I think that the error in decision making came because the CEO didn't know the terrible status of the company. I think that he thought he was alright to do what he did financially, even though spending that kind of money just to upgrade your office is absolutely ridiculous. The only thing that could've prevented that situation is for the CEO to have some common sense about how to spend your money or even know the company's standing. 3. I think that both CEO's should've let their employees know the status of what was going on, because it seemed that they had no idea of the things that were occurring.
If a reasonable person believes a manager should have known about fraud in the business, this may be a good reason to allow the jury to side with the claimant. Although some of the practices may meet GAAPs, that doesn’t mean all are ethical. One of the biggest problems is the legality of it. What may be deemed legal by the SEC one year may not be considered legal the next year. So if you’re involved n questionable accounting technique like “book-and-hold” or something similar, and then it becomes
From an accounting prospective, the major problem with the calculations mentioned in the article is determining the rate of return and length of the marketing investment. While the initial value of the “investment”, i.e. marketing expense, can be easily determined, determining the real value after the investment has been made has the potential to be biased without a commonly used measurement. The value of the investment could also fluctuate from year to year based on the companies’ profitability even though marketing had not direct
(INTRO) One of key accounting activities this WorldCom case points out is how WorldCom capitalized leased lines which brought little or no value to the organization, but were accounted as capitalized assets, and the impact this can have on external users. “To maintain and broaden public confidence, members should perform all responsibilities with highest sense of integrity.” (AICPA.com) By capitalizing the costs of these leased lines instead of it would have shown a significantly lower net value of the company. It would have negatively affected cash flows and all the ratios. This activity certainly discredits the profession. It does not offer the fullest disclosure, objectivity, and transparency.
With these aspects in mind, the authors offer recommendations that would limit the effects of biases including full divestiture of consulting and tax services, prohibit auditors from taking positions with the firms they audit, removing the threat of being fired, and educate auditors so they understand how and why biases effect their decisions. I found the study conducted by Cain et al. on the effects of disclosing conflict of interest very fascinating. I was surprised that disclosure of the advisors motive to mislead the estimators did not cause the estimators to substantially discount their advisor’s advice. I would think that disclosing the advisors motives would have a greater impact on the estimator’s decision.
Pocketing the difference between price tag, ongoing promotion and cash sales. * Involuntary rotation might not be good for the moral of the employees, lowering their loyalty and increasing their turnover * Lack of charismatic leadership: * Branch managers have no close relationship with their corporate superiors. * Performance evaluation is based on lowering theft percentage, not personal goals to achieve. Those factors result in poor perceived organizational support (OB, p. 110). This perception has a direct effect on employees’ engagement and organizational citizenship behavior towards the goals of the company.
INTRODUCTION This case is about the unethical decisions and activities that are instructed by Phil Bailey, supervisor of Empress Luxury Line. The case also describes the ethical decision that is taken by Kevin and his refusal to follow an unethical decision of his supervisor Phil Bailey by denying making fraud with the insurance adjustor. This report will highlight the ethical dilemma faced by Antonio during following unethical orders of his superiors. Additionally, from the point of view of Antonio suitable and effective strategy will be also suggested that will be beneficial for the organization and for the employees without compromising their ethics. 1) Analyze the ethical dilemma faced by Antonio In the case, when Phil Bailey told to Kevin to charge high amount of money over the insurance company for the damage of wires and computer circuits, Kevin disagreed to do this unethical activity due to having high morality and standards.
Employees have the same opportunity to perform unethical accounting activities as the top executives. If an employee fears getting fired for making a mistake with the accounting transactions, the employee may decide to make adjustments to hide the mistake. This mistake could result in large amounts of money either gained or lost to the shareholders and the organizational could take disciplinary action to correct the problem. Another reason that employees could make unethical decisions with the accounting practice is for sabotage. If an employee becomes frustrated or feels the need to retaliate
(Osmond, 2014) Accountants do not always follow the moral guidelines set out by the company’s managerial accounting and thus creating ethical problems within the business. The resultant effect of not following the set out moral values is that stakeholders lose confidence with the company’s financial stability. Ethics will be important in ensuring that the accountants always prepare the books of account in time and update them in time. The accountants will also be in a position to report correct, accurate and ethical information on the financial position of the organization (Osmond, 2014) Managerial accounting is characterized by forecasting for the future sales of the business. It focuses on the users of the company’s business details.
Although it would appear wise to accept gifts or provide gifts to another company to earn their business you are in fact interfering with normal business practices and in most companies can be a reason for termination for such actions. Successful careers are not built by the gifts or bribes one receives but by the determination of professional individuals whose physical and mental labor is the foundation of any profitable business. While professional ethics are the mold that results from the morally obligation to provide fair and equal treatment to others, professional values are the substance that is engulfed by smart business practices and mission statements. Certain Mission Statements can include particular values such as a specific services that are responsible for providing their customers the services or products they demand. Examples of some mission statements are listed in table 1 below.