Unethical Behavior
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Ethical virtue is acquired by habituation . . . for it is by our actions with other men in transactions that we are in the process of becoming just or unjust . . . . Just means that which is lawful or that which is fair, while unjust means that which is unlawful or that which is unfair.( Apostle, Garson, 1991, p.444) One of the principal challenges corporations have faced in handling ethical matters is that ethics historically have not been taught in this country in any sort of systematic, formalized, or reliable way. (Orin, 2008 pg. 141.). Ethics are not taught in an educational setting, for most people and employees they are founded through life experiences. The Sarbanes-Oxley act of 2002 was focused on making a guideline so there was no question about the ethics required by the investors in order to reinstall trust with the companies and investors. Exon, WorldCom, Adelphia and Tyco are examples of companies that due to unethical behavior and practices collapsed costing trusting investors millions.
Unethical behaviors can happen in accounting because of the high dollar stakes, and higher level pressures. Before the Sarbanes-Oxley act of 2002 most companies did not have outside and independent sources auditing the accounting, or financial statements to make sure everything was done right and ethical. Without the check system in place an employee can doctor the books in order to embezzle money out of the company, or move money into different accounting to show greater financial health than the company is really in. Other Examples of dishonest accounting actions are concealing the figures, cooking the books. With the Sarbanes-Oxley Act of 2002, a company is forced into looking at and dealing with any holes in their security and being active in their ability to prevent any and all unethical behavior as well as make sure the tone from top echo ethical behavior and high ethical standards.
The author of Ethical Guidance and Constraint under the Sarbanes-Oxley Act of 2002, states that one of the main reasons for unethical situations in accounting are due to a lack of education on ethical. Because ethical education is not established and not a major priory it can lead to a lack of employees out there with high ethical standing that will not be misled to participate in unethical situations.
REFERENCES
Orin, R. M. (2008). Ethical Guidance and Constraint under the Sarbanes-Oxley Act of 2002. Journal of Accounting, Auditing & Finance, 23(1), 141-171