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Personal Ethics and Financial Reporting

Personal Ethics and Financial Reporting


Liliana C Duran
Debra Glenn
ACCT 2010
02/19/2016

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Introduction
Ethics should be part of our everyday lives. Whether we are at home, school, work, or any other
environment, it is important to demonstrate and practice the standards that rule our lives. But
there are some situation in which the good practice of personal ethics becomes critical, and
having financial responsibilities within a company is a good example of that.
This essay shows which aspects of my life shaped the concept and perspective of what ethics are
now to me, my experience with ethics and how everything relates to a business environment.

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Nowadays, we live in a globalized society which combines tons of cultures and


individuals with very different ways of thinking and reacting to a single situation. But despite of
the many things that separate one person of another, we all share some common principles when
it comes to moral behavior, and those principle are known as ethics. Ethics are defined as
moral principles that govern a person's or group's behavior. Our world is ruled by a set or norms
and behaviors that the majority of us agree with. In the U.S.A, each of us has the same
knowledge and understanding of what is right and wrong, what makes us different is how
important those moral principles are to us.
. I was born in El Salvador in an LDS family, and although it is different from the U.S.A.,
moral principles in both countries seem very similar to me, if not the same. My parents taught
me from an early age to recognize and choose whats right, even when we may be tempted to do
the opposite. I remember how my mom worked in a position where she extended checks to
others and how she never faced a problem or situation where she had to proof her job integrity,
because she never did anything she was not supposed to do. Such behavior made her keep her
job for over 20 years, and the only reason why she left is because she had to leave the country.
My dad worked as an accountant for years, and also served as an LDS bishop for 5, in both
positions he had access to bank accounts and cash, and as my mom, he never did anything that
made his supervisor or anyone above him doubt of his job.
In El Salvador, there is a saying that implies that someones needs can justify their
actions, even if those are inappropriate and wrong; but to me, this is an erroneous idea. El
Salvadors economy is, unfortunately, not a good one, and its been declining for years. I have
personally been through some hardship with my family, and I remember that, no matter how

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many opportunities they may have had, my parents never took money that didnt belong to them.
My parents example has definitely influenced my personal understanding and development of
my own ethics.
But of course, everyone makes mistakes at some point in their lives, and I was not an
exception to that rule. The good thing is that when youre a kid your mistakes may not always be
as harmful as they can be when youre an adult, and thats what happened to me. I remember
being on eighth or seventh grade, I was in school with my friends, getting ready to take a Social
Sciences midterm, when suddenly a university student (who was doing his internship at my
school) walked in the classroom holding our exams and explaining our teacher was not coming
that day, so we had to take our midterm under his supervision. I noticed the face of some of my
friends and rest of the class, and as soon as we had our exams half of the classroom was
whispering and getting closer to see the exam of the classmate next to them. The situation
escalated in only seconds, and it got to a point in which 90% of the class was solving the test in
groups. After a couple of failed attempts to get the order back, the intern gave up and let us finish
our exam like that. And I have to shamefully admit that, only after one or two attempts of my
best friend (who was sitting next to me) to get together to take the test, I also gave up. For some
reason we all thought what we did was a smart move, so when I got home, I told my mom what
happened. I remember her staring at me with surprise and saying I cant believe you did that. I
honestly dont remember anything else about that conversation, but her facial expression and
those few words were enough to remind me until today that what I did was not a good thing.
No matter where we are, we will always have the opportunity to steal, lie, cheat, or fail to
our standards in any other way; and, somehow, we are defined and judge by our behavior and

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ethics. From a business perspective, good ethics are key to the development and continuity of an
organization. Companies try to protect from any scheme or inappropriate situation from the very
beginning, this is why in job interviews a candidates past and a clean job history become so
important.
Companies are moved by people, and, unfortunately, a 20 min job interview is not
enough to guarantee everyone in the company has the same commitment and will not be
involved in any fraudulent operation at some point. Here is where internal controls come into
play. Managers cannot be on top of everything and everyone all the time, there is a need for other
types of control and supervision to apply to everyone, even managers. It is until poor regulations
or the lack of them are part of a company that ones personal ethics are exposed.
It is never a good thing to brag and say youll never do something you will later be
ashamed of, but there are some situations that can be avoided if you take the decision of how to
behave beforehand. Unlike my 2004 self, I now know that unethical behavior always lead to no
good. Whether is asset appropriation or fraudulent financial reporting that benefits a single
employee or a business, I understand those actions affect everyone and can lead to the end of the
same company, even if theyre made to help the business momentarily.
After having to re-take my Social Sciences test, this time alone, in a longer format, with
more complicated questions and points deducted, I learned that every bad choice has its
consequences. And the same happens in a business environment. Many companies have
disappeared and faced legal consequences due to fraudulent financial reporting, and many
employees have ended up in jail for assets appropriation and participation in fraudulent financial
reporting.

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From my personal experience and the information acquire in college, Ive come to the
conclusion that the best way to deal and prevent any serious fraudulent situation is by reporting
any suspicious activity. As stated at the beginning, ethics differentiate us from others, they define
our character, and are big indicators of our conduct. As employees (at any level), we ought to
seek the advancement and healthy development of the company we are part of. We must be
conscious on how each of our actions affects the company and our co-workers, keeping in that
the results obtained at the end, will be of the same nature our actions were.

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Conclusion
A companys future and healthy growth depend in big part in the actions of its employees
at any level. As well as a good decision taken by a manager can benefit the company, employees
and customers, a bad decision or unethical practices of anyone can harm the overall company.
This is why a good understanding of our job and regulations are key in avoiding any kind of
unwanted situations. Our personal perspective of ethics must show how much we value our job
and the respect we have for ourselves and for others, especially when we can access financial
data or manage cash directly.