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Unethical Accounting; Computer Associates
“Ethical behavior is basically behavior conforming to generally accepted social norms concerning beneficial and harmful actions. (Griffin & Ebert, 2007, p.58) When heads of large companies choose to run their businesses in an unethical manner, the impact is felt throughout society; the shareholders, taxpayers, the employees, competitors of the company, consumers, and in turn, the economy suffers from the burden.
Many large corporations choose unethical practices, but Computer Associates is the company this paper will discuss. “In order to meet a benchmark set in 1995, Computer Associates reported $500 million in revenue in both its 1998 and 1999 fiscal years.” (CA Scandal, Para. 5 & 6) Of course, this led to large bonuses paid out to several executives which they did not earn. Obviously this ‘free’ money is the incentive to continue the dishonest practice, one could assume since they are in charge of the books they don’t really think they will get caught or maybe truly don’t care. The moment of benefits obviously outweighs any risk.
Unfortunately, when these executives do ‘get away’ with these unethical financial practices, it only encourages them to try it again. “In 2000, Computer Associates booked $1 billion in revenue it never received in order to meet forecasts.” (CBC Money Story, 2004, Para. 3) Computer Associates added days to their month end booking process on new contracts they signed after midnight (and even days after) month-end close. This calendar day ‘stretch’ made it appear the contracts were actually booked within the given month revenue was reported as being earned, though it really should’ve counted as the next month’s revenue.
Computer Associates unethical accounting process hurt many, and made life very difficult for the innocent employees that worked there and had to clean up the mess. I know of this first-hand, as I was employed with Computer Associates from...
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