Respond to each classmate with 100 words or more.
This is the question they had to answer.
What are the main ethical issues faced in your industry and business related to finance and accounting that are governed by national and/or state regulators? What reporting is required, and what resources does your organization commit to adhering to the regulatory and ethical requirements?
The industry is the retail industry and it faces different ethical issues regarding finance and accounts. The first ethical issue is the selection of the accounting principle and concept that will be used to prepare the final statements. It affects the net profit disclosed by the company. So, the taxation will also get affected. The second issue is the use of the depreciation method. It can significantly scope of manipulation of the disclosure of taxable profit. So, a company not willing to pay high taxes can opt for accelerated depreciation methods. The third ethical issue is the disclosure of bad assets (credit sales that have become defaults). Writing off of the bad asset, bring disrepute and chaos among the investors. Showing the bad asset in the book of accounts become manipulation and not following proper accounting principles. The fourth ethical issue is the treatment of cash transactions that have gone unrecorded. Its treatment also creates an ethical dilemma.Reporting of final statements such as P/L account, Balance sheet, and cash flow statement are required as per the national accounting rules and regulations prescribed by the government agencies. It should also be in line with the international GAAP.My organization has created a separate accounting and finance function with adequate infrastructure support, manpower, and an in-house team of accountants and chartered accountants. An internal finance & accounting framework is also created to bring control and monitor the process. It brings transparency and prevents any kind of fraudulent activities within the organization. Further, the management also supports whistleblower policy so that it is used as an effective tool to prevent fraud at any level of the organization.
The main ethical issues faced in my industry is misappropriation of assets, fraudulent financial records and destroying information related to financial records. This has become more popular in the corporate world over the last decade. Misappropriation of assets can be committed at any level and it is simply taking funds without permission from the the company. Many companies have created a Loss Prevention Department to promote a theft free environment and ensure that employees are being honest and loyal to the company. For example, a senior level executive charged a family dinner to a company credit card an example of misappropriation of assets. Fraudulent financial records are when the finance department reports misstatements by the company. The intent is to mislead investors to think that the company has more money so that they will invest more money into the company. In a sense this is borrowing money from investors to maintain the business. This may boost the company financial needs for a short period of time, but in the long run the truth will come out causing bankruptcy or the company to go out of business. Destroying information related to financial records is when a company has been caught in embezzlement or fraudulent activity. Usually a person in the financial department will be bribed by a senior executive to destroy records so that evidence is not available to prove fraudulent activity has occurred. Reporting has to start with integrity and courage with someone inside the company to report to authorities to reveal unethical issues. Most of the time companies will attempt to bribe the employee not to go to authorities, but if you are involved with fraudulent behaviors you can be penalized as well. All tax paying citizens have to trust the government authorities to handle unjust decisions. Companies will go decades embezzling money and misleading the world to sustain what looks like a successful business.