Question

Discuss scenario where you apply the accounting codes of conduct and your own personal and professional code of ethics. I

Answer 1

Financial managers sometimes must choose between adhering to a personal code of ethics and meeting a CEO's demands. The ethical issue can be black and white, but more often than not there are shades of gray — what's legal and accepted isn't always ethical. At the very least, succumbing to pressure could compromise your personal values. At worst, you could end up in the soup.A CFO and CPA is employed by a private wholesale company and is required by a state to charge sales tax on a sale to a customer, but the CPA directs employee not to do so. The customer is not registered in the state where the sales tax needs to be charged. The CPA feels that no one will catch the missing sales tax money and that he is justified as the President of the Company wants it this way. They are both CPA's and regularly do not charge sales tax if the customer says they are exempt but are not registered in the state, or other excuses. The Controller, also a CPA was terminated for objecting to this, and his replacement goes along with what the CFO and President say.

The Organization Code of Conduct (the code) requires directors, key volunteers, and employees to observe high standards of business and personal ethics in the conduct of their duties and responsibilities. Employees and representatives of the organization must practice honesty and integrity in fulfilling their responsibilities and comply with all applicable laws and regulations.

The objectives of the Whistle-Blower Policy are to establish policies and procedures for the following:

• The submission of concerns regarding questionable accounting or audit matters by employees, directors, officers, volunteers, and other stakeholders of the organization, on a confidential and anonymous basis
• The receipt, retention, and treatment of complaints received by the organization regarding accounting, internal controls, or auditing matters
• The protection of directors, volunteers, and employees reporting concerns from retaliatory actions

IMPORTANCE OF APPLYING ACCOUNTING CODE OF CONDUCTS ARE;

Purpose

A code of ethics guides all managerial decisions, creating a common framework upon which all decisions are founded. This can help to create a cohesive understanding of the boundaries within an organization and the standards set for interacting with external stakeholders. A formal, well-communicated code of ethics can also help to protect a company's reputation and legal standing in the event of a breach of ethics by an individual employee.

Scope

Codes of ethics can cover any scope, from the corporate level to the workgroup level. Corporate level ethics standards speak in grand, idealistic terms, communicating the entire ethical vision of the organization in a single document. Ethical standards for business units or geographical divisions can be a bit more specific, applying to the particular industry or region in question. Codes of ethics at the departmental level often deal with highly specific issues, which are often related to experiences and trends within the department.

Process

Codes of ethics are simple for an executive to create in the privacy of his own office, but an individually dictated set of standards can often fail to achieve its purpose. Involving a wide range of employees from all levels of an organization in the process of drafting and formalizing a code of ethics can help to ensure that all employees are on board with and committed to the standards. Revising your code of ethics from time to time in response to changes in the industry or legal environment can help to ensure that your company's ethical reputation remains impeccable.

Training And Incentives

Ethical considerations are vital in today's business environment, and smart companies do all they can to make their code of ethics relevant and important to their workers. Implement ethics training programs for new hires and existing employees to increase the effectiveness of your code. Tie compensation incentives to ethical behavior to further increase the code's relevance to individual employees.

Considerations

Codes of ethics take on additional importance and complexity in the international arena. Ethical standards differ between countries and regions; international businesspeople must have an understanding of each culture's ethical standards to be most effective, and the company's code of ethics either be written to compromise with foreign ethical standards or to uphold a single code in all countries

WHISTLEBLOWING IS TH FIRST BEST OPTION IN REGARDING REPORTING OF FRAUD

Benefits of Whistle Blowing

Every organization desires honesty from and among its employees. The presence of honesty allows for complete dedication to the organization’s mission and success. By encouraging a whistle blowing culture, the organization promotes transparent structure and effective, clear communication. More importantly, whistle blowing can protect the organization’s clients. For example, if a hospital employs a number of negligent staff members, other, more ethically inclined, employees would need to bring such issues to the hospital’s attention, protecting the organization from possible lawsuits or severe mishaps resulting in a patient’s demise.

There is often financial compensation.
When something illegal is happening around you, there’s a good chance that it is costing someone money somewhere. Many whistleblower laws allow for those who stand up and say that something is wrong to be compensated with a specific percentage of the money that is recovered. That can sometimes be worth millions of dollars.

There are legal protections in place.
Many people worry about retribution and retaliation when they become a whistleblower. There are programs in place that help to protect whistleblowers to prevent retaliation and civil laws allow whistleblowers to file suit against those who try to seek revenge.

3. It is an ethically correct decision to make.
It’s been said that there is a right way to do things and there is an easy way to do things. Whistleblowing is the right way and there is always personal satisfaction experienced when an ethically correct decision is made.