Wal-Mart Ethics and Compliance
University of Phoenix
August 24, 2009
Wal-Mart started as a single store in 1962 and since then has expanded to over 3,600 stores in the United States and operates in 15 international markets. This paper will discuss the role of ethics and compliance in the Wal-Mart organization as it relates to the financial environment. We will describe the procedures in place to ensure ethical behavior and identify the processes used to comply with SEC regulations. Using the annual report information for Wal-Mart we will evaluate the financial performance over the past two years and calculate financial ratios. Based on those financial ratios, we will discuss the trends evidenced and the organization’s financial health. Ethics and Compliance
The role of ethics and compliance within an organization today is of utmost importance to the well-being and livelihood of that organization. Any associates who are part of Wal-Mart’s management are required to be familiar and compliant with the Statement of Ethics. “The Company also maintains a separate Code of Ethics for our senior financial officers. Wal-Mart also has in place a Related-Party Transaction Policy. This policy applies to Wal-Mart’s senior officers and directors and requires material related-party transactions to be reviewed by the Audit Committee. The senior officers and directors are required to report material related-party transactions to Wal-Mart.” (Duke and Schoewe, 2009). Wal-Mart has a Statement of Ethics applicable to all associates. The CEO and all Senior Financial Officers, including the CFO and Corporate Controller, are bound by the provisions set forth therein relating to honest and ethical conduct, conflicts of interest and compliance with all laws. In addition to the Statement of Ethics, the CEO and Senior Financial Officers are subject to the additional specific policies set forth below. If the CEO, the CFO or Corporate Controller has a reporting obligation under any policy set forth below, they must promptly bring the matter to the attention of Internal Audit Services and the Audit Committee. If any other Senior Financial Officer has a reporting obligation under any policy set forth below, such Senior Financial Officer must promptly bring the matter to the attention of (A) his or her immediate supervisor and Internal Audit Services or, if appropriate, (B) the Audit Committee. For the purposes of this Code of Ethics, the term “Senior Financial Officer” shall mean the CFO, Corporate Controller, officers in Accounting, Finance and Tax areas, Chief Executive Officers who are responsible for an operating division, and officers in operating divisions who are responsible for accounting. The following items are some of the procedures that Wal-Mart has in place to ensure ethical behavior. It will also show the processes that Wal-Mart used to comply with SEC regulations: 1.
The CEO and all Senior Financial Officers are responsible for full, fair, accurate, timely and understandable disclosure in the periodic reports required to be filed by the Company with the Securities and Exchange Commission. Accordingly, it is the responsibility of the CEO and each Senior Financial Officer to report any untrue statement of material fact and any omission of material fact of which he or she may become aware pertaining to information prepared by him or her or associates in his or her area(s) of responsibility that affect the disclosures made by the Company in its public filings. 2.
The CEO and each Senior Financial Officer shall report any information he or she may have concerning (a) significant deficiencies in the design or operation of disclosure and internal controls which could adversely affect the ability of associates in his or her area(s) of responsibility to record, process, summarize and report financial data or (b) any fraud, whether or not material, that involves any associate who has a significant role in his or her...
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