Artical Ana
An article written by Jagg Xaxx, a Doctor of Philosophy from the University of Manchester, tries to make sense of the causes of unethical behavior in business accounting. Dr,Xaxx’s approach to the is topic is one used by many, understand a complex subject by simplifying it down to its base elements. How do we identify situations that might lead to fraud and how do we prevent it? First an understanding of why someone might commit fraud is need.
The best way to identify when a situation might cultivate unethical behavior in accounting is to determine the reasons why people would choose to be unethical in their accounting practices. Once you know why a person would act in a particular way then a better understanding of potential dangerous situations becomes as simply as observing and analysis individual employees. The biggest reason behind lapses accounting ethics has to be greed. It seems silly that such a complex topic as accounting ethics can be boiled down to one word but “some people enjoy having lots of money and will break the law to get it” (Xaxx, 2010). The term “cook the books” comes to mind in this situation. In accounting people have the opportunity to change numbers in the books and take more money for themselves; this is basically robbing the company with a paper and pen instead of a gun and mask. With this type of theft the potential for stealing a lot of money can become very tempting to even the most loyal employee.
Sarbanes-Oxley act of 2002 has had a major effect on accounting in the United States. By requiring top level management to sign the accounting statements they can be held accountable for any fraud in the statement. The Sarbanes-Oxley act has also allows for much harsher punishments for those caught committing fraud. This act has also had a profound effect on all financial statements. The target of the Sarbanes-Oxley act was to make corporate accounting more translucent so everyone one can see what a company is doing. The side effect this
The best way to identify when a situation might cultivate unethical behavior in accounting is to determine the reasons why people would choose to be unethical in their accounting practices. Once you know why a person would act in a particular way then a better understanding of potential dangerous situations becomes as simply as observing and analysis individual employees. The biggest reason behind lapses accounting ethics has to be greed. It seems silly that such a complex topic as accounting ethics can be boiled down to one word but “some people enjoy having lots of money and will break the law to get it” (Xaxx, 2010). The term “cook the books” comes to mind in this situation. In accounting people have the opportunity to change numbers in the books and take more money for themselves; this is basically robbing the company with a paper and pen instead of a gun and mask. With this type of theft the potential for stealing a lot of money can become very tempting to even the most loyal employee.
Sarbanes-Oxley act of 2002 has had a major effect on accounting in the United States. By requiring top level management to sign the accounting statements they can be held accountable for any fraud in the statement. The Sarbanes-Oxley act has also allows for much harsher punishments for those caught committing fraud. This act has also had a profound effect on all financial statements. The target of the Sarbanes-Oxley act was to make corporate accounting more translucent so everyone one can see what a company is doing. The side effect this