Effect of Unethical Behavior Article Analysis

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Effect of Unethical Behavior Article Analysis In today’s world, unethical practices and behavior are quite common. There are many situations known of unethical practices in the accounting world such as Enron, WorldCom, and even the mortgage crisis our country is currently working to get out of. With all of these instances of unethical business and accounting practices happening, the question is what is driving these companies to do this. There are many possible answers out there and this article points brings up a very good possible reason, competition. “Many companies in highly competitive industries are likely to bend the rules to keep their customers,” (Williams, 2012). Businesses are constantly competing with each other to gain new business, grow existing business, and ultimately increase their profits. Unfortunately too many companies feel that in order to make this happen they need to cut some corners, but they are not thinking of the long term effects that this can have on their company and their customers. Just because a business might increase its customer base does not mean that it has increased its profits. So, in order to lure in more investors companies may play with the numbers in their books to show a better profit margin. This helps them to look more profitable and to even look better than their competitors. This article suggests that competition puts pressure on businesses and with that pressure may come the push to exercise unethical practices. Executives are being forced to focus on short-term results which can cause them to lose focus on the long-term effects that unethical practices can have. “An excessive focus on short-term results because of intense competition is a factor in some executives’ willingness to engage in unethical practices,” (Williams, 2012). In 2002 the Sarbanes-Oxley Act (SOX) was created to make accounting in
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