“Review of Accounting Ethics”
Running Head: Review of Accounting Ethics
Cathy D. Brown
Professor: Kenneth Lavery Course: BUS 557 Financial Accounting April 28, 2013
Review of Accounting Ethics Page 2
Abstract The paper will analyze the corporate ethical breaches in recent times, assess whether or not you believe that the current business and regulatory environment is more conducive to ethical behavior. Ethics behavioral aspect of accounting is a special area of accounting that is developed to address such aspect of human information processing behavior, judgment quality, accounting problems created by users and providers of accounting information as well as their decision making skills. Secondly, paper will describe the organization, the accounting ethical breach and the impact to the organization related to ethical breach. Thirdly, this paper will determine how the organizational ethical issue was detected and how management failed to create an ethical environment. In some cases, some company pledged its own stock to ensure that partnerships would be able to borrow money. And when Enron stock started plummeting, the whole thing fell apart. Fourthly, this paper will analyze the accounts impacted and or accounting guidelines violated and the resulting impact to the business operation. They operated as the masterminds behind the system to defraud investors. The banks, by offering fake, illegal and not approved by regulators deals, played a significant role in helping Enron falsify company financial statements and mislead investors. Finally, the paper will discuss as a CFO which measures could have been taken to prevent this ethical breach and how each measure should be implemented in the future. First of all, there should be analysis of culture within the organization including norms of behavior, standards of conduct, values, perspective of attitudes, perceptions, there seems to be pressure to commit misconduct, communications, risks and vulnerabilities
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Given the corporate ethical breaches in recent times, assess whether or not you believe that the current business and regulatory environment is more conducive to ethical behavior. Provide support for your answer. Ethics behavioral aspect of accounting is a special area of accounting that is developed to address such aspect of human information processing behavior, judgment quality, accounting problems created by users and providers of accounting information as well as their decision making skills (Ponema, 2009). Existing businesses and regulatory environment is more conductive behavior because some companies and managers feel as though they can get away with it. The unpredictable increase and collapse of the Enron Company set off a long-burning fire under the American social conscience. From every crevasse and corner, voices rose demanding increased accountability, demanding tighter regulation, and demanding that the unethical be brought to justice. Clearly, in such estimation, those at fault should have been punished business. Many transformations in the business environment have taken place, including immoral conducts and the tendency for corruption. Unethical accounting behavior is also included as a consequence. (Sims, 1992). So the government has...
References: Snider, D. (2006, September 26). University of California, San Francisco. UC Says Farrow Implicated Banks in Enron Fraud. Retrieved April 27, 2013 from http://ucsf.edu/ stories/uc-says-farrow-implicated-banks-in-enron-fraud
Halbert T & Ingulli, E. (2009). Law & Ethics in the Business Environment: 2010 custom edition (6th ed.). Mason, OH: South-Western Cengage Learning
White J. (2000). Ethics in Business. Retrieved April 27, 2013, from http://www.pro2net.com
Sims, R.R. (1992). Journal of Business Ethics, 11: 651–662.
Committee of the Board of Directors of Enron Corp. Retrieved April 27, 2013, from http://fl1.findlaw.com/news.findlaw.com/wp/docs/enron/specinv020102rpt1.pdf
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