Question

Why are Business Ethics Important?

its a Legal Framework Business subject please answers as an essay.

Answer 1

Ethics reflect the value beliefs about what is good, what is bad, what is just, what is unjust, what is right, and what is wrong in the terms of human behaviour in an organisation. Due to the globalization of markets and production processes, business environment have to deal with ethical issues in cross-cultural settings at a vast increasing number. A well developed ethical culture would create a positive work environment that will be helpful to deter to fraud while improving the morale and loyalty of employees. The requirement of international business ethics has been rising steadily along with the growth of international business. Since business ethics domestically have grown in importance along with the power and significance of major businesses, and advanced technologies like the Internet have made international business all the more viable, thus international business ethics take center stage as a major concern of the modern era

Business ethics role are fundamental key components for a company and its success. Ethics plays a significant role in accounting and auditing standards. A poor ethical practice may affects accounting practices and behaviour in business organisation. Some of the impacts of ethics are discussed as below:-

1. Criminal Activities: -Poor ethical practices refers that people are more involved in breaking rules and regulations illegally. An accountant who is following unethical practices can manipulate data to commit tax evasion and fraud

2. Personal consequences:- If ethical practices are not followed it can lead to financial costs and legal punishments. Accountant may be found guilty of professional misconduct because of non compliance of ethical behaviour.

3. Goodwill: - Poor ethics can cause ruin reputation of the global business and break the trust of stakeholders.

4. Reduced usefulness of financial statements: - Unethical practices can break rules and thus may reduce usefulness of financial statements.

5. Employees awareness and creating organisational value: Ethics and compliances will be beneficial in increasing employee’s awareness and thus will disseminate global organisational values

6. Displays public image: Each business has a specific public image, which shows the way in which the public views them. Public image is largely reflected on the behaviour of a company and as business ethics determine behaviour, it plays a significant role in determining public image. Therefore, public image is one of the reasons as to why business ethics are needed to a company's overall success