Professional Ethics - Accounting and Finance Report

Topics: Business ethics, Ethics, Corporate governance Pages: 9 (2688 words) Published: November 11, 2010
BUSN202 Professional Ethics


By: Rafael Bozionelos
ID: S00067751
Course: Professional Ethics
Code: BUSN202

Title: Chief Financial Officer’s Report on Ethical Conduct of manufacturing organisation A report prepared for the CEO of a manufacturing organisation on four ethical dilemmas presented. Taking a look at the responsibilities of the Chief financial officer and the Chief executive officer and recommendations based on which direction to take. To be ethical or unethical, that is the question.

1 Introduction4
2 Responsibility as Chief Financial Officer5
2.1 Misrepresent products that come from environmentally irresponsible sources as environmentally friendly;5
2.2 Bribe officials of a foreign government;5
2.3 Mislead the audit committee;6
2.4 Ignore important internal controls;6
3Responsibility as Chief Executive Officer7
3.1Misrepresent products that come from environmentally irresponsible sources as environmentally friendly;7
3.2Bribe officials of a foreign government;7
3.3Mislead the audit committee;8
3.4Ignore important internal controls;8
4Ethical program to improve corporate culture9
5 Conclusions10
6 References11

1 Introduction

This paper will discuss the ethical issues which are being brought to light of a manufacturing organisation. These ethical issues include: * Misrepresent products that come from environmentally irresponsible sources as environmentally friendly * Bribe officials of a foreign government;

* Mislead the audit committee;
* Ignore important internal controls.
The Chief Financial Officer and the CEO must outlay their responsibilities for each of these situations and prepare a program for implementation to improve corporate culture.

2 Responsibility as Chief Financial Officer

2.1 Misrepresent products that come from environmentally irresponsible sources as environmentally friendly; Misrepresenting products is a serious act of unethical behaviour and can lead to some harsh consequences. Weighing up the advantages and disadvantages will give us a clearer insight of what is expected to come if this behaviour is to be followed through with. Some of the reasons why misrepresenting products would be beneficial include: * Improving the bottom line using synthetic goods and cutting costs * Perceived as an environmentally friendly organisation The potential risks involved for this unethical behaviour include: * Large fines for false misrepresentation of products

* Reimbursements for any damage done
* Community service or prison time depending on sentencing in the court of law * Loss of trust and respect from existing or new potential customers Misrepresenting products can be backtracked to the marketing sector of the business. Vitell and Grove (1998) state that, “marketing is a focus of concern which is particularly vulnerable to criticism with respect to unethical practises” (p. 433). Therefore as my duty of chief financial officer, notifying this unethical behaviour which has radical ramifications to the chief executive officer has greatest precedence, along with the financial distress that this issue has the capability of causing, which has been calculated to be closing of business operations, thus bankruptcy and potential prison time, as a maximum. 2.2 Bribe officials of a foreign government;

Bribery to a foreign government is a means to provide short term gains, despite its long term backlash and large scale risk. Pith (2010) states that bribery can lead to “legal and financial danger, not to mention the damage that could be done to their reputations” (p. 59).

The profits made within the organisation will be streamed to corrupt officials of foreign governments instead of shareholders, and as profits continue to rise within the organisation, so will the greed of foreign corrupt officials in order to continue operations abroad. This can directly affect...
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