Provide examples to support your response. 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?
Benjamin Koorbatoff fit the profile of the average fraud perpetrator by having the opportunity. He was the CEO of Calgary Oil Company. He was different because he thought he was the driving force of the company. He misappropriated funds from several companies. He even misappropriated funds while on probation because he was in a position of trust.
Even if nobody helped him deceive investors, people knew about it, and the act of knowing and not reporting a white-color crime is guilty by association. He must have worked out a deal with his auditors just like Enron did with Arthur Anderson. What should happen to ensure schemes like this don't happen in the future is enforce strict restrictions and regulations. Strict internal controls and compliance standards will detect
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.
If this was not the case, Congress would not have enforced the Sarbanes-Oxley Act. In 2002, the financial scandals that occurred by multiple corporations proved that the accounting profession was in dire need of some regulation by the government. I predict that corporate fraud will remain the same based on the research produced during the writing process for this assignment. There is no fool proof way to completely diminish financial fraud or to protect investors. As people as a whole have proven time and time again, there are rules and laws and there are people whom break those rules and laws for personal gain.
They can easily use fraud to authorize payment for a false invoice. The accountant also should not be able to print checks and complete the bank reconciliation. It allows the accountant to perpetrate fraud because they have access to blank checks to write fake checks and then cover it up with their record keeping responsibility. Along with segregation of duties, this also violates independent internal verification. A different employee, separate from personnel responsibility for the information, should make the verification and should report any discrepancies to management.
It uses Public money unnecessarily and is unfair to taxpayers. It makes financial reform going forward much more difficult. Protecting the markets for derivative products like CDOs and CDSs allows for a repeat of the risky practices that got us into the current crisis. And finally, by guaranteeing the corporate existence of large banks, we are maintaining their power and priorities and thus are not likely to see gains on predatory lending, foreclosure abuse, and other areas where reform is sorely needed. If we want to help the people who are suffering in this crisis and recession, then we should make financial policies with them directly in mind.
1. Miller fits the profile of the average fraud perpetrator in that he gained the trust of his employer, he wasn’t violent, he worked where he committed the fraud and he spent the money he stole to have a better lifestyle. He would not have been able to continue the lifestyle he had without the money he was stealing. He was also stealing from new employers to pay back the prior employers. He differed from the average fraud perpetrator in that he admitted what he had done and promised to pay back the money he had stolen.
When unethical decisions are made, everyone involved in the corporation and its well being are affected in a negative way and will jeopardize the well being of the business. “Ethical responsibilities of an organization’s management are to follow the generally held beliefs about behavior in society” (Wheelen and Hunger, pg 58). An ethical role within the corporation is not mandatory, however it is practiced in most businesses would be giving employees notices of
For example, former governor of Virginia, Robert F. McDonnell was charged with illegally accepting gifts, vacations, and loans from a wealthy businessman who wanted special treatment from State government. Though they were caught, this kind of corruption happens more frequently and even in legal circumstances can be proof that economic status can lead to social inequality. The average person can contribute a vote to a politician, but on an individual level since they aren’t in a position to influence policies, the opinion of the common man remain