Ethics and Compliance

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Ethics and Compliance
Fabian Marrero, Kevin Martinez
FIN/370
March 9, 2013
Norberto Molina Perez

Ethics and Compliance
In this paper we will as a team: Assess the role of ethics and compliance in your organization’s financial environment. Describe procedures your organization has in place to ensure ethical behavior. Explain how financial markets work in the United States. Identify processes the organization uses to comply with SEC regulations. Evaluate your organization’s financial performance during the past 2 years, using financial ratios. Calculate the ratios for each year: Current, Debt, Return on equity Discuss the trend for each ratio and what it tells you about the organization’s financial health.

The business code and ethics code at the company Lowe’s stores begins with the board of director’s right through to the newest of workers. The requirement to read and follow the code of conduct is vital for all who are associated or represented by the company. Compliance with governmental regulations involving ethics is valued by Lowe’s and held strong. The application of ethics financially, under section B of the code of conducts states: “employees and members of their immediate families should not have any financial interest, direct or indirect, in any organization that is or is seeking to be a supplier of merchandise or other property or services to the company” (Lowe’s, 2012). Areas of importance that are also covered in the codes pertaining to financial concerns are “payments to governmental officials or other persons, the importance of accurate books and records along with adhering to internal controls to financial reporting, protection, and proper use of company assets, public company reporting, and insider trading according to the code of conduct.” (Lowe’s, 2012).

The possession of information or knowledge of a transaction or attempted transaction must be informed to the employee’s direct supervisor. There is a strong encouragement towards employees to utilize the business’s open door policy or simply by using the website at www.ethicspoint.com (Lowe’s, 2012). Any situations involving any executive officers such as principal executive officers, financial officers, are concern given charge to the general counsel and chief compliance officer. Zero tolerance is given for any retaliation towards any individual that goes against the reporting of any violations of the conduct codes.

The ability of the exchange of previously issued financial assets from individuals to businesses is the main purpose of the financial markets in the U.S. The actual structure brings borrowers, investors, and intermediaries that put together the financial institutions and markets that put both together as a whole. Finance companies, insurance, investment companies, investment banks, are some of the organizations that can compromise the marketplace. The majority of the time individuals deal with commercial banks on a daily basis. The recession of 2008 what greatly due to some non bank intermediaries that made a great number of citizens remove their funds from financial marketplaces. Securities play a significant role in the marketplace in addition to these organizations. These markets are made up of primary and secondary markets. The primary markets are made up of new securities so firms may utilize them to raise capital to assist with financing. The transference of previously issued securities that investors move within each other is secondary markets. Securities can consist of common stock, preferred stock, equity, and debt securities. Finally, financial markets provide the money necessary by companies and individuals and create links between investors and corporations.

Because of the stock market crash of 1929 the U.S. Securities and Exchange Commission was created. S.E.C. mission is to regain the confidence in investors in capital market by issuing information that is reliable with honest and clear rules. Under this...
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