Is Ethics The Reason Accounting Scandals Exist

2122 words - 9 pages

Running Head: Is Ethics The Main Reason For Accounting Scandals?

Is Ethics The Most Important Reason Behind Years of Accounting Scandals?
Joshua A. Williams
DeVry University

Is Ethics The Main Reason For Accounting Scandals?

Ethics: Is It The Most Important Reason Behind Years of Accounting Scandals?

Ethics is a term that refers to a code or moral system that provides criteria for evaluating right and wrong (Spiceland, Spe, Tomassini, 2007). An ethical dilemma is a situation in which an individual or group is faced with a decision that tests this code. Many of these dilemmas are simple to recognize and resolve. For example, have you ever been tempted to call your professor and ...view middle of the document...

(2)Identifying the values related to the situation. For example, in some situations confidentiality may be an important value that may conflict with the right to know. (3)Specify the alternative courses of action. Evaluate the courses of action specified in step 4 in terms of their consistency with the values identified in step 3. (5) This step may or may not lead to a suggested course of action. (6) Identify the consequences of each possible course of action. If step 5 does not provide a course of action, assess the consequences of each possible course of action for all of the stakeholders involved and finally step (7) make your decision and take any indicated action (). Corporate scandals cause the public to question why some people run their businesses honestly and others turn into criminals. Despite the blatant appearance of some scandals, the causes of unethical accounting practices are complex and interlocking. Some people may attempt to rob their customers blind with no qualms, while others are drawn into illegal practices gradually through ignorance or good intentions. I will delve into the some of the past scandals that showcase some of the very reasons I believe ethics is the foundation on which accounting is built upon and the main reasons most scandals existed. I think that with a better ethical foundation being established from the beginning most if not all scandals would not exist in today’s accounting world.

Is Ethics The Main Reason For Accounting Scandals?
In order for one to truly understand the importance of ethics as it relates to accounting one only has to look at its history in parallel with the accounting profession. Although it seems like accounting scandals have all happened in the last 15 or so years, accounting scandals go back at least to the early 1990s when Charles Ponzi started the Security Exchange Company, promised people 200% interest and conned them out of millions of dollars. We can credit him for the term "Ponzi Scheme.” The 1920s had its share of scandals also including Samuel Insull, a Chicago utilities and transportation mogul, who wiped out the saving of many small investors who were also struggling with the Great Depression. Insull was never sent to jail. The 1930s had Richard Whitney who was the president of the New York Stock exchange. In that position, he stole millions from the funds he oversaw. He served three years in jail and was released.

Fast forward to the 1980s and the scandal involving MiniScribe where auditors failed to notice that executives were shipping bricks, rather than computers, from the company's warehouse. Following that, and the Savings & Loan Crisis of the late 1980s, scandals seemed to pick up pace with the following scandals. In the present day accounting professionals have their own specific rules to adhere to established by the national organization of professional certified public accountants (AICPA). Similarly, the Institute of Management Accountants (IMA) the...

Other Essays Like Is Ethics the Reason Accounting Scandals Exist

Rewards 2025- the Only Way Is Ethics

576 words - 3 pages Wendell D. Dinglasa PA 221B-Human Behavior in Organization Prof. Vivian Rojas Molina This reaction paper is in regard to Chapter 5 Rewards 2025- the only way is Ethics. As you may know today employees strive hard to get rewards, bonuses, remunerations, salaries. This is some sort of a motivation to employees to work harder and trying to surpass their previous accomplishments in order to get these rewards, other than the promotion they

Biblical Ethics And Moral Dilemmas: God Is The Answer

2778 words - 12 pages babies was good, and it would still be strongly counter-intuitive. The real solution to the objection can be found by asking why it would be counter-intuitive if God commanded the torturing of babies. The reason is that God created us with a conscience that comports with the standards that he determined for goodness. If he had commanded torturing babies, he would also have built that into our conscience. The truth of the matter is that he has not

How Accurate Is It to Say That the Spread of Revolutionary Beliefs Was the Main Reason for the Fall of the Qing Dynasty 1911-12?

1344 words - 6 pages How accurate is it to say that the spread of revolutionary beliefs was the main reason for the fall of the Qing dynasty 1911-12? This essay will be looking at how much of a contribution the spread of revolutionary beliefs in China had in the fall of the Qing Dynasty. In order to determine the importance of this I will therefore also be looking at other factors such as, foreign interference, double tenth and the inability to change. I believe it

‘It Is Nowadays Impossible to Say Definitely the Precise Reason for Punishment’ (Nietzsche, 1887). Critically Review This Statement with Reference to Philosophical Justifications for Punishment Using...

2379 words - 10 pages ‘It is nowadays impossible to say definitely the precise reason for punishment’ (Nietzsche, 1887). Critically review this statement with reference to philosophical justifications for punishment using contemporary examples. Punishment and Society Friedrich Nietzsche (1887), quoted in his essay “The Geneology of Morals, that ‘Today it is impossible to say clearly why we really have punishment, all idea’s in which an entire process is

This Is My Personal Review Of The Book, There's No Such Thing As "Business" Ethics By John C. Maxwell

2258 words - 10 pages reason is apparent to me: in her frustration with dealing with them, she often neglects to give them respect, and instead often treats them like they are objects she owns. She doesn't realize that if she just gave a little, she would gain an immense amount of respect, and the girls would listen to (as well as obey) her requests. The other topic that I enjoyed from this chapter was that on understanding. I have always sought to be understood by

'How Accurate Is The Film GANDHI In Accounting Mahatma Gandhi's Life?' By Raghav Kaushik

564 words - 3 pages GANDHI the movie is, above all, meant for entertainment. However, the movie is historically correct save for a few exceptions; but it is clear why Richard Attenborough (GANDHI's director) has made these errors.Gandhi gets so upset at South Africa's Apartheid laws over just one incident in a train. It is true that this event really happened but it is unclear why Gandhi got so angry and started his campaign in South Africa.A weak point of the

Ethics Essay

601 words - 3 pages gains a good reputation of being on the whole an honest profession. This is particularly important in the accounting profession where ethics have been brought into the spot light over past few years. Accounting Ethics Auditors are not paid by those whose interest they are supposed to represent-those third parties who rely on our reports. Robert H. Montgomery emphasises this point: “accountants and the accountancy profession exist as a means

Evaluate the Practice of Earnings Management from the Prospective of Corporate Governance and Business Ethics

2383 words - 10 pages judgment and estimate as long as the judgment is legal and within accounting regulations. I agree with the viewpoint of Arya, Glover, Sunder (2002, 247): "No earnings management" is clearly not an optimal solution. Some earnings management is expected and should exist in capital markets. This is necessary because of the fundamental need for judgments and estimates to implement accrual accounting— the first-order effect of allowing these

Ethical Risks and Threats in the Accounting Profession

2316 words - 10 pages indicated that there remains real scope for reviewing how the international academic accounting profession has responded to such scandals (Blake 1998). In particular there is scope to identify the role of professional accounting bodies in providing pre-qualification education on ethics, as well as ongoing professional development. Regardless of what stage ethics education takes place, the post-Enron era has presented an opportunity for critical advances

Sarbanes Oxley-Advantages and Disadvantages

867 words - 4 pages why CEO’s and CFO’s are paying close attention to this law. Main Advantages and Disadvantages of SOX The major reason for the formation of SOX is ethics or lack thereof. Most “gatekeepers” hopped to go the other way when faced with ethical decisions. The law was put into place as a reaction to numerous accounting scandals involving some of America’s most renowned firms such as WorldCom, Tyco and Enron. As with all laws there are

Ethics Research

830 words - 4 pages behaviors. This article is in response to the regulations of the Sarbanes-Oxley act of 2002, that an independent auditing firm be contracted to audit a company in compliance with the Generally Accepted Accounting Practices. Prior to the act, company management hired the auditing firm, negotiated the fee and could request the firm perform other services. The Sarbanes-Oxley Act requires that an audit committee of the company’s Board of Directors hire

Related Papers

Why Ethics Is Presented In Accounting Schools

5433 words - 22 pages of marketing, finance, tax, and accounting. Incorporating ethics into marketing, finance, tax, and accounting classes forces students to regularly and more frequently confront ethics in context, rather than separately and in the background.  II. Should it be taught?: * Objections to teaching ethics—despite the accounting scandals, there are still objections: 1. Inculcating Particular Moral Values: * Ethical behavior is

Managerial Accounting And The Code Of Ethics

3338 words - 14 pages investors (Deese, 2014). However, with the high degree of ethical standards in place today, managerial accountants have no room for misconduct or unethical behavior, as they know what is expected of them and the penalties for failure to comply. II. Managerial Accounting and the Importance of Ethics Without ethics in managerial accounting, accounting fraud would occur more often as a result of no moral obligations. Ethics go hand in hand with

A Study On The Interpretation Of An Article Entitled“Case Studies Of Ethics Scandals: Effects On Ethical Perceptions Of Finance Studies”

4305 words - 18 pages A study on the interpretation of an article entitled “Case Studies of Ethics Scandals: Effects on Ethical Perceptions of Finance Studies” 1. Letter of transmittal Dear Professor Dilip Kumar Sen, I have the honor to present to you my study on the interpretation of an article entitled “Case Studies of Ethics Scandals: Effects on Ethical Perceptions of Finance Studies” as partial fulfillment of the Management Accounting course

The Reason Is The Reason Essay

1220 words - 5 pages sfsf A demonstrated exceptionally clear understanding of subject matter and skills; well organised, formulated and presented; well thought out and structured modular design. Evidence of creative insight and originality in terms of design, application of skills and analysis with some synthesis and evaluation. Submission A demonstrated exceptionally clear understanding of subject matter and skills; well organised, formulated and presented