Effect of Unethical Behavior Article Analysis

In: Business and Management

Submitted By tmurphy1984
Words 397
Pages 2
Effect of Unethical Behavior Article Analysis Travis Murphy
August 17 2013
Professor Kelly Bair

A very common example of an unethical accounting practice is the misrepresentation or false recording of figures. Accountants will do this to cover up situations and complications that have hampered the company. Accountants believe that the occurrence or occurrences will soon improve so that falsifies the numbers to put a band aid on the wound until it hopefully heals. What occurs sometimes though is if the numbers were recorded accurately and were communicated through management, the company would most likely recover sooner. If the band aid is put on the issue for an extended period of time there might be no recovery from the issue and the accountant could be fired, or worse, the company could go under. Another situation for misrepresentation of figures could be from hiding money, which is fraud, in relations to taxes or personal gain. The consequences for this are of course a hefty fine and imprisonment. Companies do this very frequently but not all get caught. Companies and accountants will do this to try and squeeze every dollar into their budget and in to their pocket at the end of the year. But thanks to the Sarbanes-Oxley Act of 2002 accountants and company have no choice but to be more accountable for their actions. “Since its enactment in the summer of 2002, the Act has effected dramatic change across corporate America and beyond, and is helping to re-establish investor confidence in the integrity of corporate disclosures and financial reporting (Donaldson, 2005)”. Companies and accountants can still find loop holes in the system but the challenge will be far greater and the consequences much steeper. This Act has been active for 11 years now and the standards are familiar and recognizable but due to it being in effect over a decade…...

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