Unfortunately, in recent times, we have seen a number of examples of unethical b
ID: 2629918 • Letter: U
Question
Unfortunately, in recent times, we have seen a number of examples of unethical behavior in organizations, often tied to the organization's handling of finances. Discuss ethical issues facing the top leadership or financial managers in today's corporate environment regarding their approach to the financial matters of the firm. What pressures exist that might encourage unethical behavior, particularly as it pertains to the firm's financial reporting or situation? How might these be mitigated? (You might want to conduct a search to identify examples or to examine actions suggested or taken to help mitigate these instances.)
Explanation / Answer
The financial managers of the organisaions are the custodian of the investors money. They are thee stewards of the investors and they can make the investors lose their money by taking wrong decisions.The top management as well as the financial management have to be unbiased and ethical while handling the financial matters.
A financial maager should ensure that hi spersonal interests shouldnot conflict with the interests of the organisation. They should also protect the confidentiality of all the facts and informations. The financial managers should also be ethical while providing the accurate and timely information to the higher managament. All the facts should be properly reported with all the implications thereof.
The ethical behviour of the employees pretaining to financial reporting and situations is usually encouraged by following factors:
1. The personal interests or greed of the employee or manager seems to be most important culprits of the unethical financial practices.
2. Most of the firms are providing their employee inccentives linked with the performance of the business. This triggers the financial staff to manipulate the performance figures.
3. In some orgainisations there exists pressure from top management to do unethical acts either to reduce ta practices or to increase the stock prices.
4. Unreasonable and agressive financial targets.
The unethical issues in financial matters may be mitigated by taking following measures:
1. Provide ethics training programs to the employees.
2. Ensuring that the objectives and goals established are realistic.
3. Ensuring that proper whistle blowing and other procedures are laid down for solving internal problems.
4. Setting up an effective grievance and compplaint solving mechanism for dissent employees.
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