Accounting

Topics: Sarbanes–Oxley Act, Corporate governance, Enron Pages: 2 (587 words) Published: July 8, 2013
Effect of Unethical Behavior Article Analysis
From Enron to Tyco, accounting scandals have always been a worrisome issue in accounting. Regardless of how many internal controls there are, there will always be a chance for unethical practices in accounting. Where and when do these problems arise? This paper will analyze an article listing situations that lead to those unethical practices and behavior that lawmakers try to prevent.

In his article “What Are the Causes of Ethical Lapses in Accounting,” Jagg Xaxx writes that business owner’s greed can often stir situations that lead to unethical practices and behaviors in accounting. He writes, “Some people enjoy having lots of money and will break the law to get it.” For example, Enron’s CEO had an endless paper trail of unethical practices for personal gains. Fannie Mae, Halliburton, Tyco, like Enron, also acted with unethical behaviors by inflating their income (Wild,J.J.). It is with accounting knowledge that allows companies like those mentioned above to manipulate numbers for personal gain. Xaxx also notes that since white-collar accounting crimes do not directly hurt anyone, companies will more easily break the law to feed their need for more.

According to Xaxx, opportunity is also another reason that unethical practices occur in accounting. Accounting presents the opportunities to break laws that would not happen under normal circumstances. In accounting, sometimes large amounts of money is dealt with that can be manipulated, hid, or siphoned without detection. It is hard to pass up on those types of opportunities even when it means breaking the law.

Ignorance was also another main reason given in the article. While it is no excuse for unethical and law breaking conduct, it is often the cause for many illegal actions. To illustrate, Xaxx assumes that everyone knows not to take a gun and rob a bank. However, the article clarifies that things are not so clear-cut in accounting. Sheer ignorance of...
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