Ethics within an Institution

Section A

An accounting fraud is the misconduct that prompted the sanction. Notably, an accounting fraud refers to the misrepresentation of the figures of the company’s financial statements with the aim of deriving benefit at the expense of the company. This implies that the presented figures do not represent the actual performance of the company, because they have been altered for personal benefits that present a false picture of the company.

One of the most significant examples of an accounting fraud was the case, involving Autonomy managers led by Mike Lynch. This fraud affected Hewlett-Packard in its bid to acquire Autonomy Company. It is asserted that Mike Lynch led other managers in inflating the financial statements of Autonomy, hence, overvaluing it beyond its actual amount. Hewlett-Packard paid $11 billion, which was twice the real value of the Autonomy. This means that Mike Lynch and other managers, who had been in charge of Autonomy acquired excessive personal amounts from the exaggerated amounts that represented a false picture about the value of their company. The exaggerations, made in the valuation of the Autonomy, contributed to continued losses even after its acquisition.

Another significant example of an accounting fraud is Dennis Kozlowski’s involvement in similar frauds at the Tyco company. It is worth noting that the Tyco company was one of the largest conglomerates in the US before the occurrence of the accounting fraud. Kozlowski influenced the Chief Finance Officer, Mark Swartz in terms of altering the earnings of the company. This meant that the shareholders of the company were going to receive lesser benefits even in cases, where the Tyco company made enormous profits. Fortunately, the fraud was discovered, though the company had already incurred significant losses that proved almost irreparable. Kozlowski’s was sued for the accounting fraud together with Mark Swartz.

The involvement in accounting fraud bears severe consequences to an individual. One will be fired in any instance, in case it is reported that he or she has been involved in an accounting fraud. Companies are always keen in terms of conducting investigations that would lead them to catch the real minds behind the accounting fraud in the company. Firing is always the first alternative for companies in order to avert the recurrence of such frauds, leading to the loss of finances. Other people near the one involved in the accounting fraud can also be probed with the purpose of determining their involvement in the fraud for appropriate actions to be taken.

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Another consequence for involvement in an accounting fraud is arrest and prosecution. Apart from firing employees involved in accounting frauds, companies also go further to sue the individuals in line with the provision of the law. The individual involved in accounting fraud is always expected in court to shed light on the actual amounts that have been misappropriated in line with the occurrence of the fraud in the company. He or she may also be required to name other individuals who may have been involved in the scandal in one way or another. Therefore, one risks a jail term for getting involved in any form of an accounting fraud.

Individuals involved in an accounting fraud can also be required to compensate the company large amounts of money to pay for their deeds. It is noted that one can be ordered to pay the respective company large amounts of money in order to take it back to the financial position it was before the occurrence of the fraud. This is an enormous punishment as the individual can be forced to surrender all his or her property to the company as a part of the payment for the fraud. This implies that individuals, who get involved in financial frauds, risk losing everything that they own in their lives, leading to unexpected changes in their standards of living.

Section B

In line with the reviewed literature and understanding, ethics can be currently defined as the branch of philosophy that entails the articulation, defending and promotion of the conceps of right and wrong within society. This means that ethics educates individuals concerning actions that would be perceived right or wrong by society, hence, giving them the opportunity to choose the correct actions that would enable them function appropriately and live well with other societal members. Therefore, all members within society, irrespective of their age and gender, are supposed to stick to the rightful means of conduct that would facilitate the growth of society, rather than pulling it backwards with undesirable actions.

Integrity refers to the concept that emphasizes the consistency of actions and overall behaviors among individuals. This implies that one should be able to uphold the same accepted mode of behavior and reactions in any setting. Therefore, one should not operate differently in cases, where he or she is being monitored by authorities. One should maintain the same consistent and acceptable behavior that would promote the organization or the respective setting. Thus, consistency is observed in the trends that an individual is able to do a particular action several times.  

The above definitions have significant meanings in academics, especially to students.

The definition of ethics means that there is a set of conduct, to which students are supposed to adhere in their entire activities. Notably, the definition of ethics means a lot to students as they pursue their academics. It means that they have to start identifying the different demands of their societies in order to determine actions that are perceived good and those that are not wanted within their societies. Therefore, students are able to understand the true meaning of different actions, in which they take part. The definition of ethics means that students are supposed to pursue their academics with a renewed sense of hope and belief that they would make a better society as they grow into men and women. The definition also has an enormous meaning to students as it provides them with a stepping-stone of building an improved society that does not exhibit faults. Therefore, the overall definition of ethics has an immense meaning in academics, especially to students because of its emphasis on what is perceived right or wrong in society. This helps in regulating the behavior of students in their schools and respective courses.

Moreover, the definition of integrity has a vital meaning to academics, especially to students, as it imparts them to the spirit of consistency and accountability in their actions. Consistency is a crucial aspect of a human life, because it ensures that the set targets are achieved in the required manner and at the required time. Students are able to embrace this meaning and remain consistent in the pursuit of their common goal, which is posting higher grades in each of their academic tests. Again, students are able to adhere to the right standards of operation, as this definition would guide them in their overall actions. They are able to remain consistent in terms of their behavior and reading habits, hence, improving their academic work. The definition of ethics has an immense meaning to students as it asserts a sense of responsibility on their part. This implies that they would be more focused, and their actions would not rely on any particular event within their surroundings. They are deemed to uphold the required standards, even as they move into the different fields of the labor market, which demands a high level of integrity in the performance of operations.   

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Section C

Accountants and auditors are always supposed to stick to the desirable ethical expectations within their institutions and overall society.  Eric (2012) affirms that one of the most significant ethical expectations for accountants and auditors is to be highly accountable. They are supposed to ensure that they record all the transactions in the most appropriate manner that would reflect the true picture of the company. Additionally, they are supposed to account for any pieces of material information that they include in the books of the organization to ensure that they are traced appropriately. Accountability as an ethical expectation promotes the accuracy within the organization.

Accordingly, accountants and auditors are also expected to exhibit high levels of fairness. They are required to uphold high levels of fairness, especially when dealing with different departments and individuals within organizations. According to CNBC (2012), accountants are not supposed to indulge in deals that will reflect a higher performance in some departments and lower performance in others. They are supposed to be fair enough and take a neutral position, when dealing with the different departments and individuals working within the organization. Fairness ensures that the unity of purpose is achieved within the organization, hence, promoting the achievement of the required goals.

Firing is one of the most appropriate consequences that an individual, who does not adhere to these expectations, should face. Such individuals are supposed to be sacked immediately, and the certificates of their practice should be withdrawn immediately by reporting to the relevant authorities that are supposed to deal with them appropriately. Instant firing of such individuals would sound as a warning to others, who intend to engage in a similar operation that does not reflect the expected ethical standard. The withdrawal of the certificate of operation would also mean that an individual does not get an opportunity to offer his or her services in other places. Firing such an individual would be an appropriate consequence, as it would also discourage other individuals with similar motives from taking part in activities that do not adhere to ethical expectations of society. This will be a guide to the rest of employees, as they would understand that any mistake would lead them to the same direction of exiting the practice due to firing.

In cases, where the ethical misconduct becomes a norm, the overall profession of accounting can lose its meaning gradually. Individuals and organizations, in turn, can lose faith in the profession and build a perception that the profession of accounting is always aimed at bringing the organization down. This implies that the continuous ethical misconduct can erode the trust and belief that individuals have in the profession of accounting. This will witness a decline in the number of accountants that organizations will be willing to hire for the recording of financial statements. Some owners of organizations would prefer to manage their own affairs with the help of their family members because of the loss of trust in the entire accounting profession.

Individuals pursuing accounting as a career would also be perceived negatively by the entire community in cases, where there is the recurrence of the ethical misconduct. The society would perceive all accountants as “thieves” and individuals, who cannot be trusted to hold anything. All accountants, even those, who have never participated in stealing any property, would be tagged thieves that cannot spare anything they come across. They would walk with the tag everywhere in society, and they would find it difficult to eliminate it from the minds of societal members. Therefore, accountants would not be comfortable to operate in a normal manner within their own society, because of the negative tags acquired from the recurrence of the ethical misconduct.

Section D

Upholding a positive standard for ethical behavior and integrity would be extremely advantageous to me. Notably, adherence to positive ethical standards and integrity can help all other members of the society to bestow their trust on me. This implies that I would be open to more opportunities that come along in society, as everyone would be quick to endorse me toward that course. I would be entrusted to participate in significant events aimed at improving society. Therefore, upholding a positive standard would give me leverage in society as it would offer me a wide range of other opportunities as compared to those, who do not observe these standards.

The university would also benefit effectively from my adherence to the required standards of ethics and integrity. The university would benefit from being credited as a higher educational institution with a high level of discipline and integrity. Its students would be respected in all sectors within the country, and they would be able to use the university name to access different opportunities. Thus, the university would be a better place to attract more students, who would come with the aim of acquiring values such as integrity and the required level of ethical standards.  

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The future employer would also benefit from the adherence to the desirable standards of ethics and integrity. The employer would benefit because of the increased levels of transparency and accountability that would be achieved within the organization. The employer would lay back and enjoy the benefits of an effective job performance that accounts for each transaction within the organization. This implies that there would be no incidence of preventable losses within the organization, and the employer would be in a better position to enjoy higher profits emanating from business operations. Therefore, the employer would be one of the greatest beneficiaries, because he or she would not witness the pressures associated with employees, who fail to work in line with the required ethical standards.

My profession would also be at an advantage in cases, where I adhere to effective ethical and integrity standards. It is significant to note that my profession would be in a better chance to advance accordingly. Everyone always looks forward to the development of one’s profession to the highest levels as desired. My profession would progress at the fastest rate possible in cases, where I work in line with the required ethical standards. The progress of the profession would emanate from the trust that the employer and other members of the organization would have bestowed on me. Thus, the profession would move gradually to the highest levels that indicate the achievement and movement toward the attainment of the required objectives.

The upholding of the required ethical and integrity standards is also associated with disadvantages. The first key disadvantage is that other employees within the organization could develop hatred toward an individual upholding these standards. Those, upholding ethical and integrity standards, are always perceived as weak and worse individuals, who do not like cooperating with others. They would find it tricky to operate in organizations as different feelings, especially anger and hatred, are shifted to them.

Moreover, upholding effective ethical and integrity standards is disadvantageous, because it could lead to the loss of effective opportunities. Other individuals, who do not uphold these standards, may get an easier way towards different opportunities, because of their tricks and other mischievous means, while the one, who upholds these standards, would wait for the right time, which may never come.  Thus, once in a lifetime opportunities may be lost so easily because of the belief that the required ethical and integrity standards must be upheld at all instances.

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