Unethical versus Ethical Leadership Leaders at AIG argued that they were obligated to pay bonuses to executives even after the company was bailed out by the U.S. government because of the company’s contracts with these executives. Do you think this is a legitimate argument from an ethical standpoint? I truly believe that this situation was very unethical. Sure the leaders thought they were entitled to the bonuses. But logically, the bonuses were for business productivity.
Fraud There are many reasons that someone would commit fraud and only those people will ever know what pushed them to do so. The three main factors that contribute to fraud are opportunity, financial pressure, and rationalization. If the workplace does not have proper controls in place to deter people from wanting to commit fraud, it makes it easier to do so. The financial pressure portion of this can sometime be fueled by nothing more than greed. Mostly this occurs because an employee has financial issues and believes that the company would not miss even a little bit of money.
There is a large difference between initially making an error and failing to report the error. When you first make an error this can be considered a mistake and things can continue on as usual. When you realize you have made a mistake and failed to rectify the situation is where the ethical dilemma comes into to action. As an individual being trusted with the well being of a companies’ financial growth estimates you should want to make sure the jobs of others and yourself are stable. In addition, how can your superiors trust you if you can not admit when you are wrong before any real actions have take place.
This is also a good example of why business owners should keep a separate checking account for their business. Keeping your money and the businesses money together is a recipe for disaster. When you separate the two, your record keeping and tax accountability becomes more simplistic to keep up with. These are all honest and easy mistakes to make, but the more prepared you are, the less room you will create for mistakes like these to happen. Accounting is no easy task so you must remember that an accountant will have years of education on that one subject.
The cost associated with bribery is the abuse of power by the decision-makers and by officers in their respective position. A significant consequence is that bribery and corruption adds to the cost of doing business but, crucially, without adding corresponding value. Instead of the full contract amount going towards the delivery of the product or service, only a portion is productively employed. Another damaging cost to bribery is the unfair evaluations of a tender or procurement bid awarded to the contractor. Bribery promotes inefficiency and ineffectiveness of the business system and adds to the cost of doing business.
Arthur Anderson also destroyed audit paperwork that showed the issues within Enron that would lead to the disaster. Arthur Anderson was criminally charged and sentenced with obstruction of justice for the destruction of the audit paperwork. 3. What was the prime motivation behind the decisions of Arthur Andersen’s audit partners on the Enron, WorldCom, Waste Management, and Sunbeam audits: the public interest or something else: Cite examples that reveal this motivation. The prime motivation behind the decisions of Arthur Andersen’s audit partners was money and lining their own pockets.
At the base is economic responsibility, with its focus on providing wealth and value for stakeholders. Company Q has interpreted this to mean that if a store is consistently losing money, it should be closed to protect the company’s remaining assets, and thereby preventing loss to stakeholders. While lost revenues should definitely be a consideration, Company Q could have also investigated why the two stores were losing money. Did insurance costs rise because of the location of the stores in high-crime areas? Were payroll costs outpacing profits?
Its profit oriented objectives resulted unethical activities and $200,000 penalty. Consumers are making decisions based on the advertisements. The misleading/false advertising will lead the consumers to make wrong decisions. This action is also monopolistic behavior, which is unethical and limited by the competition act. The monopolistic behavior could affect the competition negatively and damage the smaller competitors.
What are the ethical issues here? First Issue The ethical issue in the case is junior colleague do not seen the sales invoice and the stock was being written off without proper accounted. This reflects the weak internal control of the company. If the invoice is not issue, this may understated the revenue and thus understate profit. In our opinion, the company is possibly with intension to understate the revenue and avoid the tax.
2. Assuming you believe there was unethical conduct by Andersen/its employees, how did this happen? This happened because of the close relationship between the audit firm and their client, in this case Enron, contributed to biased judgments and interpretations of accounting practices and standards. Enron, an incredibly competitive firm whose managers were heavily incentivized to maximize profits (and hide losses), was a large source of revenue for Andersen over the years, and to cause conflict by disagreeing with their accounting practices could have caused Andersen to lose the account and revenue stream. Andersen employees took the approach that it is in the firm’s best interest to keep Enron happy.