0 Introduction This study includes two sections which are background of the study that will explain the unethical behavior and workplace bullying. Meanwhile...
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...1. Discuss how personal differences and preference can impact organizational ethics. To discuss how personal differences and preference can impact organizational ethics, one must first define organizational ethics. According to Wikipedia, organizational ethics is defined as “how an organization ethically responds to an internal or external stimulus.” Personal differences and preference of people can create biases and conflict of interest since people have different likes and dislikes as well as different attitudes about culture, morals, and the way an individual carries theirself. If organizational ethics are not clearly defined within an organization, then chaos can occur. Companies need to make sure that there is a set standard of ethics and codes of conduct to assure an organization remains consistent and compliant. For example, preferences of a high-level manager on the gender of the people of whom he/she would like to work with, a specific type of educational background, or a certain income bracket of a person can lead to discrimination and prejudices against employees within that company. Personal differences of one’s culture, race, or even their appearance or characteristics should not come into play when working at a company. Diversity of an organization is vitally important and if someone is bias to a person’s personal difference, then someone can be treated unfairly or overlooked when that said person may have valuable input and resources that could help a...
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...Impact of Unethical Behavior Article ACC 291 Impact of Unethical Behavior Article Potential acts leading to unethical practices and behavioral in accounting is evident. These acts are in violation of the Sarbares Oxley Act of 2002 (SOX). A recent article on the student website is reviewed to identify potential factors leading to unethical practices and behavior. The article analyzed is called “Becoming a More Relational Firm in the Post-Sarbans-Oxley Era”. As expressed by the article, the effects of SOX has been considered by companies in which use auditing services as their main source of business (Jelinek, Jelinek, 2010). SOX has caused agencies to have a strong battle obtaining clientele. The SOX act has changed provisions in which disallow an agency to sale services directly to company personnel (Jelinek, Jelinek, 2010). This has resulted in agencies having to go an outside committee to sale services or products (Jelinek, Jelinek, 2010). The act also requires the auditor agencies to resale from services after 5 years and disallows them to seek employment with a previous client within of a year of last audit (Jelinek, Jelinek, 2010). These new rules have caused the agencies to have very strict rules of operation procedures. With the information obtained in the article, is has been relevant that auditing agencies are having difficulty rendering services. So if auditing agencies are not doing auditing then companies are use internal auditors...
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...Northrise University Caravelle House, Buteko Avenue, Ndola ------------------------------------------------- ASSIGNMENT COVER SHEET Student ID:1200407 | Student Name: Howard Mulamba | Course Code: MGT401 | Course Title: Business and Personal Ethics | Instructor Name: Dr. B. Sichone | Essay/Assignment Title: Unethical Business Practices and Solutions to Unethical Practices | Due Date: | Declaration:I understand that by completing this form I am bound by the following:To the best of my knowledge and belief no part of this assignment for the above subject has been copied from any other student’s work or from any other source except where due acknowledgement is made in the text, or has been written for me by another person except where such collaboration has been authorized by the lecturer concerned. H. MulambaSIGNATURE | Instructor’s Comments: GRADE [ ] | In this assignment we are going to look at the effects of poor ethical standards of an organization in the way it deals with the community of the environment in which it operates. And then suggesting solutions in which to the problems that may arise from poor ethical standards of an organization. According to the Business Dictionary, ethics are the basic concepts and fundamental principles of decent human conduct. Ethics includes the study of universal values as...
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...Effect of Unethical Behavior Article Analysis ACC/291 This paper will analysis different situations that might lead to unethical practices and behavior in accounting. This paper will also examine the effects of the Sarbanes-Oxley Act of 2002 on financial statements. Accounting could be described as a type of instrument or dialectal put in order to provide information with regards to the financial position of an organization or business. This type of information is very important to investors as it gives them important and detailed information that could turn out to be the determining factor as to their decisions to invest or not to invest in a specific organization. Consequently, it is not unusual to find unethical behavior in accounting as unethical practices come in different practices. Different situations that might lead to unethical practices in accounting could include misrepresentative financial analysis in order to obtain personal gains, mismanagement of funds, embellishing revenue, purposely providing wrong information in regards to expenses, embellishing the value of corporate assets, purposely providing wrong information in regards to liabilities, bribery, manipulation of financial markets, and lastly inside trading. According to Osanyin 2008 “Two well-known examples of unethical practices in accounting are those of the 2002 Enron / Andersen and the WorldCom scandal. Both of these companies were involved in unethical accounting practices.” Although Enron...
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