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Puspa Gautam

Prof. Corinne Anderson


Acct. 2600
Personal Ethics and Financial Reporting
In some point of the individuals career on any kind of services will have no choice but to make
decisions with possible ethical consequences. The decision could be about personal conduct or
about that of another. Some decisions will be easy because the guidelines are clear and the matter
itself is inappropriate but no harm will likely result. But some other may be more hard to get it
because of the lack of proper guidelines or circumstances are unclear and wrong decision could
carry consequences for other or self. You may comfort a situation that offers no choice but to
make decisions with ethical implications under ambiguous circumstances. Ethics is moral
principles. It is a system that defines right and wrong provides a guiding philosophy for every
decision making.
The rising competition has resulted in increased pressure to cut concerns with companies
looking for new ways to gain a competitive edge. The importance of meeting analyst forecasts
for net income and increased the incentives for personal uses to manipulate their earnings to
meet the forecasts. The rising personal expectations of ethical corporate behavior and the ability
to use the illegal system to be compensated for unethical or illegal corporate actions have
increased the risk of personal and organizational liability.
Its very crystal and obvious that we have been learning and hearing that we should keep
our work and personal lives in distant from each other. While I strongly agree, truly believe an
individuals personal ethics plays a part in every situation, including the workplace. Personal
ethics are not an inherited by birth, they begin to grow at as you grow and acquired from where
you exposed. I grew up in such a royal family where my grand parents and parents both work
hard for everything we had have. Both of my parents highlighted the importance of an education
and we were strongly exposed to a religion that emphasized honesty in aspects, but mostly they
showed me hard work pays off. I am third child from top of my parents among 8 siblings
including me. We all were raised in the same house and chose different paths. Our parents tried
to instill a strong set of ethics into each of us. Lucky for me, I was able to watch and learn from
my older siblings and equal responsibilities to show my good ethics to my younger siblings. This

does not mean we ended up with same ethics, in fact in many ways we are completely different. I
was able to see their successes along with their failures. I took an opportunity to emulate the
positive qualities and avoid the negative. As being said, I am not saying I am completely perfect.
There were many clear examples of wrong things to do, and I still chose to test them out for
myself. But I knew, from a very young age that I felt bad about doing something, I probably
shouldnt do that. However, I strongly believe it was seeing consequences of ones actions that
helped me to formulate different results in the end.
Personal ethics have a huge impact on financial reporting. There are many companies that
rely on hard members to report to investors or a board of directors. Companies rely on the
financial reports prepared by their accountants to be true and accurate to make sound business
decision. Inaccurate financial reporting caused by the unethical or deceptive practices of the
companys accountants can lead to loss of revenue through an exposed accounting scandal, or
worse corporate collapse. To avoid the numerous accounting scam, transparency regarding a
companys accounting methods and practices have increasingly important in general. Another
unethical acts done by the employee of the company is misappropriation of assets. On an
individual employee level, the most common ethical issues in accounting is the misappropriation
is assets. For example, a senior level executive may charge a family dinner to the company as a
business expenses. At the same time, a line-level production employee may take home office
supplies for the personal use. In both cases, misappropriation of assets has occurred. There is a
big pressure to out perform the year prior, make more profit, and have smaller losses. My dad
used to work on the office where they revise the cases related to crimes. He told me the most
people cases were associated crime as dealing drugs, stealing, and physical abuse. Many dont
consider fraudulent financial reporting as a crime, or it is on the tier of crimes or sins. But
misleading numbers to make people happy isnt right, nor it is legal. Falsified information, lying,
and lying about such things are in many cases, felonies.
The second video Typical White Collar Crimes that we were asked to watch is,
unfortunately, more common than one thinks. Once an unethical decision is made, it is much
easier to continue to make additional bad decisions. Its very clear in the video, the man justified
stealing money to help transform his daughters face where she disfigured by accident. Since
then, it became more comfortable and confident to steal more money for other personal life
unforeseen events that called for it.

Since, I started working formally, I encountered many different work environments,


where a system of checks and balances were in place. At first I got confused and thought why
should people be checking other peoples work, do they not trust their employees? As the time
went, I realized the company was doing it to protect themselves as well as the employees. If one
person holds the key so to speak, there are many opportunities to make bad decisions or act
unethically. Example is very clear on the second video, if there were someone else to keep an
eye on the typical white collar criminal there wouldnt be a $ 3,000,000 company loss, or a
lonely man in prison.
I am currently working on the marketing company. I make base salary, a commission,
based on the people I add on the chain-line. I always make sure I get paid the appropriate
commission. I am pretty much confident that the accounting department tracking my commission
records. One time I noticed, my commission was not paid as I recorded on my personal
transaction. In one situation, I was underpaid for the commission, which I caught and notified the
company accountant. It may have been one-time occurrence, but what it wasnt? or what if I was
overpaid every month? Definitely, company would be go on loss. The same situation would be
unfortunate for me, if I was consistently underpaid in my commissions. This is where personal
ethics directly affects financial reporting.