When it comes to being a financial manager, three distinct functions are essential in order to ensure success within the position. These are: investment decisions, financing decisions, and dividend decisions (Pujari, 2015). The first function, investment decisions is crucial because it relates to funds which will be invested into a careful selection of assets. This means the finance manager must ensure that the proper assets are selected in order to ensure the highest rate of return can be seen from the investment. If a poor asset is selected, it can result in the company losing money, which would be reflected poorly upon the financial manager (Pujari, 2015). The second function, financing decisions which is how the company decides how it wishes to be financed. This can be done through debentures or by taking loans and advances. A financial manager must be able to determine what amount is needed in order to ensure proper financing. They …show more content…
The first deals with misrepresentation or misclassifying cash flows. This is done in an attempt in order to pad financial figures that are seen from operating activities or by allocating expenses into financing or investing activities (Ross, Westerfield, Jaffe & Jordan, 2011). In order to avoid this ethical issue, financial managers can ensure that the cash flows are presented in an honest manner. A second ethical issue is insider training, which is when privileged information is utilized that has not been made public (Ross et al., 2011). This is an unfair advantage that should not be utilized by a financial manager in order to gain a greater profit and can be avoided by simply not utilizing any privileged information. By ensuring that as a financial manager, one remains ethical when doing any business dealings, it can create a stronger moral character that will aid in one’s career from a long term
Ethics plays a vital role in developing accurate and high quality financial statements for management, financial institutions, and investors. As management utilizes financial statements to make decisions regarding the operations of the business, it is necessary to review accurate financial statements to make strategic decisions about the future of the organization. Investors and financial institutions require accurate financial statements to make informed decisions upon whether to invest funds into the organization or the wisdom of lending funds to said organization.
Ethics is discovered by a Greek philosopher named Socrates, he viewed ethics as knowledge as the right reasons to make during any situation supported by the right reasons. Ethics is how an individual behaves, it is also the standards of behavior which can promote human welfare and also ‘The Good’, this extends to animal welfare, the physical environment and how an individual serve human welfare. Ethics is also how we treat one another and even the people we don’t really know like strangers etc. What ethics is not? Ethics is not feelings and not what other people do. While business carry an almost similar concept from ethics but in the field of business. It’s how we behave in the field of business as business men and women. Business ethics is
When examining the effect of open marketing on the profession of accounting it is important to view it from three perspectives: the client's, the profession's, and society's. Additionally, two key areas that are affected by marketing must be addressed,
According to Marshall (2004), "accounting is the process of identifying, measuring, and communicating economic information about an organization for the purpose of making decisions and informed judgements" (p. 3). Specifically, financial accounting "refers to the process that results in the preparation and reporting of financial statements for an entity" (Marshall, McManus, & Viele, p. 5). While many entities prepare their own financial statements, firms can also contract with a public accounting firm or a Certified Public Accountant (CPA) to perform services such as reviewing or compiling statements. (A CPA is a professional designation granted by individual states.) Entities that are publicly traded or complex in nature contract for auditing services. The provider of the auditing service will test the compliance of the entity's financial reporting against generally accepted accounting principles as issued by the Federal Accounting Standards Board (FASB). The provider will also ensure that the company, if publicly traded, complies with requirements of the Securities and Exchange Commission (SEC) and the regulations of the Public Company Accounting Oversight Board (PCOAB). This paper briefly explains the principles of financial accounting and how the deviation from ethical and legal obligations led to greater government oversight and the need for ethics training of future accounting professionals.
The selected issue for the paper is where an employee has not given their current or potential customers accurate information when opening accounts or requesting new services from Washington Mutual. When a person is in the workplace proper business ethics is used on a daily basis. An employee can make ethical decisions by applying their critical thinking skills to the situation they can ensure that the decision that they make is the right decision. The decision process can be very tiresome process but with the proper procedures one can become a better decisions maker.
The financial manager is responsible for giving financial advice and support to clients and colleagues that will enable them to make good business decisions. Particular work environments differ considerable and involve both public and private sector organizations such as retailers, corporations, financial institutions, charities, and even small manufacturing companies and schools (Financial Manager, 2011).
When working within any professional body, an individual will be subjected to circumstances in which personal ethics will come into play. The Accounting profession is no different as ethical questions arise as part of any working day and can effect how an individual or the company conducts business. These questions can vary greatly in practice from selection of new customers to the rates at which those clients are going to be charged. These ethical questions are raised regularly within the workplace and each employee will react to them differently. The varying reactions will depend on the morality of each individual, or each employees own ‘ethics’. As each employee has their own set of values companies must be alert to the fact that some of their employees may have more ‘flexible’ morals than others. This ‘flexible’ morality can lead to corruption and manipulation within the workplace and can give companies serious problems. As a result of this, all of the main professional accounting bodies have begun to re-introduce mandatory courses teaching ethics to their employees. As well as this, ‘A Guide to professional ethics’ was published which contains a number of different principles in order to govern the behaviour of accountants and also to identify and reduce the greatest areas of risk with respect to unethical behaviour.
Verschoor, CMA, Curtis C. "Ethics: Do The Right Thing." Strategic Finance (2006). Retrieved on 18 September 2006 .
A Financial Manager oversees the monetary concerns of any organization. They also offer financial counsel to support customers, and associates to empower them to make sound business judgments. Prior to any decision made by the most organization, monitoring, interpreting cash flows and forecasting future trends are essential for both short and long-term decision.
Accounting ethics is primarily a combination of business and human ethics; the moral of theses ethics is to “serve the public interest.” As accountants and auditors they need to follow moral values and judgments in regards to accountancy. When working with fortune 500 companies they have a duty to also follow professional ethics. Accounting was first introduced by Luca Pacioli, and advanced by government and professional groups.
As an accounting and finance student, with an ambition to qualify as a chartered accountant in the future, I feel it is appropriate for me to analyse the ethical issues faced by the Accounting Profession. The Accounting Profession is one which has come under a lot of scrutiny in recent years, as scandals such as Enron and Anglo emerged. A series of unethical decisions led to the closure of one of the ‘big five’ accounting firms when the Enron scandal came to light. In Ireland today Ernst and Young are facing a court appearance in relation to their involvement as auditors of Anglo Irish Bank, needless to say they also made some unethical decisions while working with the bank. In this literature review I endeavour to assess the code of ethics held by accountants and provide examples of when accountants have not adhered to this code of ethics.
Yes indeed, the execution of new strategy will primarily require good financial management to achieve success. The following functions tend to be the most important:
Deontological and utilitarianism are the two type of ethics system which characterizes ethical decision-making with respect to organizational culture and the accounting profession (Pointe Cast Presentation, n.d.). The paper presents in the following section the diverse approaches provided on the two ethical systems.
as immoral, not as a guide to ethical behavior." ( A. Alhemoud). How, then, a
According to Carol Padgett (2012, 1), “companies are important part of our daily lives…in today’s economy, we are bound together through a myriad of relationships with companies”. The board of directors remain the highest echelon of management in any company. It is the “group of executive and non-executive directors which forms corporate strategy and is responsible for monitoring performance on the behalf of shareholders” (Padgett, 2012:1). Boards are clearly critical to the operation of companies and they are endowed with substantial power in the statute (Companies Act, 2014). The board is responsible for directing and steering the company. The board accomplishes this by business planning and risk management through proper corporate governance.