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Ethic Management

By | April 2013
Page 1 of 5
Chapter 1 : Ethnics and Business
Case : Aaron Beam and the HealthSouth Fraud
Question 1 :
Which of the “obstacles” to moral behavior do you see at work in Aaron Beam’s behavior and thinking? In Scrushy’s ?

Moral brings the meaning of private conduct based on strict adherence to a sanctioned or accepted code or dogma of what is right or wrong, particularly as proclaimed in a sacred book, or by a non-secular group or sect. Moral behavior is the way of peoples’ acts or conducts oneself based on accepted code or dogma of what is right or wrong, particularly as proclaimed in a sacred book, or by a non-secular group or sect.

Referring to the case, there is few “obstacle” to moral behavior at work in Aaron Beam’s behavior and thinking. Firstly, he failed to notice the future consequences might bring to him and the company when he was pressured and awed by Scrushy and eventually start commit fraud by moved some of the company’s startup cost from the “expenses” column to the “capital investments” column, which enable the company to manipulated and showed the large profit in the financial statement.

To convince himself, he described the move and action to himself as “aggressive accounting” , not “fraudulent” although the action committed include “little “misleading to investors and bounds of accounting rules. Besides, from Aaron Beams’ point of view, his action at least disclosed the information needed and the information was sophisticated enough to investors in understanding the position of the company. However, it is clear that Aaron Beam violate the morality as he was using the loopholes of the General Accounting Standard Principles (GAAP) and tend to manipulate the meaning of “expenses” and “capital investments” in financial statements so that large profit can be showed to current and potential investors. In accounting standards, it defined as misrepresentation.

Second, as the action committed before bring substantial wealthy to himself and to his...
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