This website uses cookies to ensure you have the best experience. Learn more

Ethics In Finance Essay

1144 words - 5 pages

Identify an event or series of events that occurred in the financial marketplace falling within the realm of Financial Management, Financial Institutions and Markets, or Investments that raise significant ethical questions. Analyze the events, public policy responses and their impact on the financial markets and economy at large.

Suppose you are the CEO of a well respected, multi-million dollar energy company. You stand at the forefront of innovation and you are world-renowned for your pioneering efforts in the energy industry. However, due to a series of poor financial decisions, your company is on the verge of bankruptcy. You realize that in order to protect your own interests and investments, desperate measures need to be taken. Just exactly how much are you willing to sacrifice? Are you willing to risk everything? Imagine your company is Enron. Imagine your name is Ken Lay.
Many remember and know of Enron not because of its reputation but because this company filed one of the largest bankruptcies to ever occur in American history. Enron began its reign as a powerhouse company when congress passed legislation that deregulated the sale of natural gas and electricity which allowed Enron to excel among companies in this field. This increased Enron’s stock price up to $90 per share and made it appear to be one of the best companies for stockholders to invest their money into. Enron then decided to create offshore accounts commonly referred to as special purpose entities that would hinder any losses that the company was incurring and also deter taxes since international territories have different laws, and would show how much profit the company was making.
It was then discovered that these offshore companies were solemnly created and used to hide the tremendous losses that the company was suffering while they were claiming to be making billions of dollars in profit. The found out the truth about what was really happening to the tremendously “profitable” company and what the executives were really doing behind close doors. While stockholders believed that their stock with Enron was increasing as time went on, in actuality the total opposite was happening and they were losing money instead. Many stockholders because of the “profitability” of the stock, had put every cent they had into the company that even included retirement funds, to wake up the next day and have it depleted.
This can all be attributed to the unethical practices that were performed by the executives at Enron. It was clear that the company was losing money and that the stockholders should be made aware of these loses but instead they decided to cover up what was happening. This event mislead people into believing that everything was going smoothly and there was nothing to worry about. The executives knew of what was to come in the future and began to sell stocks based on insider information making them richer and not caring that the stockholders were going to lose...

Find Another Essay On Ethics in Finance

Why Are Ethics Important In The Accounting Profession

1374 words - 5 pages Why Are Ethics Important In The Accounting Profession? What does ethics have to do with accounting? Everything, since there have been some recent financial accounting scandals; a few examples being Xerox, WorldCom, Enron, which have generated much unwanted and unfavorable publicity for CPA's, including those working as controllers or chief financial officers for organizations. When you hear the word "ethics," what is the first thing that

How Managers Can Persuade Individuals to Act Ethically

2516 words - 10 pages should identify senior executives from their legal, finance, officers noted several key roles of champions in helping to develop their programs. These included promoting and/or mandating the ethics program, dedicating staff and resources for ethics initiatives and ensuring the autonomy and credibility of the ethics office (Joseph, 2001). The active participation of their leaders is a key advantage in the continuing

Balance and Performance of Gauillermo

614 words - 2 pages Encyclopedia of Business and Finance, ethics in accounting is of the utmost importance to all accounting professionals as well as to those that rely on the services of those professionals. Ethics must play a role during Guillermo decision process. He will have to make hard accounting decisions when he is preparing the budget for the hi-tech process. He will also have to honestly illustrate the profits he is going to be likely to earn under each

US FIN 324 Ethics Article Review

851 words - 3 pages controls are in place to covers those liabilities.References:Albrecht, W., Stice, J., Stice, E., & Swain-Thomson, M. (2005). Concepts & applications. 9th ed. Mason, OH: Thomson.Brealey, R., Myers, S., Marcus, A., & , . (2004). Fundamentals of corporate finance. 4th ed. New York: McGraw-Hill/Irwin.Fraedrich, J., Cherry J., King J., and Chiquan, G. (2005). An empirical investigation of the effects of business ethics training. Journal of

Ethics Video #1

855 words - 4 pages Ethics Video #1 One of the primary struggles in relation to ethics in the business realm (and in any realm of life for that matter) is the art of determining the morality of specific day-to-day issues— especially the gray areas within business finance. Some financial issues, however, are not so gray or they become more black or white to one person after he or she ponders the matter deeply, obtains wise counsel, learns from experience, etc. When

Islamic Financial System: The Sukuk or Islamic Bond

1127 words - 5 pages It is in no doubt that the Islamic finance and banking sectors have grown into a significant market that played a great role and emphasis in the worldwide financial industry. As a matter of fact, the Islamic finance industry presented and showed a stellar development and growth in terms of figures (Hancock, 2013), as Islamic finance is maturing at 10 to 15 percent annually, and there is no indication that such inclination is to decelerate in


3136 words - 13 pages will help cooperative leaders avoid unethical positions and decisions. Such an understanding will help cooperative leaders incorporate ethics more fully into the decision making and management process. Trust and commitment to ethical finance practices provide the basis for cooperation and are essential for people to join in together and work for mutual goals. Without trust, people do not communicate and cooperation is unlikely. People must know

Define Ethics And Social Responsibility

1667 words - 7 pages Introduction: As recently as a decade ago, many peoples,companies or organizations viewed ethics,social responsibility,business ethics only in terms of administrative compliance with legal standards and adherence to internal rules and regulations. Today the situation is different. Attention to them is on the rise across the world and many companies or organizations realize that in order to succeed, they must earn the

Gulliermo Furniture Store Scenario

773 words - 3 pages , especially the hi-tech one. The production data for the flame resistant coating gives Guillermo the exact estimate of making flame resistant and fully treated furniture. He needs to compare this estimate with the actual price he can realize for these products.According to the Encyclopedia of Business and Finance, ethics in accounting is of utmost importance to accounting professionals and those who rely on their services. Ethics will influence

Dunkin Donuts Code of Ethics Analysis

1735 words - 7 pages A code of ethics is a formal document in which is used to assist members of an organization, to know what’s ‘right’ and what is ‘wrong’ in the work place and applying it to their decisions. A code of ethics is a written set of rules or guidelines to help the workers and management ‘conduct’ or direct their actions with its primary values and ethical standards. A code of ethics is important because without it, employees and management wouldn’t

Code of Ethics

2212 words - 9 pages in our offices, but visit our customer’s offices quite often. This model provides a unique challenge for developing a Code of Ethics (CoE); we must take into account the customs and norms of the regions we are working in. The CoE I have developed is based on the following core principles: Responsibility and Integrity, Communication, Confidentiality, Respect, and Sustainability. We must practice our trade with Responsibility and Integrity. We

Similar Essays

Ethics And Compliance Finance For Business

2674 words - 11 pages against "protected classes" as described in the Global Statement of Ethics; retaliation for reporting ethics concerns. Wal-Mart does not own, operate, or manage any factories, however; the Global Ethics Office manages is a guide used a formal process to investigate voiced concerns by a factory employee and take corrective action through the Wal-Mart Ethical Standards Program. The Global Ethics Office is used as a guide and resource for ethical decision

Pepsi Cola Ethics & Compliance Business Finance Report

1830 words - 7 pages like Pepsi-Cola, ethics and compliance standards are provided that need to be adhered to, to stay profitable. Ethics play a big part of any organization. As soon as a company does something that is unethical, or not compliant, they can be on the news in a second. Keeping a company on the up and up will help with profit and stock prices. Reputation is a big deal in the business world. Pepsi-Cola is a good company and remains ethical in the

Islamic Financial Contracts Essay

1050 words - 4 pages before it can play an important part in the worldwide finance. The risk is that the Islamic Finance loses a part of its ethics principles as developing itself. Indeed, even if the gambling is theorically forbidden by the Sharia, one can always build a system avoiding the rule, like it is actually the case with the Salam contract: a short term contract allowed by the Sharia, where the seller realizes a profit from a decline in value of the asset. Works Cited :” It is not from the benevolence of the butcher the brewer, or the baker that we expect our dinner, but from their regard to their own interest.

Darr And His Ethics Essay

649 words - 3 pages Arkansas Governor Resigns over Ethics Issue Arkansas Governor Mark Darr has finally announced he will resign over an ethics scandal that has been going on over the past four years. The state of Arkansas Ethics Commission had found Governor Darr was breaking several campaign finance rules since the year 2010. These actions went against the American Society for Public Administration code of Ethics. A few of the codes that the book mentions