Question

Debate the unethical behaviors found in the accounting profession and your suggestions for prevention of these damaging behaviors.

With various high-profile examples of unethical behavior in the financial and accounting profession that negatively affected employees, investors, and the entire U.S. economy, explain your position on teaching ethics to accounting students and professionals. Is it "buyer beware," or do you advocate for more checks and balances over financial practices?

What is one example that you read about that caused massive financial stress on the markets or to the affected employees and investors? Offer suggestions on how you think this scenario could have been prevented. Be sure to cite your sources.

Answer 1

Q1)Unethical behavior is defined as an action that falls outside of what is considered morally right or proper for a person, a profession or an industry. Individuals can behave unethically, as can businesses, professionals and politicians. Unethical behaviors can damage a company's credibility, causing the business to lose customers and ultimately shut down. These unethical behaviors can be found at any individual professional background workplace in different ways such as:
•Making it psychologically unsafe to speak up
•Applying excessive pressure to reach unrealistic performance targets
•Not making ethical behavior and integrity a routine conversation
•Not setting a good example as a leader or accounting professional
In order to prevent these damaging behaviors accounting profession should follow some tips below :
a)Create a Code of Conduct- a company written code of conduct provides employees and managers with an overview of the type of conduct and behaviors the company expects. Which outlines what behaviors could be unacceptable and the procedures that can be taken if violated.
b)Lead by Example- As an employee you see business owners and managers as role models to take direction on how to conduct ethically. Reinforce Consequences- If employees act unethically business owners and managers should hold them accountable which mean take necessary procedure to terminate whoever violate code of conduct.
c)Show Employees Appreciation-Loyal employees will not act unethically, encourage loyalty and enforce the code of conduct always.
d)Give lectures- Giving ethics training to provide motivational speaking, videos and handouts to show how importance ethics in the workplace it is.
e)Create Checks and Balances- create a system of checks and balances to minimize the opportunities for unethical behavior.
f)Hire for Values- Employers should prevent unethical behavior by seeking candidates with good values and capable of handling different tasks under the code of conducts.

Q2)
Teaching ethics to accounting students can lead them to cultivate their virtues and eradicate their vices while helping them greatly to nurture strong moral character and integrity which is beneficial to the profession, society and a business entity. This could help for new generation accounting students to learn about the mistake of other companies and to ensure what measures to take in order to avoided.
case example:
The Wells Fargo Fraud scandal committed per employees by creating savings and checking account without the consent of Wells Fargo’s client. Many clients noticed the scam due to a suspicion “charged unanticipated fees” and getting unforeseen credit or debit cards or lines of credit . Since 2013, Wells Fargo management knew about the existence of unethical and illegal issues. However, no public disclose were done due to CEO John Stump told a U.S. Senate panel, “the amounts involved were seen to be immaterial to the bank’s size” . Senior management as well failed to change any of the fraudulent suspicion to the “incentive program” before the regulatory actions took place. Same action was taking the management accountant who being aware of the unethical and potential illegal practices ignore all procedures to take appropriate steps to prevent the problem instead it remains silent

Q3)
This kind of problems happens due to trusting CPAs and auditors on taking care all the issues within the company. As reported in Wells Fargo fraud case, even the accountant was aware of the unethical situation and did nothing to prevented. Based on this case, it is important for the company to ensure that CPAs and auditors follow all regulations to avoid unethical behavior. Each time that an unethical accountant deliberately breaks the rules and regulations to manipulate the information presented on the financial statements to illegal advantage, those financial statements become less and less useful.
To prevent such ethical dilemma from happening companies should make sure that existing code of ethics is fully under compliance and emphasis in Sarbanes-Oxley on financial reporting. This could help to ensure everyone is complying under all regulations. Ensure that mandatory CPAs or Auditors is done every once a year to help avoid unethical behaviors.