Effect on Ethical Behavior in Accounting

Unethical behavior in accounting

Billy Taylor III

Acc/291

September, 10, 2012

Mr. MacNaughton

Unethical behavior in accounting

Accounts often use unethical behavior in the workplace. “The American Accounting Association defines accounting as, "the process of identifying, measuring, and communicating economic information to permit informed judgments and decisions by users of the information" (Brooks, 2012, Para. 2). There are several ways to cause unethical behaviors but this article will discuss just a few. First bribery usually comes from upper management putting pressure on accountants usually because lack of funds to secure the company. Second fraud happens either with greed or ignorance that ultimately causes cooperate scandals, such as MCI WorldCom making them to declare bankruptcy.

Bribery

In every company comes greed and sense of power. Upper management sometimes uses their weight to entice accounts to swindle financials to places it does not belong. Since corporations are in such a competitive market unethical bribery takes place sometimes offering pay raises, kick backs, etc. Bribing is done for personal gain whether it is for company status or personal. An accountant can easily over state the company’s values assets or under state their liabilities. Thus, puts the accountant in an unethical situation resulting in dishonest behavior if they follow through with the bribe.

Fraud

MCI world com was involved in one of this biggest cooperate scandals ever causing the company to go bankrupt because they hid tons of debt so it would not show up on the financial statement. To control fraudulent activities within companies the Sarbanes-Oxley act of 2002 is implemented to prevent such scandals. “SOX Act effectively restores the integrity of financial statements by removing a very large conflict of interest that provides consulting services to their clients; these types of relationships became illegal and firms that had audit...