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Personal Ethical Decisions

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According to our online textbook, ethics deals with well-based standards of how people ought to act. It concerns for what is right and what is wrong, which is good and which is bad. Ethics have also addressed questions such as: How should I live my life? What kind of person I should turn out to be? What standards or principles should I live by? In the accounting field, the ethical standards are influenced by the practices of those the people working in this field like state laws, the board of accountancy’s rules and guidelines.
Personal ethics are different for each person. A single decision can be a positive or negative effect on the people around the individual who is making the decision. Most people want to be good or trusted. The decisions …show more content…
Few of The seven signs of Ethical Collapse that the book author Marianne Jennings talked about are: Pressure to maintain numbers, Loyalty to the boss, Weak boards of directors, Conflicts of interest overlooked, Innovation like no other company and Goodness in some areas atones for evil in others. That’s why most companies develop a code of ethics or code of conduct to define the behavior that convey company’s ideals, principles and goals. The employees working for these companies required to adhere to the code and behave that others can expect from them. Because many companies around the world conduct daily activities that require standards of ethical behavior to help dealing with the activities. In 2002, Congress passed the Sarbanes-Oxley Act (SOX) that strengthen corporate governance after the accounting scandals at companies such as Enron and WorldCom. Sox requires the audit committee of the board of directors to be total independent of the company’s management and follows basic principles of responsibility, accountability and transparency. Management should also establish an internal controls that help prevent fraud. The Triangle of fraud is opportunity, rationalization and financial needs. Fraud can be materially falsify, misleading, misappropriations and inadequate disclosures in the financial statements and cause the users’ losses. Management designed internal control to ensure policies are followed, adhered to laws and making ethical decisions in the entity. In 1992, the Committee of Sponsoring Organizations (COSO) of the Treadway Commission established the Internal Control – Integrated Framework that provide reasonable assurance with these objectives: effectiveness and efficiency of operations, reliability of financial reporting and compliance with applicable laws and regulations. Management also needs to enact five components that are related to these objectives are the

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