Question

An Overview of Financial Management

Please respond to the following:

• Examine ethical behavior within firms in relation to financial management. Provide two (2) examples of companies that have been guilty of ethics-based action related to financial management.

Answer 1

Ethics are principles based on doing the right thing. These principles are considered as a moral values for business operates. The ethics of Business become very crucial in the practices of financial management.In case of any malpractice, it could be result in losses even closure of business.

The two companies may be Goldman Sachs company and Enron Corpporation.

Goldman Sachs was booked under ethical practices in financial management by the securities exchange commission. They had marketed an artificial collateralized bond obligation (SEC booked the company in the fraud limiting to designing and selling of CDO main cause of Subprime Mortgages crisis). The company asked to pay to pay $550 million in a settlement and VP of was stand liable for the fraud.

Prosecution of Arthur Andersen in concern to Enron fraud in 2002, the allegation of corporate malfeasance in its auditing procedures. Which destroyed the company reputation and business in market in one go.