Felicia Lattimore The SOX Act: Unethical Practices and Behavior in Business Accounting LAW/421 – CONTEMPOARY BUSINESS LAW September 6, 2014 Aretha Somerville Introduction Unethical decisions can ruin a business. Dishonest behaviors by accountants, such as falsifying financial statements, over-billing or misleading regulators, can tarnish a company's reputation, causing loss of customers, employees and/or revenue. In some cases, unethical behavior is also illegal and can result
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Introduction Enron was a landmark case that taught the business world more about ethics. The company’s accounting procedures were not effective in keeping the company’s book accurate. By showing a high amount of cash flow and a low amount of debt, Enron looked great to investors, but in all reality the company was in trouble. A great example of Enron’s problematic accounting procedures is in 2000 when the company reported $3 billion in cash flows when it actually had
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PGP/17/248 TABLE OF CONTENTS 1. INTRODUCTION 2. ROLE OF CSOS IN BUSINESS GOVERNMENT INTERFACE 3. LOBBYING - INTRODUCTION 4. ETHICAL IMPLICATIONS OF LOBBYING 5. EXAMPLES OF LOBBYING 6. ACTIONS BEING TAKEN TO CURB THE UNETHICAL ASPECT OF LOBBYING 7. CONCLUSION & RECOMMENDATIONS 1. INTRODUCTION The growth and function of every business is highly dependent on the government. A large number of government actions in addition to laws and regulations affect companies’
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their investments, as well as deter fraudulent behavior. The complexity in the modern business world, and its need for transparency can be evidenced through an examination of 3 levels: company-wide, industry, and globally. Looking on a company-wide basis, a lack of transparency on the part of individual organizations can lead to fraud and unethical practices, whereas a demonstration of strong transparency reduces the impact and likelihood of scandals. Enron, a leading energy and natural gas provider
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relationships, give examples of scandals which led to distrust in management, and subsequent legislation and ethics policies that were created as a result of these scandals. Trust is invaluable in the organizational environment. Organizational behavior professors Steven McShane and Mary Ann Von Glinow define trust as “the positive expectations one person has toward another person in situations involving risk”. In order for an organization to efficiently perform the purpose for which it was created
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Nicholas Barton 00343164 Accounting 2600 Case Study: The Enron Collapse “Why was it that Enron, a financial services company, in effect, could not release a balance sheet with their earnings statement?” -Jim Chanos, President Kynikos Associates. In the film “Enron: The Smartest Guys in The Room,” analyst Jim Chanos asks why, the 7th largest company in the world at the time, could not supply investors with basic financial statements. These statements as we learn in accounting are the fundamental
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receive the $14b expected payment from AC * AA- 2X performance evaluation, relaxed dress code, wooden doors removed * New service- take over entire internal bookkeeping for clients- impaired quality of audits * Enron-1986, wholesale energy trading * Anderson hired Enron in 1990 * Speed up decision making- gave local offices more power, Professional Standards Group dispersed to local offices * Anderson aware of accounting problems but chose to ignore it * Conflict of interest
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current business and regulatory environment is more conducive to ethical behavior: In the past several years, Enron, WorldCom, Tyco, and others have committed financial scandals, which caused the stock market to take a hard hit. Investors and lenders learned from these scandals in the past, and just recently, have become hesitant to invest in any company that they think, or know for a fact, the company is corrupted and/or unethical. “United States regulators and lawmakers were very concerned that the
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The Enron scandal • Enron, the 7th largest U.S. Company in 2001, filed for bankruptcy in December 2001. • Enron investors and retirees were left with worthless stock. • Enron was charged with securities fraud (fraudulent manipulation of publicly reported financial results, lying to SEC…) • Enron was a Houston-based natural gas pipeline company formed by merger in 1985. • By early 2001, Enron had morphed into the 7th largest U.S. Company, and the largest U.S. buyer/seller of natural
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Impact of Unethical Behavior Several key concepts of ethics in accounting and financial decision-making are trust, confidentiality, collaboration, and a code of ethics. Trust and confidentiality go hand-in-hand in business accounting because trust is essential if a company wants loyal customers. Confidentiality is also an integral aspect of financial dealings because privacy is often a concern for many companies and customers. Collaboration is another area of financial decision-making that is relevant
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