Preview

Effect of Unethical Behavior Article Analysis

Good Essays
Open Document
Open Document
763 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Effect of Unethical Behavior Article Analysis
Effect of Unethical Behavior Article Analysis
Beatrice Arnold
ACC/291
February 4, 2013
James Covert

Unethical Practices and Behavior The business environment can be a cause for unethical practices and behavior in accounting. An example of this can be management instructing an employee to record a transaction in an incorrect manner. It can be as simple as a company whose clients sign a contract on December 1, 2012 for the year. Then reporting the revenue for the whole year in December instead of just reporting the month of December as would be the requirement of accounting principles (Kendra, 2013).
Another cause for unethical practices or behaviors can be greed. Some people will do anything, including breaking the law to get extra money. An accountant has an opportunity to “cook the books” (Xaxx, 2013) that can allow they to take a little or a lot. This is very tempting as no one seems to get hurt in the process.
At times ignorance of the tax law or regulations about insider trading can be easily misunderstood by inexperienced accountants, which could cause unethical behavior without even realizing it.
The role of an accountant is to use information the company provides to gather useful information about the company’s economic affairs. This can be difficult if there is a conflict of interests. If the accounting firm hired to perform a profit and loss audit finds that the information it has to report will be damaging to their client the accounting firm’s responsibility is to provide accurate information for the shareholders and the public. This could be a conflict of interest because the accountant may feel a loyalty to the company even though the company is paying the accountant the loyalty is to the shareholders and the public.
To each person integrity and ethics can mean different things. This can cause business situations to be approach by different ethical vantage points. The American Institute of Certified Public Accountants (AICPA) has



References: COHN, M. (2012, July 27). AccountingToday. Retrieved from Congress Examines 10-Year Legacy of Sarbanes-Oxley: http://www.accountingtoday.com/news/congress-sarbanes-oxley-anniversary-63434-1.html Donaldson, C. W. (2005, April 21). U.S. Securities and Exchange Commission. Retrieved from Testimony Concerning the Impact of the Sarbanes-Oxley Act: http://www.sec.gov/news/testimony/ts042105whd.htm Kendra. (2013). Chron. Retrieved from Ethical Dilemmas in Accounting: http://smallbusiness.chron.com/ethical-dilemmas-accounting-3740.html Vitez, O. (2013). Chron. Retrieved from Integrity & Ethics in the Accounting Industry: http://smallbusiness.chron.com/integrity-ethics-accounting-industry-3739.html Xaxx, J. (2013). Chron. Retrieved from What Are the Causes of Ethical Lapses in Accounting?: http://smallbusiness.chron.com/causes-ethical-lapses-accounting-24559.html

You May Also Find These Documents Helpful

  • Good Essays

    Acc291Individual Paper

    • 649 Words
    • 3 Pages

    The Sarbanes-Oxley Act of 2002 (SOX) was created in response to the series of misleading and fraudulent activities of publicly traded big business’s in the 1990s. During this time, multiple large publicly-traded businesses increased their stock prices by “publishing false or deceptive financial statements” (Lasher, 2008, p. 187). The most publicly charged company was Enron, which was then followed by Xerox, WorldCom and Global Crossing. This resulted in millions of dollars of stock market value disappearing in what seemed to be overnight. It is in response to these events that Congress drafted and passed the Sarbanes-Oxley Act of 2002.…

    • 649 Words
    • 3 Pages
    Good Essays
  • Satisfactory Essays

    Nogler, G., & Inwon, J. (2011, May/June). Sarbanes-Oxley Act: Was the ’one-size-fits-all’ approach justified? Journal of Corporate Accounting & Finance (Wiley), 22(4), 65-76. http://dx.doi.org/10.1002/jcaf.20691…

    • 502 Words
    • 2 Pages
    Satisfactory Essays
  • Powerful Essays

    Sox Act

    • 2419 Words
    • 10 Pages

    References: United States Securities and Exchange Commission (September 2009). Study of the Sarbanes-Oxley Act of 2002 Section 404; Internal Control over Financial Reporting Requirements. Retrieved from http://www.sec.gov/news/studies/2009/sox-404_study.pdf…

    • 2419 Words
    • 10 Pages
    Powerful Essays
  • Best Essays

    Sarbanes-Oxley Act of 2002

    • 4123 Words
    • 17 Pages

    Policy Paper on the Sarbanes-Oxley Act of 2002 Randy Ibrahim [SID: 860866350] Business 102 December 09, 2010 Dr. Sean D. Jasso…

    • 4123 Words
    • 17 Pages
    Best Essays
  • Powerful Essays

    Sarbanes-Oxley Act of 2002

    • 1496 Words
    • 6 Pages

    I have written this report in order to fulfill my graduation requirements at Southwestern College. Also to become more knowledgeable on the Sarbanes-Oxley Act of 2002 (SOX) and the impact it has had on the business world.…

    • 1496 Words
    • 6 Pages
    Powerful Essays
  • Good Essays

    Congress responded by enacting the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley”), which became effective on July 30, 2002. Sarbanes-Oxley makes many changes in the securities regulation process to improve corporate governance and reporting. It imposes harsh penalties on violators, creates an elaborate system for governing and regulating auditors for public companies, and requires the securities industry’s self-regulatory organizations to adopt rules to prevent conflicts of interest and enhance the independence of securities analysts. Even casual observers of the political reaction to the stunning disclosures about Enron, WorldCom and Tyco’s deceitful financial practices might have predicted some such legislative response (Jennings, 2010, p. 212).…

    • 766 Words
    • 4 Pages
    Good Essays
  • Powerful Essays

    Six Years of the Sarbanes-Oxley Act: Are We Better Off? By Dodwell, William J: The CPA Journal, August 1 2008…

    • 941 Words
    • 4 Pages
    Powerful Essays
  • Better Essays

    The Sarbanes-Oxley Act

    • 1467 Words
    • 6 Pages

    The Sarbanes-Oxley Act was established in 2002 and has initiated extensive transformation to the parameter of economic practice and shared bureaucracy. Nevertheless, it was named after Legislator Paul Sarbanes and Representative Michael Oxley, who were the founders, given it the title Sarbanes-Oxley Act of 2002. On July 30, 2002, President George Bush signed off on SOX, revising the security laws that, moderately, reevaluate the responsibility of accountants. Although the focal point of this statute is on shared organizations, it is projected that banks and investors, who necessitate reviewed reports of the…

    • 1467 Words
    • 6 Pages
    Better Essays
  • Powerful Essays

    Business Wire. "Rep. Michael Oxley Cites Restoration of Investor Confidence as the Legacy ofthe Sarbanes-Oxley Act." Columbus Ohio March 30, 2004.…

    • 4791 Words
    • 17 Pages
    Powerful Essays
  • Better Essays

    The Sarbanes-Oxley Act

    • 1327 Words
    • 6 Pages

    Zhang Ivy Xiying, ‘Economic Consequences of the Sarbanes Act.’ William E. Simon Graduate School of Business Administration, February 2005, pp 1-58. Retrieved on March 31, 2011 from http://w4.stern.nyu.edu/accounting/docs/speaker_papers/spring2005/Zhang_Ivy_Economic_Consequences_of_S_O.pdf…

    • 1327 Words
    • 6 Pages
    Better Essays
  • Satisfactory Essays

    Week 5 Article Review

    • 457 Words
    • 2 Pages

    RE: Nogler, G., & Inwon, J. (2011, May/June). Sarbanes-Oxley Act: Was the ’one-size-fits-all’ approach justified? Journal of Corporate Accounting & Finance (Wiley), 22(4), 65-76. http://dx.doi.org/10.1002/jcaf.20691…

    • 457 Words
    • 2 Pages
    Satisfactory Essays
  • Powerful Essays

    Tyco International as a whole was no different any other company in that it contained a chief executive officer (CEO) that wanted to achieve success. But at some point that success turned into greed. Dennis Kozlowski began working for Tyco in 1975 and was named the CEO in 1992. Kozlowski had a reputation for being aggressive in his field and during his tenure at Tyco was named one of the “Top 25 Managers of the Year” and became one of the highest-paid CEOs (Kaplan, 2009, p. 14). Along his rise to the top, Kozlowski became subjected to a lavish lifestyle of extravagant vacations, company jets and cars, and memberships. During this rise, he also treated himself to a “$31 million Fifth Avenue apartment, a vintage yacht, a Renoir, and a Monet” (Kaplan, 2009, p. 15). However, in 2002, Kozlowski’s world began to crumble around him. He was initially accused of tax evasion, but this accusation by the Manhattan district attorney led to a broader investigation into Kozlowski’s practices. As a result of this investigation, Kozlowski resigned as the CEO, was indicted for looting hundreds of millions of dollars, and was convicted on a range of felonies that led to an eight to 25 year sentence (Kaplan, 2009, p. 15).…

    • 1452 Words
    • 6 Pages
    Powerful Essays
  • Powerful Essays

    Insider trading: Insider trading is a very bad unethical behaviour; it is an illegal practise of trading on the stock exchange to one’s own advantage through having access to confidential information. An example of insider trading is…

    • 2369 Words
    • 9 Pages
    Powerful Essays
  • Good Essays

    Over the past decade, numerous accounting scandals have been revealed. The impact of the unethical behavior exhibited in these scandals caused the companies that were affected to have a huge financial loss for the company as well as investors, collapse, or become in a financial crisis (Ashe and Nealy, 2010).…

    • 427 Words
    • 2 Pages
    Good Essays
  • Good Essays

    The Sarbanes Oxley Act was passed in 2002 as a result of plenty of corporate scandals. The purpose of this act was not only to defend investors and provide them with accurate and reliable information but also make companies and employees behave ethically and with integrity. After the law was passed the financial statement have been impacted and corporate managers are more involved but is the law 100% effective?…

    • 761 Words
    • 4 Pages
    Good Essays