Ethics Article Review
Ethics Article Review The topic of ethics usually revolves around business practices. Included in these businesses practices are accounting and financial decision-making. Both of these require high standards of ethics as many people rely on the information produced by them. The lack of ethics results in misinformation and the lack of trust. This paper will first provide a brief summary of an article that discusses ethics in accounting and financial decision-making. After that, this article will be related to assigned readings and to an organization’s current accounting practices. In addition, there will be a discussion on the importance of ethics and The Sarbanes-Oxley Act in accounting and financial …show more content…
In addition, looking at the bigger picture, the financial market of a country begins to collapse gradually and spirals toward a declining economy (Karthik, 2010). The Sarbanes-Oxley Act enacted in 2002 set new or enhanced standards for all U.S. management and public accounting firms and public company boards. This bill was created in the wake of huge accounting scandals like Enron. The act contains 11 titles, or sections, ranging from additional corporate board responsibilities to criminal penalties, and requires the SEC to implement rulings on requirements to comply with the new law (ECCA, 2011). As the Sarbanes-Oxley holds chief executives and chief financial officers directly responsible for the accuracy of financial statements, organizations are pressured into producing true and accurate information. In turn, accountants and the financial decision makers of the organization are expected to be ethical in their behavior.
Ethical behavior in accounting starts with the accountants themselves followed by the management of an organization. Unethical financial practices may help an organization shine, but eventually this unethical behavior brings down everyone in the organization as witnessed in the huge scandals of Enron and Tyco. ParexUSA although mostly ethical in this case, could save themselves from embarrassment if all financial reporting and decisions are made in an ethical way. Following the SOX rules closely will help them and any company