...ETHICS IN FINANCE CONTENTS INTRODUCTION ..................................................................... 4 ETHICS IN FINANCE ............................................................. 5 ROLE OF ETHICS IN FINANCE............................................ 5 TRUST .......................................................................................... 6 Aristotelian virtuous ethics......................................................... 7 CODE OF ETHICS ................................................................... 7 ETHICAL BEHAVIOR .............................................................. 8 CODE OF ETHICS IN FINANCE AND ETHICAL BEHAVIOR................................................................................... 8 ETHICS IN FINANCE IN DIFFERENT FIELDS ................... 8 NEED OF ETHICS IN FINANCIAL MARKET, SERVICE INDUSTRY AND PEOPLE IN ORGANIZATON: ......................................................................................................... 9 SOCIALLY RESPONSIBLE INVESTMENT ....................................................................................................... 10 ETHICS V/S FINANCE .............................................................. 10 IS FINACE ETHICALLY NEUTRAL ...................................... 11 CORPORATE SOCIAL RESPONSIBILITY ............................11 CONCLUSION..........................................................
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...Ethics in Finance To help demonstrate why ethics in finance is need the falling of WorldCom is used. In the matter of three years WorldCom went from one of the most successful and promising companies to a bankrupted and absorbed company because of upper management lacking ethics. In early 2001 WorldCom expected and thus projected the use of internet to increase and so they made a significant amount of leases to internet and telecom service providers. However, the internet usage did not increase but crashed causing many of WorldCom’s leases to default. To help save their appearance WorldCom used reserve account to cover operating expenses, making it look as if they made money despite the many defaults. WorldCom did this knowing it would violate transfer rules and the proper use of Reserve Accounts. By the end of the 1st Quarter, 2002, WorldCom had fraudulently transferred 3,062 million dollars. Due to the amount the three internal accountants, who helped with the transfers, grew deeply upset and choose to meet with the SEC, FBI, and U.S. Attorney’s Office on June 24, 2002 to bring forth WorldCom’s fraud. The news of WorldCom’s fraud caused their stocks to plummet leading them to bankruptcy by July of 2002. WorldCom changed its name, MCI Communication, in attempts to come back from the fraud scandal. They were unable to do so and were acquired by Verizon in 2005. The WorldCom case shows how unethical behaviors escalate in a small amount of time. There are five arguments...
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...Buy it on Credit and be True to Your School – Ethics Paper Akhil Rangaraju MG 670 Fundamentals of Corporate Finance King Graduate School Question1: Should Universities enter into agreements to offer affinity credit cards to students? Answer: List down the facts of the case. Banks offer credit cards to students in the hope that if they can’t pay their bills, their parents will. Over a period of time banks also expect them to turn into loyal customer. Ideal Customer: Students are also ideal customer as they tend to carry more balances on their card than other bank customers. This has led to increase in burden of student debt which may impair their future credit capacity. This is more so because banks employed questionable marketing and sales tactics to issue credit cards to students. Growing Student Debt: It is also noted that student debt has been growing over a period of time. Not only the number of students having credit card has been going up, the average balance has also been going up over the years. Growing student debt causes serious problem for them in futures. Reasonable Reason for Credit Card: On the other hand, students seem to be getting credit cards to create a credit history and for emergency protection. They also get credit card for convenience and do not max out their credit limits. All these seem to be valid reason for them to have a credit card. Affinity Card: Recently, credit card companies have started issuing affinity card. Affinity card gives...
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...Memo addressing core issues on topic of Ethics in Finance Winter 2011 Hsiu Chang Ethic is useful because it makes business stable and predicable. In a game, a cheater who is not caught will continue to reap huge rewards. However, if the trend continue, it will encourage other players to cheat or leave the game because they are being driven out of business. If a business operator always has to wonder if the other side is playing by the same rule, if a customer constantly wonder if the vendor is overcharging for the invoice, then business slow down, becomes inefficient. However, many cheaters are not caught or punished. "Business Ethics" is the third episode of the fifth season of the television series The Office. One of the female purchasing officer has been sleeping with a vendor in order to get discount for the entire purchasing department, and Outback Steakhouse coupons. When this is discovered, the head of the company turned a blind eye because it is good for the balance sheet (Wikipedia, 2011). Having good ethic provides a clear conscience, and if there was an ethical problem, shared the advantage gained by cheating with the entire team will once again clear the conscience. Ethic in finance is important because it will provide a clear picture of the company. The leader of the company cannot see where the company can go if they do not know where the company is. However, accountant in a non-public company works for the leader and this agents’ fiduciary duty...
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...An Improved Pedagogy of Corporate Finance: a Constrained Shareholder Wealth Maximization Goal by Michael R. Santos , Gina Vega , John T. Barkoulas INTRODUCTION Bloom's taxonomy (1956) has guided pedagogical structure and innovation for half a century in the United States, and its focus on developmental learning remains relevant and instructive for us. The six developmental levels (knowledge, understanding, application, analysis, synthesis, and evaluation) separate basic knowledge acquisition from the critical thinking and analytical skills necessary for making ethical decisions or judgments. Answering questions about business ethics requires knowledge from multiple disciplines, including philosophy, psychology, political science, sociology, economics, finance, organizational management, and law. Analyzing such a vast body of data in ethical frameworks requires the highest levels (analysis, synthesis, and evaluation) of critical thinking as expressed in the taxonomy. Corporate governance, an interdisciplinary subject addressed in all these disciplines, explores the inter- workings of both for-profit firms and not-forprofit firms and is an area requiring business students to evaluate ethical issues when making decisions. Despite the broad responsibility of teaching corporate governance in the finance classroom, the pedagogy of finance has been restricted to ideas derived primarily from economics, statistics, and finance. Competing ideas from other disciplines are generally...
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...ETHICS IN FINANCE Meaning of Ethics Ethics is the study of human behavior which is right or wrong. In general, ethics means doing right things to others, being honest to others, being fair and justice to others. Even ethics in finance is a compartment to general ethics. Ethics are very important to maintain constancy in social life, where people work together with one another. In the process of social development we should not be conscious of ourselves but also conscious to take care of others. WHAT IS FINANCE Finance means fund or other financial resources; it deals with matter related to money and the market. The field of finance refers to the concept of time, money and risk and how they are interrelated. Banks are the main facilitators of funding. Funding means asset in the form of money Finance is the set of activities that deals with the management of funds. It helps in making the decision like how to use the collected fund. It is also art and science of determining if the funds of an organization are being used in a right manner or not. Through financial analysis, any company or business can take decision in making financial investments, acquisition of company, selling of company, to know the financial standing of their business in present, past and future. It helps to stay competitive with others in making strategic financial decisions. Finance is the backbone of business; no business can run without finance. WHAT IS ETHICS IN FINANCE Ethics in finance...
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...Role of Ethics and Compliance As learned from the company’s website, Microsoft was founded in 1975 and has the NASDAQ symbol "MSFT". This company is the worldwide leader in software, services, and solutions. Because having a strong presence and leadership in the software engineering industry, Microsoft has a need for the role of ethics and compliance in the organization’s financial environment. The consequences can be permanent if not for the success history of the finance ethics and compliance team. The primary focus of Microsoft finance team’s mission includes providing world class financial leadership to optimize long term shareholder value as well as be recognized in the industry as setting the utmost highest degree of leadership in using innovative processes, tools, and systems. Microsoft Finance team members uphold values in each role of the company in order for each job be in compliance with the ethical policies and guidelines that includes finance service, integrity, results, and assisting other individuals be successful through their efforts. Ethical and compliance practices are maintained through Microsoft’s Overview that includes the Finance Code of Professional Conduct, Shareholder Accountability, Corporate Policies and Guidelines, and Board of Directors. Microsoft’s Chief Executive Officer (CEO), Chief Financial Officer (CFO), Corporate Controller, and the employees of the finance organization uphold important and prominent roles in corporate governance that ensure...
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...Home | Contacts | Feedback About DEI * Background * Staff Organisation * Permament Secrerary's Office * Legal Department * Ethics Education * Finance and Administration IAF Resource Center Legal Department The Legal Department is the policy arm of the Directorate for Ethics and Integrity. Its main objective is to strengthen the Legal and Policy framework to fight corruption and rebuild ethics and integrity in Uganda. With regard to the coordination role, the Legal department is responsible for tracking the enforcement of anti- corruption policy and laws. This exercise is expected to ensure compliance and to enable the identification of challenges that law enforcement agencies face during enforcement and, also a mechanism to identify lacuna in the existing law and, new and emerging issues in the fight against corruption that would require new legislation. Functions of the Department * To Provide legal counsel to the directorate on matters related to the fight against corruption and ensuring ethical governance * To review existing anti- corruption legislation and policy, with a view to proposing ammendments * To identify new and emerging issues in the fight against corruption and develop new legislation or measures to address the same * To ensure compliance with anti- corruption laws and policy by monitoring their implementation * Ensuring that Uganda's legal and policy frame work is in harmony...
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...Louise’s Finance Code of Conduct Conducting business relations on an ethical level are of the utmost importance to Louise’s Finance. All those who affilliates with Louise’s Finance will conduct business fairly, ethically and in compliance with all laws and regulations. Louise Finance is committed to ethical behavior and has a code of ethics that will be at the enforced on every level of our business. We will keep this code of ethics current by reviewing it annually. Standards and Procedures Louise Finance employees are responsible for the integrity of their own work. Each employee must acknowledge receipt of our Conduct and confirm that they will follow the standards. This will measure the implementation of or company code of conduct and how well the value of integrity is integrated into the culture at Louise Finance. It ensures that our Code of Conduct is being applied uniformly and provides a channel for employees to raise issues. Since our Code of Conduct and the supporting policies and procedures may change from time to time, our employees are responsible being up to date with the current laws, rules, regulations, standards, policies and procedures that govern their work. They are also individually responsible for reporting wrongdoings. If a law or company policy has been broken, employees are required to report it promptly. If an employee fails to comply with applicable rules and regulation, he or she risks being terminated. All employees will avoid any action, that might...
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... As time passes norms evolve, causing accepted behaviors to become objectionable. Business ethics and the resulting behavior evolved as well. Business was involved in slavery,[4][5][6] colonialism,[7][8] and the cold war.[9] The term 'business ethics' came into common use in the United States in the early 1970s. By the mid-1980s at least 500 courses in business ethics reached 40,000 students, using some twenty textbooks and at least ten casebooks along supported by professional societies, centers and journals of business ethics. The Society for Business Ethics was started in 1980. European business schools adopted business ethics after 1987 commencing with the European Business Ethics Network (EBEN).[10][11][12] In 1982 the first single-authored books in the field appeared.[13][14] Firms started highlighting their ethical stature in the late 1980s and early 1990s, possibly trying to distance themselves from the business scandals of the day, such as the savings and loan crisis. The idea of business ethics caught the attention of academics, media and business firms by the end of the Cold War.[11][15][16] However, legitimate criticism of business practices was attacked for infringing the "freedom" of entrepreneurs and critics were accused of supporting communists.[17][18] This scuttled the discourse of business ethics both in media and academia.[19] Overview[edit] Business ethics reflects the philosophy of business, of which one aim is to determine the fundamental purposes...
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...Orissa Stewart Liberty University Business 530, Faith Integration Ethics and business is a practice that most businesses follow, although ethical and moral issue is a debated issue. Ethical and moral issues extend far beyond on treating others in a certain way. It begins with a belief system and faith in God. Once a person develops a relationship with God, they usually change for the better. In addition, the words ethics and morality in religion and theology may have been the cause for academia in the field of finance and economics which stray’s away from identifying ethical and moral considerations in the practice of finance and economics (Gupta, Rakesh, & Sukumaran, 2013). Unfortunately, if you are a Christian in the business world then the possibility of compromising your faith increases from even the smallest decisions such as prayer in the workplace. Whatever the case, there are numerous opportunities to compromise faith when it comes to business ethics. Christians need to be aware of this weakness and fight becomes hard to stand firm. According to authors Gupta, Rakesh, Sukumaran, and Aswini (2013), Ethics and morality in finance, discusses the issue of ethics and morality in finance that extends to accounting in the area of marketing. Regardless if you work for yourself or someone else Christians will face the time when they have to make decisions that can affect the way their walk in Christian faith at work. Mark 7:20-22 (ESV) And he said...
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...NIIT University | Ethics in Finance | | | Aman Sawhney | | | Contents Introduction 1 Why Ethics Matters 1 Ethics and Ethical Dilemma 2 Creating an Ethical Environment 3 Reasons for Unethical Behavior 4 Ethical issues in Finance 4 Financial Statement 5 Fictitious Revenues 5 Off-balance Sheet Financing 5 Hidden Reserves 5 Hostile Takeovers 6 Insider Trading 6 Introduction Ethics in general is concerned with human behavior that is acceptable or "right" and that is not acceptable or "wrong" based on conventional morality. General ethical norms encompass truthfulness, honesty, integrity, respect for others, fairness, and justice. They relate to all aspects of life, including business and finance. Financial ethics is, therefore, a subset of general ethics. Ethical norms are essential for maintaining stability and harmony in social life, where people interact with one another. Recognition of others' needs and aspirations, fairness, and cooperative efforts to deal with common issues are, for example, aspects of social behavior that contribute to social stability. In the process of social evolution, we have developed not only an instinct to care for ourselves but also a conscience to care for others. There may arise situations in which the need to care for ourselves runs into conflict with the need to care for others. In such situations, ethical norms are needed to guide our behavior. As Demsey (1999) puts it: "Ethics represents the attempt...
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...Global Finance Environment Paper FIN/403 May 4, 2008 Globalization refers to the merging of national markets into one huge global marketplace. In today’s market, selling internationally is much easier due to falling barriers in cross-border trade. Now businesses don’t have to be industry giants to operate and succeed in global markets. Although it can be beneficial to offer a standard product that can be used worldwide, significant differences still exist between national markets such as cultural differences, consumer taste differences, product preferences and legal regulations. It is important to define and understand these differences when merging into national markets. Globalization is inevitable and it’s happening at an astonishing speed in nearly every market possible. The technology era that we are in has enabled businesses to join forces like never before and we are seeing significant changes in the global marketplace. There are main drivers in globalization and this paper will define three of them, as well as describe the risks associated with financial investing, and explain the importance of cultural sensitivity and ethics in global finance. Drivers of Globalization Market drivers Domestic markets are saturated and growth opportunities are often times limited. Expanding globally opens up many new opportunities allowing for real growth within a business. The following lists in detail the specific market drivers that play a key role...
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...Organizational Structure Template |Name William Phillips |Date Completed 11/30/2014 | Purpose and Overview The purpose of this assignment is to help you prepare for successful, enjoyable participation in a positive team experience for Units 8–10. In this assignment, you will research and compose descriptions of a fictitious anonymous company's five functional areas. Further, you will explore organization’s code of ethics and executive summaries of reports to understand what they are and how to compose them. Your main task is to develop a broad overview of the mission and purpose to be prepared to participate in the team activity for Unit 8. Note: Your assigned role for the team is not needed or related to this assignment. As you complete this assignment on this template, refer to information provided in the unit 7 studies. Specifically, utilize these provided resources and perform research to satisfactorily complete this assignment. • Teamwork Activity Challenge. • Organizational Structure reading. • Functional Areas Managers reading. Important: This assignment is due Sunday of week 7. Learners completing it on time will be performing Unit 8 as part of a team. Learners without a successful, timely assignment cannot be on a team. Important: Utilize paragraph structure in your document, not outline format, and support your ideas with...
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...Business ethics are a pivotal aspect in strategic business finance, or finance in general. Poor ethical practices and immoral acts have been conducted across many years by many individuals and businesses in the business world in regards to finance. This paper will focus on two of the more well-known ethical issues that occurred in the late 1990s and early 2000s, Enron Corporation and WorldCom. This paper will focus on the factors that led to the demise of the corporations, as well as the violations that occurred within the accounting practices, and the specific ethical violations in strategic financial planning. To summarize, the largest contributing factor to the demise of Enron Corporation and WorldCom was simply corporate governance failure (Stanford GSB Staff, 2016). The smaller factors that led to the governance failure were such things as increases in executive compensation and stock options, jumps to incentives to manage earnings, and major shifts in the structure of auditing firms. These changes directly led to the loss of money and public confidence. These reason can be classified as nothing other than management greed. This can be validated by the statistical increases in worker compensation which rose forty-two percent in the 1990s as well as corporate profits rose eighty-eight percent, the standard and poor index increased two hundred and forty-eight percent, as well as CEO compensation rose four hundred and sixty-three percent during this timeframe (Stanford GSB...
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