Kingfisher School of Business and Finance

1st Semester A.Y. 2020-2021

Accounting 21: Governance, Business Ethics, Risk

Management, and Internal Control

ETHICS IN PRACTICE CASES

Submitted by:
Perez, Samboy M.
Brian, Cindy P.
Benitez, Christine S.
Cantay, Maricel D.
Ferrer, Neriza Kay
Flores, Elma T.
Opague, Rona Jean P.
Torio, Mikaella T.
Tropia, Joevelyn
Valdez, Darlyn F.
GROUP 11

Submitted to:
Mr. Mark Avedon M. Nevado, CPA

November 6, 2020
 Fired for Cheating on Employer Test
1.If these were bright, young employees who had survived a very competitive hiring
process, why do you think they risked it all by cheating?

Based from the case study, the test takers described the test as a "big waste of
time" because aside from it was time consuming, it was repetitive and annoying for them.
Moreover, it was also stated that cheating on these types of test had been an accepted part
of finance training in the industry. 
It can be concluded that cheating has been rationalized by the test takers knowing
that other employees cheated before, so they thought that it was fine to cheat and they
must also cheat to pass the test. In addition, the test takers were pressured to pass the
exam in their first take to make a good impression and so that their supervisors will not
be disappointed. 
Being highly competent is needed in a competitive environment but cheating
should not be tolerated, and the test takers disregarded this idea due to rationalization
and pressure or incentive. Even the company emphasized the importance of integrity and
other industry regulations, the test takers probably did not thoroughly understand the
real purpose and significance of the training that was conducted by the company.
Cheating is clearly not tolerated within the said company which was said to be
inconsistent with the values fostered in the firm. Thus, the test takers faced the
consequence of their unethical conduct.

2.Did the topics covered make a firing more likely an outcome? Should the test takers
have seen this?
Definitely yes, since the topics covered are important information of the company.
Compliance training is significant for Goldman, it takes part to test their competence and
integrity to the company so firing of employees who cheated in taking the test is more
likely to happen.
And of course, they’ve already seen it coming because they were trained in the
grounds of industry and regulatory information of which the employees were personally
aware of the fact that there are consequences in violating the rules within the
organization. 
Furthermore, Goldman had given a chance to those who failed the test, so there's
no reason for cheating. Unfortunately, they don't want to have a bad impression to their
supervisors, so they choose the easier way.

3.Was firing a fair consequence in this situation? Should the company have used some
other penalty? If so, what?
Yes, firing was a fair consequence because they are exposing themselves as
untrustworthy and disingenuous. The exam was lenient to the employees and it seems
like it was not hard to pass since on average, a person would get a score of 70 and given a
chance if they failed for the first time. If they have the guts to cheat on a simple exam, then
how would the company trust them with other task specially that it is involved with
investment bank’s securities division and included analysts. In the long run, if not
managed, they might cause significant loss of information and revenues. Also, hiring a
person that contradicts the values that runs through the firm is not worthy of keeping. In
the end, one’s integrity should uphold above anything else.
 More Sales, Lower Ethics?
1. Is it ethical for the bank to keep raising our goals and expect that we keep selling
these extra accounts that customers might not really need?
Banks are one of the institutions that requires a fiduciary relationship with its
clients. Having that kind of relationship in their transactions, bank are expected to
provide financial services that will enhance or give benefits to its client. If the banks keep
raising the goals of its employees, leading them to sell extra account that are unnecessary
to clients or customers will clearly not in-line with the best interest of its clients and thus
violate the trust given by them, which is to provide them financial services that keep their
money safe while enhancing its value. Therefore, it is unethical for the banks to raise sale
goals for products customer don't need since having an aggressive sales goals for all
employees might lead to employees lying to the customers and may also drive employee
morale down. Furthermore, if customers were dissatisfied with their new bank products,
they might cancel all their accounts and move to a new provider, leading to fewer clients.
2. What are the ethical issues facing the company?
Ethical issues can come from different sources and it is challenging because they are
difficult to deal with. It is important for the managers and individuals to be aware of the
potential or existing ethical issues within the company so that they can alleviate it and
avoid major complications. Selling customers’ products and setting unrealistic sales target
are the ethical issues that the company is facing. In turn, may lead to other ethical issues
such as misleading or lying to customers to achieve sales target.
3. Is it right for us not to disclose to the customer the idea of keeping the same
account and just covert it instead of opening a new one?
Disclosure is essential for an effective and successful operation for a bank. By
doing so, it provides necessary information to the customers that may affect their
decisions on certain transactions. A bank employee has the responsibility of raising the
customer's awareness about all the options and corresponding consequences.
Considering that the customers expect objectivity and fairness from the employee
regarding a transaction, the latter shall disclose every important detail. Thus, the act of
not disclosing to the customers impair the trust and confidence of a customer to the bank.
4. Should I give into the pressure of the company to meet the company’s goals?
What should I do?
Companies set goals so that managers can ensure that they take action to meet
their objectives. Pressure is necessary for workers to accomplish these targets and to not
be distracted, however lying to a customer is not just a moral low ground, it is not also a
sound business practice. In the context of giving in to pressure by compromising the
employee’s ethical responsibility it is better for him/her to move to other departments or
switch jobs. If, however, this is not possible the employee may take the matter to his/her
superior regarding the unrealistic goals set by them. The employee can also suggest other
ways to meet those goals without compromising their ethical grounds.