Effects of Unethical Behavior
Felice Valdez
Acc-291
April 7, 2014
Joseph Bailey
Effects of Unethical Behavior
What causes unethical practices in accounting? There are a variety of reasons that lead to unethical behavior. Improper training, lack of consequences, and the desire to harm the organization are a few examples. When the opportunity arises greed can take over, causing unethical behavior. Sarbanes-Oxley Act is in place to protect a company and its investors from unethical behaviors that cause loss and destruction in a company. Ethics training, corporate social responsibility programs, helplines, consistent communication from all leaders, and leadership support are useful ways to keep employees informed to uphold ethical standards. Some company’s or people in the company rob customers blind with good intentions and the ignorance and there are no consequences. Greed seems to activate the centers in some people’s brains, conducting the white-collar crimes because no one is getting hurt. Accounting sometimes involves dealing with very large amounts of money, some of which can be easily hidden, siphoned off or removed with little chance of detection (Xaxx, ). Having access to large amounts of money allows for the person in a financial situation to take advantage of taking that money. Ignorance can play a role in accounting crimes but it is no excuse for unethical or illegal actions to take place. Tax law, regulations about insider trading and similar arcane rule books are easily misunderstood, and inexperienced accountants or businesspeople may engage in unethical behavior without even being aware of it (Xaxx, ). Sarbanes-Oxley Act (SOA) was passed in 2002 by Congress as a new system of checks and balances that will leave a significant and long-lasting impact on Corporates and independents public accountants. With this new compliance there is no guarantee that corporate scandals recur. Compliance with SOA and noncompliance punishments is crucial for the solution. Crucial to determining the components of a sustainable solution is determining the fundamental causes of the scandals (Koestenbaum, Keys, & Weirich, 2005). Accountants who audit companies are rotated every five years so relationships are not formed to favor a company. Auditing accountants cannot leave their current