Financial Ethics

Financial Ethics

Introduction

Financial Ethics has been becoming one of the major concerns of every organization. Most of the people consider 'financial ethics' as an oxymoron. The much popular cases of Enron, Ahold Tyco, ABB, Bernard Madoff investment fraud and World Com are believed to be the major examples of the corporate misconduct. The question is are there any ethics in financial reporting, budget making, debt or equity financing , investments and the capital management activities being performed by corporate entities. Accuracy of information presented by the employees is crucial factor. Employees face ethical dilemma, between personal monetary gains and organizational goals. Understanding the importance of ethics in the financial mattes companies have made separate financial code of conduct for the employees working in the finance department to ensure that the financial matters are being dealt properly and according to the standards of the company. This provides a code of conduct for the employees and helps them do their job in the best interests of the company.

Discussion

Q#1 Financial Practice and Organizational Values

Because of the increasing need for ethics in business practices, having ethical operations has become one of the cores values of most of the business enterprises. Hence all the business enterprises make sure that they observe these ethics in their financial operations. Most of the organizations split their core values into meaningful terms and let every part of the management of the company know what the values mean in terms of their job requirements. The management has to make sure that the shareholders' wealth is being used properly. The process and the concentration of budget spending have to be in conformity with the company values. The values of the company will direct its decisions regarding financing i.e. debt or equity financing. An increasing use of debt may turn the company to ...