Chapter 3: Ethics at Work

http://www.camagazine.com/archives/print-edition/2006/aug/features/camagazine8392.aspx


Summary:
In this article fromt he CAmagazine, the topic is on ethics at workplaces. There was a case where an employee found suspicious pay cheques to employees where he didn't know. After consulting with other co-workers, he decided to report this situation through the company's ethics hotline. It turns out that the boss made up fictitious job positions and pocketed the extra pay cheques to his own account. It turns out that many employees who account similar situations does not do anything, in fear of being called backstabbers or getting fired. The article continues to state how important ethics is at work due to leading to fraud and resulting in fictitious accounts being journalized and recorded for.

Connections:
In our accounting textbook on page 163 there's a side blog talking about ethics in accounting. It states that many adjusting entries require estimates and the exercise of judgement by management, which provide opportunities for managers to manipulate both balance sheet values and income amounts. Relatively speaking, the accounts can be changed accordingly. Thus, this can lead to fraud, inaccurate income statements which defect decisions made based on income statements such as evaluating a company's period performance. The book asked the reader to think about what they would do in a similar situation. Thinking about who will be affected by your decision (including yourself), and how they will be helped or hurt by your decision help structure the person's understanding of the situation and make an ethical decision in context of these effects.

Conclusions:
If I was placed in a situation similar to the article on the CAmagazine, I think I would do the same as the employee, reporting the boss. It might be in my character to not care as much about having my job kept after reporting my boss, at least not at the moment. It would be in my nature to report something that I think is suspicious. I may be called a backstabber or a whistleblower, but if it is for the betterment of the company, then I believe is worth it. I think ethics in accounting or any other work force is extremely important because it determines the atmosphere and the kinds of people at work. Most importantly, it will affect greatly to the income value, as fraud might lead a company to bankruptcy. I think a better security system in the accounting software would help reduce the amount of fraud in a company, as everything is computerized through each transaction and automatically placing the numbers in the correct accounts.