Defining Financial Ethics Essay

1173 words - 5 pages

Introduction
This report will cover the meaning of Financial Ethics, what kind of accounting practices are considered to be unethical and how a company can overcome problems. In addition this report talks about the use of EBITDA in accounting practices and how EBITDA can be manipulated to show a company’s performance as good when in fact they are suffering. The report will also show how EBITDA and financial ethics can be intertwined with each other.
FINANCIAL ETHICS
Financial ethics is a form of business ethics but with more emphasis on the financial end of the business. To be a trustworthy person in this field it is a requirement that you refrain from bad accounting practices such as aggressive accounting. Aggressive accounting is where numbers are changed in order to make investors/shareholders feel comfortable with their investment. Aggressive account also inflates stock prices using false data to report income, not reporting all the expenses occurred within the company, concealing losses the company experienced, and overall not reporting an accurate financial statement to increase or stabilize the stock price and keep investors happy. This type of accounting practice is unethical and is an outright lie to investors and or stockholders. This type of accounting fraud involves one or more employees or an entire accounting division, modifying , getting rid of or marring accounts so the true information on these accounts are not revealed to stockholders. Why would a company do this type of illegal accounting? Companies do this in order to show they are doing well in order to obtain a higher credit limit with a bank, or financial institution making higher loan amounts available. Another reason is to pump up the share price of the stock, to keep losses from showing so it appears to investors they are a company on the rise and doing much better than they actually are. There are other reasons too such as to cover up any losses due to theft, and to get work related bonuses. If a company looks good on the outside they will attract more investors, have more credit available to them which is why companies are doing these unethical, and unlawful acts of accounting.
In today’s world in every corporation, small business, and healthcare organization ethics are more important than ever. Ethical standards are probably more important in healthcare than in other types of businesses. It is important to realize that many people, the patients, the family and friends of the patient rely on our healthcare system to be upfront and always ethical in their practices. To not withhold any available treatments to our loved ones and to only charge for those services provided. People expect and should receive the latest technological advancements available for their ailment.
Those employed by the hospital/care center or whatever entity they are working for are expected to have the commitment to ethics and reliability. These departments can include the...

Find Another Essay On Defining Financial Ethics

Ethical Behaviour Policy And Practice In Organisations

1900 words - 8 pages 1 ETHICS 1.1 Defining ethical behaviour Ethics is a philosophical term derived from the Greek word "ethos" meaning character or custom (Sims, 1992). Ethical behaviour is behaviour that is morally accepted as good and right, as opposed to bad and wrong (Wood, Zeffane, Fromholtz & Fitzgerald, 2006). An ethical dilemma requires a person to make a choice between competing sets of principles based on how morally good and right as opposed to how

A Discussion on Different Types of Ethics

3117 words - 12 pages , religious and philosophical beliefs, and they guide judgment regarding bad or good behavior. One rule that is used in defining ethics is the Golden Rule. In its simplest form, the Golden Rule can be stated as, “do unto others as you would have them do unto you”. However, can this rule be considered as a universal standard for ethics? Yes, the Golden rule offers the most universal standard of ethical or moral conduct. According to the Josephson

business ethics

1589 words - 6 pages Main Idea of Ethics - Ethics and morality are synonymous. The pursuit of creating a moralcompass dates back to the Ancient Greek philosophers of Plato and Aristotle, who simply askedwhat it was to be right and wrong. In ethics, a premium is placed upon defining what is good.Different approaches to defining what is right have evolved over the course of contributingphilosophers, governments, and religions all proposing their own lens for what it

Milton Freedman's Business Ethics

2767 words - 12 pages admirable guidelines for behavior. Ethics are become complicated with other over values such as the problem situation, or an opportunity in which an individual must choose for several actions either the moral are right or wrong. Another way of defining the means of ethics is focuses on disciplines such as philosophy, theology, law, psychology or sociology. There are many of different type of disciplines, institutions, and professions have their

Contemporary Ethical Environment in Information Technology

888 words - 4 pages focus on these professional requirements for ethical behaviour. It will argue that professional conduct is key to averting and resolving ethical conflicts that arise in information technology. The word ethics refers to a collection of principles about right and wrong conduct within a society. Ethical behaviour conforms to generally accepted norms, most of which are universal (Reynolds, 2012). The range of ethical issues in information technology

Ethical issues in Cross Cultural Management

1475 words - 6 pages should give more importance to ethics. Finally, in order to act ethically, the aim and framework of the code of ethics will be studied.First, the classical view believes that the sole responsibility of management is to generate the greatest possible financial return for shareholders. This view argues that to concentrate the organizations resources for social goals is both outside of the expertise of many professional managers, that is, requiring

Leadership and its role in Project Managment

1068 words - 4 pages those who work on the project. A project manager needs to act them the CEO of the project. All the traits from clear vision to a positive attitude help in the lifecycle of the project. Project management concerns the activities of defining, planning, implementing and successfully concluding the implementation of projects (Barko 2002). These are all them same concerns as a CEO.Some CEOs are successful in one organization and not in another because of

About the Sarbanes-Oxley Act

2203 words - 9 pages (Cross & Miller, 2012). These reports project a “feel good” element to community conscience stakeholders and they start to feel an emotional connection to the company. In a way, corporate social responsibility marries corporate governance and business ethics. Companies that can master these three disciplines create the triple threat to a consumer, social, environmental and financial performance (Elkington, 1998). Now we will, examine one case

Military Education

1142 words - 5 pages , military training definitely qualifies. From the beginning of basic training soldiers are given knowledge in many areas. Knowledge is defined as the ability to recall specific methods and processes, as well as pattern and structure previously taught. Knowledge is a vast topic and it is basically up to the person defining knowledge what the standards are. Trainees are taught the specifics of military conduct, ethics as well as a general

Ethical Conflicts that can arise within Companies

2483 words - 10 pages the right thing by raising issues that he saw. His termination could have served as reinforcement to ensure other employees did not express opposing views from management. A second missed signal was the unlikely nature of aggressive financial goals for a huge organization being “just met.” (Jennings, 2009) The most obvious missed item is that of internal functions being conflicted. For example the Ethics department consisted of a lawyer whose

Ethical Behavior, a Myth of the Past or a Necessity for Future Development

2384 words - 10 pages , organizational, contextual or environmental, they all play a significant role in shaping the behaviors of people and thus act as tremendous forces for building the societies we live within.I. Defining the term "ethics"II. Introducing the main factors influencing ethical behaviorsIII. Causes of nowadays' deterioration of ethical behaviorsIV. Examples of personal characteristics and their effects on ethical behaviorsA. Individual CompetitivenessB. AgeV

Similar Essays

Personal, Cultural And Organizational Values In A Global Setting

1330 words - 5 pages , knowledge), instrumental values are modes of behaviors used day to day that help people to reach terminal values (i.e., being helpful). (Nonis and Swift, May/June 2001) Personal ethics/values, tend to guide us as we walk and communicate in the world daily. People often ask what ethics are. There is no one definition. Every society and culture has a different way of interpreting and defining ethics; ethics is the development, understanding

Government Regulations: Accounting Essay

1582 words - 6 pages financial reports. 2. Establishes guidelines for defining the makeup of each type of reporting entity. 3. Identifies types of financial reports for communicating the information for each type of reporting entity. 4. Suggests types of information each type of report would convey.” This statement helps ensure that agencies do include all activities in their financial reports. Displaying financial records also helps ensure the credibility of their

Code Of Ethics Essay

922 words - 4 pages . Morality is only lightly defined by Google; don’t be evil, respect others, and integrity. Much more of the Google code is dedicated to legal matters, such as equal opportunity, drugs/alcohol, safety, confidentiality, security, financial integrity, and obeying the law in general. There is a good portion of ethics outlined, including usefulness, responsiveness, avoiding conflicts of interest, protecting Google’s assets, bribery, insider trading, and

Define Ethics And Social Responsibility Essay

1667 words - 7 pages is and how to use it. These are words for physical items. But then there are words that carry individual definitions developed by life experiences. "Ethics" and its companion, "morals," are example of these types of words. The dictionary definitions are ambiguous at best, stating that ethics are a set of values defining right from wrong. The dictionaries further define ethics as a guide to decisions relating to moral duty and obligations