Ethics and Financial Services

ETHICS AND FINANCIAL SERVICES

Accounting, just like any other professionals are required to follow set rules and regulations in discharging their duties. Several ethics and moral values are paramount in effective accounting. These professional ethics in accounting were first propagated by Luca Pacioli but have later been expanded by various federal governments as accounting organizations. However, it is important to note that failure to follow these ethics have resulted to numerous accounting scandals which have resulted to collapsing of once strong organizations. The importance of having high ethical standards in accounting is indispensable since accounting information is vital to shareholders, financiers and potential shareholders in a company(Boatright, 2010).

Failure to adhere to these accounting ethics has resulted to numerous accounting scandals. Majority of these scandals are orchestrated by selfish and greedy persons whose interest’s supersedes the interest of the organization. They usually happen when the stipulated accounting rules and principles are not followed in an attempt to cover embezzled funds. Some of the most recognized accounting rules and principles are contained in the IFRS, GAAP and FASB.

Example of accounting frauds can be unearthed in the Livent Inc. case study. As it is the case in most accounting frauds, fraud in Livent Inc., which was a leading company in theatrical production, was masterminded by Garth Drabinsky and Myron Gottlieb. These two greedy leaders were the architect to the collapsing of this giant in theatrical production.

From the case study, it is evident that these two leaders were tyrannical and abusive to their subordinates which played a great role in ensuring that the fraud remained a top secret. It is also evident that the leaders are self-centeredand single minded. The two leaders had engaged in rapid expansion projects and ever increasing in sumptuous design of the company. As a...