The CFO for a corporation deliberately misstates expenses on the income statement purely out of a sense of loyalty to his CEO and the company. The CFO will receive no financial incentive for this misstatement. In fact, he risks losing his job by doing this. Is this an ethical violation for the CFO? Why or why not?
The new CEO would rather operate the company without interference of the “money man.” Even though, this maybe a gamble due to corrupt the thinking that would affect Beltway’s public credit. Beltway Investments could not allow it to become
These same individuals trusted and respected Bernard Madoff and yet he showed less than the mutual respect a professional investor should show toward his clients. Family members were not immune to his scheme. In fact, other family members were encouraged to invest and also bring in new investors into the fold of his deliberate hoax of profiting off of the rich and unassuming. Madoff showed that he lacked care and empathy for his clients, clearly a pure dereliction of duty, to provide the best information and protect investor’s financial investments. There were also unethical issues involving the entity that was supposed to secure and watch over those that are investing our money.
The Supreme Court ruled that it was unconstitutional because it did not give the presidential administrations the power to remove board members (Younglai et al., 2010). Another major con of SOX is the cost to comply with the audit requirement. Many lawmakers fear that these costs are pushing firms to move their operation oversees (Sarbanes-Oxley Act. (n.d.). Overall, SOX has caused companies to be more forthcoming with their financial data at the same time instilling more confidence from the public.
The lifestyle red flags that could have tipped off the company to the possibility of fraud would be the new expensive cars, the expensive clothes, the houses that his income would not have been able to support. 5. Companies don’t like to prosecute white-collar criminals because they are afraid of how it will make the company look. It makes it look as though they aren’t able to keep control of what is going on internally. The problem with this lies in that others may commit fraud or continue to commit fraud because they know the company won’t prosecute.
If I were a human resource manager, I would be ashamed and I would feel like I didn't do my job, and that I just ignored a safety issue that was serious. The lawsuit costed the company a lot money and I would be afraid that I would lose my job over the lawsuit. The courts verdict would affect me greatly and I would be ashamed to go back to work. Their was no explanation as to why the safety complaints were never investigated
It cause overstate inventory and understate the cost. Therefore, this has become the key factor of inherent risk. (2) The first risk is Company does not set internal oversight Institutions. In this case, shareholders did not set the relevant oversight institutes, but they firmly believe CEO (Hebding) decision, which led to the failure of internal control environment, in this case, Hebding can create different fictional accounts, aimed at the data meet the requirements of shareholders, but his aim is to deceive shareholders, and to reap more benefits. For example, Hebding instructed his employee to make false account such as understate expense, overstate equipment and inventory and so on.
When corruption occurs it damages the reputation of the employees and the business. Society relied upon this firm to assist in making them money but the firm was more concerned with their bottom line. Many of the individuals doing business with these firms lost their life savings and destroyed some of the trust that investors have with the Wall Street firms. It makes people have second thoughts about investing in the stock market. Another effect this unethical behavior had on these organizations been they agreed to pay a penalty of over $1.43 billion dollars as compensation to the victims.
The corporate culture within Enron focused on the bottom dollar. It was one of greed, look the other way and competition to excel at any costs. The culture was such that it encouraged breaking/ bending the rules to turn a profit. It was describe as having a culture of arrogance that led their employees to believe they could handle increasingly greater risk without facing any danger. Their accounting system used corrupt measures to show profits.
Which Wall Street did not have in place or this would have never happen. Their virtues are money, how much they can get no matter what it costs others in the long run. Proof of this is the bail out that the taxpayers paid for. And that the government had to step in to or the economy would have been even worst. (Still think we are in a Depression not a rescission) Also the CEO of Enron for conspiracy and multiple counts of fraud is one example of dishonesty, fraud, disregarding one professional responsibility by given themselves Astronomical salaries and enormous benefits this reduces profits of the stockholders, who own the company.