Question

Topic: Evaluation of Unethical Behavior Concerning Accounting Fraud

Write an evaluation of unethical behavior in the accounting profession. Choose an example of a single company such as Enron, WorldCom, Adelphia, Tyco International, and so on for your presentation. Once you have selected the company, provide the following items in your evaluation of the ethical failures at that company:

Relevant facts of the fraud

Ethical issues involved

Primary stakeholders

Unethical actions taken

Each component of the Fraud Triangle that was present in the fraud

An evaluation of the ethical issues with respect to relevant ethical theories

An evaluation of the ethical issues with respect to a Christian worldview

An explanation of the action you would have taken.

Answer 1

Solution:

Relevant facts of the fraud:

The Bernie Madoff embarrassment (2008) uncovers one of the biggest Ponzi plot in the U.S whereby the organization deceived speculators out of $ 64.8 billion. The real extortion was directed through the organization utilizing the financial specialist's cash to pay the speculators as their benefits. The bookkeepers and examiners of the organization including David Friehling have been reprimanded for commitment in the extortion (Lenzner, 2008). The bookkeepers as a rule led yearly monetary detailing forms equipped for recognizing any types of extortion. Be that as it may, they didn't report any extortion or inconsistencies until the point that the child of Madoff revealed of the supposed fake exercises in the organization. Thinking about the impact of the Madoff's misrepresentation, it was uncover only months after the U.S money related crumple in 2008 (Thibodeau& Freier, 2013).

In this way, the Madoff embarrassment included the deceiving of speculators into void ventures and later taking their speculations with the assistance of bookkeepers and inspectors who endorsed the slanted budgetary explanations of the organization.

Ethical issues involved:

There were different moral worries on the organization money related and venture tasks. Right off the bat, the absence of straightforwardness and responsibility of the speculative stock investments was a noteworthy concern. Indeed, even the organization directed his business tasks truly, however later during the 1990s, it began manufacturing returns through the issuance of false money related articulations (Lenzner, 2008). Furthermore, the organization sold his financial specialists a speculation of thought of incorporated blue chip securities with derivates to fence their dangers. He additionally guaranteed that his techniques were mind boggling for the customers to get it.

In any case, this was only a figment of restrictiveness to the blameless financial specialists. Consequently, Madoff just enticed the financial specialists to supposed profits for their ventures, which was unscrupulous.

Primary stakeholders:

The essential partners associated with the misrepresentation incorporate Bernie Madoff, Frank DiPascalli, and his bookkeeper, David Friehling. The group of Bernie Madoff is another partner professed to be associated with the extortion (Lenzner, 2008). The greater part of the senior administrators of the organization were associated with hiding data with the end goal to take the cash of the guiltless speculators.

Speculations guides are additionally part of partners the misrepresentation including J. Ezra who was a noticeable speculation counselor. He was associated with the running of a feeder finance for the organization.

Unethical actions taken:

The manufacture of the organization's profits framed the fundamental deceptive movement in the misrepresentation. The revelation demonstrated how the organization distorted its monetary articulations with the end goal to draw in more ventures. In contrast to the normal benefits, the speculators were just offered benefits from their very own cash. The activities of the organization were untrustworthy as no speculation designs or exercises were directed. Moreover, the tasks of the speculators' flexible investments were cryptic and did not conform to the SEC divulgence principles (Bayou, Reinstein and Williams, 2011).

These incorporate a portion of the dishonest activities attempted by the organization with the end goal to swindle the speculators.

An evaluation of the ethical issues with respect to relevant ethical theories:

A portion of the significant moral speculations incorporate deontology, utilitarianism, and temperance hypothesis. In view of the Madoff misrepresentation embarrassment, deontology is valuable in keeping the organization from taking part in illicit exercises. The deontological moral hypothesis necessitates that the organization ought to pursue the set good standard. Ethically, Madoff Investment Company had defied the ethical guidelines and directions (Ferrell and Fraedrich, 2014). Nonetheless, the moral worries of Madoff could be satisfactory under the utilitarianism moral hypothesis. This is on the grounds that the hypothesis advocates for activities that will offer the best advantages to the general population. On the off chance that countless were content with the organization, the organization would have escaped with their misrepresentation.

On account of ethicalness hypothesis, Madoff Investment Company disregarded the general culturally diverse temperances including confidence, equity, and straightforwardness.

An evaluation of the ethical issues with respect to a Christian worldview:

From a Christian perspective, the scriptural point of view supports on making the best choice while abstaining from doing all transgressions. This point of view empowers speculation firms including the previous Madoff Investment firms to work sincerely with complete honesty and straightforwardness. Romans 6: 23 say, "The wages of transgression is demise". The Christian point of view requires the financial specialists to maintain a strategic distance from all unscrupulous and inadmissible business rehearses (Bayou et al., 2011). Be that as it may, it enables the sentenced fraudsters to request pardoning in the wake of conceding their blame.

As far as the Christian perspective, the moral concerns incorporated the non divulgence of the mutual funds and manufacture of the monetary proclamations with the end goal to tempt the guiltless speculators.

An explanation of the action you would have taken:

By and by, I would have upheld for the straightforwardness and responsibility in the speculation designs and portfolio. For example, the organization did not embrace innovation as far as enabling the financial specialists to track their speculations. Consequently, I would likewise prescribe for the innovative selection to permit the financial specialists track their interests progressively. Moreover, I would bolster the punishments agreed to the included partners including Madoff and different seniors and additionally $170 billion compensation.

The organization's mutual funds ought to have been worked in consistence with the divulgence standards and guidelines. In this manner, the extortion outrage by Bernie Madoff was inadmissible and dishonest.