Write a 1,000–1,350 word essay based on the topic you chose in Unit 3. Include t

Question

Write a 1,000–1,350 word essay based on the topic you chose in Unit 3. Include the following in your essay: Identify an underlying ethical issue (like the ethics associated with earnings management decisions). Critique of ethical situation Determine who could be harmed by the ethical situation Assess the potential outcomes of the ethical situation from an accounting perspective Evaluate how these decisions could be avoided or prevented. Include a reference list incorporating a minimum of three credible sources and a title page.

Explanation / Answer

Ans : Ethical issues in todays business are wide in scope and mostly are in universal in nature. Since today's world has turned into a global village, businesses do not know the boundries. Transactions are getting complexed day by day and the way a business should be conducted is also not as easier as it was a decade ago. Ethical issues are found profoundly in numbers in todays business and they can be categorised as 1) Issues relating to Behavioural Ethics 2) Issues related to Functions Ethics 3) Issues related to Managerial ethics 4) Issues related to Cultural Ethics.

Each if these broader issues can be further clubbed under smaller headings like 1) Issues related to behavioural Ethics can segregated improper behavior of employees, Gender discrimination, Sexual harrasment issues, biasdness issues.

2) Issues related to functional ethics can be clubbed under Accounting/ Financing issues, Human resources issues, IT issues, patet issues, relationship between supplier and company, relationship between customer, between government. All the issues which deals in business functions are clubbed here.

3) Issues related to managerial issues can be clubbed together as ethics associated with earnings management decisions, responsibility of management, accountability issues. etc.

4) Cultural issues can be traced as issues arising due to differences between two cultures, biasdness issues, racial issues, caste issues, different religion issues, issues on the grounds of healths, etc.

Ans )

When any ethical issues arises fromaccounting perspective it will have a large and lasting impact on the company and at the stake holder at large. It may lead to the wealth erosion of share holders, it may lead to the bankcurruptcy of the firm, litigation against the comapny and the management who are held personal liable to this outcome. Company may get into a deep financial trouble and company might losse capable human resources and at last company might be shut down. It will have dangerous impact on government as well since company will not be able to pay the taxes to the government. It will have impact on the investors as well. Investors may start thinking that a particular region, industry or a sector is prone to financial scandals, they will stop investing, it will have a dangerous out come on the share market as well. Suppliers and other stakehokders will also have a negative impression about the company.

Ans) These unethical issues can easily be avoided and prevented if every company lies down the do's and donts and encourage its employees to do the ethical work, it should be commomerated right from the top to bottom. Employees at the last should be having right moral for doing the things rightly. they should immediately report any unethical issues to the appropraite authority and try to stop it as early as possible. There should be awareness programm conducted by the business houses, there must be ethics audit checks happening by third party or an auditor regarding the norms and ethical behaviours are being followed by the comapanies and employees or not. Governments may also play a role of auditor. There should be a speacial law made by the government for those industries which are more prone to unethical issues or have a series of history of indulgence into unethical activities into the company, under these law company should be presenting it's business activities in such way so that any unethiocal issues can be sniffed out of it. More or less, It is comopany, indivual at large who should be felt doing things morally. Then you would not be needing any external checks, checks must be made internally, deep in hearts and in mind.

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