Effects of Unethical Behavior Article Analysis

Effects of Unethical Behavior Article Analysis

Unethical behavior in accounting

The unethical accounting practices are majorly promoted by employee bonuses; desire to appear successful, pressure to gain financing which are not always legal. These unethical practices and behavior in accounting often go unchecked as a result because the actions may be inadvertently caused by management or executives. The common themes of such practices are that individuals who commit such acts forgo the short term gain of financial success for long term negative consequences (Freedman, 2013).

Altering business documents such as sales receipts, falsifying the number of hours worked, tampering with reports or reporting may lead to unethical practices. Employees including top management misuse organizational assets for their personal gain, such as reams of paper or food they eat or take home from their workplace without payment. These people do not realize that they are not only involved in unethical conduct but also indirectly encourage the same behavior in other employees who observe this conduct. This behavior if prolific can result in the failure of the organization's or company's ability to gain market confidence and long term financial success for (Freedman, 2013).

Ethics and Sarbanes-Oxley Act of 2002

The Sarbanes-Oxley Act went into effect in 2002; it is named for Senator Paul Sarbanes and Michael Oxley. The Sarbanes-Oxley Act of 2002 was established in response to the financial scandals such as WorldCom and Enron. It created a new benchmark and standards for all private and public organizations and companies to make their auditing standards accountable with proper checks and balances. It was created to protect shareholders and the general public from accounting errors and fraudulent practices. It also makes them more accountable for their financial decisions.

Organizations have to coordinate and share with auditors and keep them informed about accounting facts and figures. It lessens the ability for those that could harm the company's compliances, making it accountable for the data accuracy of financial statements. The Sarbanes-Oxley Act of 2002 requires companies and organizations to have an internal control system required with the financial reports, which is designed for financial data accuracy and the confidentiality