We use cookies to give you the best experience possible. By continuing we’ll assume you’re on board with our cookie policy

Impact of Unethical Behavior Article Essay Sample

essay
  • Pages: 3
  • Word count: 561
  • Rewriting Possibility: 99% (excellent)
  • Category: finance

Get Full Essay

Get access to this section to get all help you need with your essay and educational issues.

Get Access

Introduction of TOPIC

Potential acts leading to unethical practices and behavioral in accounting is evident. These acts are in violation of the Sarbares Oxley Act of 2002 (SOX). A recent article on the student website is reviewed to identify potential factors leading to unethical practices and behavior. The article analyzed is called “Becoming a More Relational Firm in the Post-Sarbans-Oxley Era”.

As expressed by the article, the effects of SOX has been considered by companies in which use auditing services as their main source of business (Jelinek, Jelinek, 2010). SOX has caused agencies to have a strong battle obtaining clientele. The SOX act has changed provisions in which disallow an agency to sale services directly to company personnel (Jelinek, Jelinek, 2010). This has resulted in agencies having to go an outside committee to sale services or products (Jelinek, Jelinek, 2010). The act also requires the auditor agencies to resale from services after 5 years and disallows them to seek employment with a previous client within of a year of last audit (Jelinek, Jelinek, 2010). These new rules have caused the agencies to have very strict rules of operation procedures. With the information obtained in the article, is has been relevant that auditi

ng agencies are having difficulty rendering services. So if auditing agencies are not doing auditing

Sorry, but full essay samples are available only for registered users

Choose a Membership Plan
then companies are use internal auditors. With internal auditors the unethical practices and behavior chances have increased.

These are however situations even with an auditing agency that can lead to unethical practices and behavior. Thus misuse of funds received, is a type of unethical practice. Potential scenarios in which unethical practices and behavior can be encountered is identified. When funds are used for items other than authorized, the funds use is unethical. A situation that could lead to misuse is when a company is short of funds in one area and to finance another activity, the company uses other funds. This leads stock-holders in a direction of misconception of funds, thus causing a false picture of financial health. Another situation of unethical practice and behavior is the hiding of liabilities or debt. When financial statements do not report a debt or liability, again companies financial health is misrepresented. The practice of hiding liabilities or debt could be to make the company look better to investors or creditors. The neglect of information would cause debt to income ratio be more favorable.

In summary an article was analyzed. The article offered information pertaining to auditors having to change methods to become complaint with SOX. With the strict procedures, the auditors are not rendering services as much as before act. Auditors might decrease sales because companies have chosen to use internal auditors to detour from dealing with the changes. This being said a company could have potential risk of unethical practice or behavior. When this happens unethical practices and behavior will be caught in a manner that has already of cause long-term effects. To improve accounting practices, auditors of outside business will need to be hired to be able to catch misuse of funds and lack of reporting liabilities.

References

Jelinek, K., & Jelinek, R. (2010). Becoming a more relational firm in the post-sarbanes-oxley era. The CPA Journal, 80(9), 64-64-67. Retrieved from http://search.proquest.com/docview/756960959?accountid=35812

We can write a custom essay on

Impact of Unethical Behavior Article Essay Sample ...
According to Your Specific Requirements.

Order an essay

You May Also Find These Documents Helpful

Studying accountancy and finance

Studying accountancy and finance in the UK universities is a great opportunity for me as they are recognised for having an international excellence in both teaching and research. On top of that, the UK hosts strong accounting and finance professional bodies, which lead the world in terms of the development of accounting standards and drives me wanting to study in the UK. I have always enjoy subjects which focus on numbers and mathematics. In addition to my studies, I participated in an International Kangaroo Math Competition Malaysia secretariat for two consecutive years and obtained the honorable mention. This tested my mathematical skills and passion towards numbers. It motivates me to learn more and I had grown fond of accounting and finance since it is also involve numbers. Furthermore, I have gained experience and valuable skills from branching out into other fields in my secondary school and college. For instance, I...

Shareholder wealth maximization

Corporate Goals: shareholder wealth maximization. Explain the assumptions and objectives of the shareholder wealth maximization model. Shareholder wealth maximization is considered as a fundamental model that guides the half of the world’s market and corporations. As stated by Eiteman, The Anglo-American markets are of the view that the firms should follow SMW. As discussed in Chapter 4, Shareholder Wealth Maximization model assumes that in order to increase the wealth of a firm, the business managers should “maximize the return to the shareholders” for a certain level of risk. Similarly, the risk to the shareholders should also be minimized for a given rate of return. The main objective of this model is to increase the stock price which would in return increase the net worth of the individuals who own the stocks in the firm. However, this model also enables the corporations to take into account the risk factor while making...

Manage budget and financial plan

A budget is an estimation of revenue and expenses over a specified future period of time. It is compiled and re-evaluated on a periodic basis. The master budget is the aggregation of all lower level budget produced by a company's various functional areas and, also includes budgeted financial statement, a cash forecast, and a financing plan. A master budget is the central planning tool that a management team uses to direct the activities of a corporation, as well as to judge the performance of its various responsibility 8centers. The master budget includesː Sales budget Production budget Cash budget Capital budget In task ː 1 the role is a manager of sales center A based in Adelaide. the sales manager have provided a master budget in which total expenses was $ 547250. the center A has the large staff the center is expected to sell as much volume as the other...

Popular Essays

logo

Emma Taylor

online

Hi there!
Would you like to get such a paper?
How about getting a customized one?