Unethical Behaviour by Financial Reporters in an Organization

Topics: Ethics, Business ethics, Morality Pages: 10 (3608 words) Published: May 10, 2011
The word "ethics" is often in the news these days. Ethics is a philosophical term derived from the Greek word "ethos" meaning character or custom. This definition is germane to effective leadership in organizations in that it connotes an organization code conveying moral integrity and consistent values in service to the public. Formally defined, ethical behaviour is that which is morally accepted as "good" and "right" as opposed to "bad" or "wrong" in a particular setting. For an individual to exhibit ethical behaviour, the mechanism must have adequate provisions to ensure that there is no victimization of employees who follow this procedure. It also suggested that companies should take measures to ensure that this right of access is communicated to all employees through means of internal circulars. The employment and other personnel policies of the company shall contain provisions protecting it from unfair termination and other unfair prejudicial employment practice. There is absolutely no room for unethical behaviour in the professional world. This statement is exceptionally important for publicly traded companies and their accounting practices. From financial officers to accountants to auditors, and so on, there is no greater impact on stakeholders when these persons perform unethically. Reasons for Behaving Unethically

There are multiple reasons for which one might consider acting unethically when preparing financial information. The most obvious reason may be quite simply, for self-interest—greed. An accountant may embezzle funds from his or her employer for financial gain. Or perhaps the Chief Financial Officer of a publicly traded corporation may prepare financial statements to appear as though the company is performing much better than it actually is, because he or she wants their stock portfolio to increase. Another example for why unethical behaviour might exist is from corporate pressure. An accountant may feel pressured from his or her client to report false information. Or maybe a Chief financial officer is experiencing demand for improvements from the board of directors, the company’s president, owners, or stockholders; or he or she may be in fear of losing their job. An accountant may decide to work for a company even though a conflict of interest may exist. If the accountant is owed money or has a significant stake in a firm, he or she may not be the ideal individual to prepare certain companies’ financial statements. Finally, and perhaps the most common form of unethical behaviour, is the failure for an accountant to conduct an in-depth analysis when preparing and revising financial information. There are many individuals who prefer to take short-cuts in life; and frankly, this simply is not acceptable when expected to perform in a professional manor. Issues on Ethical Behaviour

The issue of business ethics is engaging companies more and more – both domestically and internationally. This trend is accentuated by high-profile examples of breaches of accepted standards of ethical behaviour. For example, the recent Enron case where inadequate checks and balances within the firm enabled unethical behaviour to occur, a development made easier by the failure of the external auditor to fulfill its role properly. Assumptions about ethics and business are influenced inevitably by fundamental beliefs about the role of business in society. On the one hand, there are those who believe that the sole social responsibility of business is to generate profit. For some proponents of this view, profit generation itself takes on a moral dimension whereas others see profits as the key to wealth generation – the main way of addressing social issues (Davies, 1997, p. 88). On the other hand, others believe that the role of business is much broader than that of profit generation and that all those who are affected by the way a company operates – shareholders, employees, customers, suppliers, the local...
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Organization Behaviour Essay
  • Unethical Behaviour Essay
  • unethical behaviour Essay
  • Essay about Organization Behaviour
  • Organization Behaviour Essay
  • Organization Behaviour Essay
  • Organization Behaviour Essay
  • Organization Behaviour Essay

Become a StudyMode Member

Sign Up - It's Free