Essays24.com - Term Papers and Free Essays
Search

Ethics In Accounting And Financial Decision Making

Essay by   •  December 19, 2010  •  812 Words (4 Pages)  •  1,497 Views

Essay Preview: Ethics In Accounting And Financial Decision Making

Report this essay
Page 1 of 4

Ethics in Accounting and Financial Decision Making

Fin 324

February 5, 2007

Ethics in Accounting and Financial Decision Making

In his article, "Beyond Sarbanes-Oxley. Three best practices to adopt in your organization," the author, Neil S. Lebovits, suggests that organizations can do several things in order to ensure their ethical health. The top three practices suggested by Lebovits are to cultivate ethical role models, demonstrate ethical decision-making, and to encourage pushback. This paper will explore these three practices and examine the ways in which they relate or can be applied at my place of business.

The Sarbanes-Oxley Act ("SOX") of 2002 was enacted by Congress in order to provide the Securities and Exchange Commission with increased authority to monitor financial practices of and financial reporting by American public companies and public accounting firms, dictate the way American corporations are governed, and discipline those not in compliance. The Act also created a Public Company Accounting Oversight Board which is charged with monitoring and regulating the auditing practices of accounting firms. SOX addresses several accounting issues, including the financial auditing process and disclosure of financial information and was established in response to major scandals in a number of American corporations and accounting firms a few years back.

SOX goes a long way toward providing financial practices and reporting guidelines for companies. Lebovits suggests that companies can and should do even more to ensure company personnel at all levels behave ethically. The first thing the author suggests companies do is to cultivate ethical role models. These role models should be natural influencers and should probably be part of or work closely with the financial departments of the company. These ethical role models would be openly rewarded for their behavior and perhaps influence others to follow suit. In my law firm, our accounting department is overseen by the chief financial officer, director of finance and the firm's management committee. The managing partner in each of our 27 offices prepares the yearly budget and the office administrators work closely with their managing partners to see that the budgets are adhered to. I can't really say that our firm rewards ethical behavior, per se, but the partnership is certainly rewarded when our revenue numbers are met or surpassed and our expenses come in under budget.

Another suggested practice for organizations to follow is to consistently demonstrate ethical decision-making by its leaders and managers. The adage "practice what you preach" came to mind when reading through this section of the article. Open communication and disclosure of financial information about the company are excellent ways to gain trust and loyalty among its personnel. Law firms tend to be rather proprietary with information and that often gives employees the impression that some things are being withheld. There are "levels" of information that may be disclosed within the firm and there often seems to be an air of secrecy for some reason. As an office administrator I find this frustrating, not because I want more information, but because

...

...

Download as:   txt (5.2 Kb)   pdf (78.1 Kb)   docx (10.5 Kb)  
Continue for 3 more pages »
Only available on Essays24.com
Citation Generator

(2010, 12). Ethics In Accounting And Financial Decision Making. Essays24.com. Retrieved 12, 2010, from https://www.essays24.com/essay/Ethics-In-Accounting-And-Financial-Decision-Making/22697.html

"Ethics In Accounting And Financial Decision Making" Essays24.com. 12 2010. 2010. 12 2010 <https://www.essays24.com/essay/Ethics-In-Accounting-And-Financial-Decision-Making/22697.html>.

"Ethics In Accounting And Financial Decision Making." Essays24.com. Essays24.com, 12 2010. Web. 12 2010. <https://www.essays24.com/essay/Ethics-In-Accounting-And-Financial-Decision-Making/22697.html>.

"Ethics In Accounting And Financial Decision Making." Essays24.com. 12, 2010. Accessed 12, 2010. https://www.essays24.com/essay/Ethics-In-Accounting-And-Financial-Decision-Making/22697.html.