Ethical Issues in Financial Institutions

This article discusses the importance of ethics in financial institutions and the various ethical issues that can arise. It covers topics such as deception, fairness and justice, and honesty. The article emphasizes the need for moral management and adherence to ethical principles in order to promote high standards in the industry.

Ethical issues
Ethics is a moral principle or code of conduct that governs an individual on how he/she
should carry out activities in the given environment as well as the person’s behaviour. Each
organization has set in place their own code of conduct or ethics rules which both the
employees and employers must adhere to. Ethics is needed in every organization in order to
define behaviours which are acceptable to promote practises and operations of high standards
and to help both junior and senior employees express maturity in their occupation and carry
out each activity with utmost good faith (Kleinau, 2014). In any financial institution, ethics
should be adhered to since without moral principles; no business can run for a longer desired
period. In this case, various ethical issues identified include;
Deception
This is an act of providing a misrepresentation of information which is relevant. In this
situation, the manager knew very well that the company will not make profit for the coming
two years, but he went ahead and asked the accountant to change the information so that all
the years will have a good report showing they have still made profit in order to make their
shareholders happy. The accountant went ahead and gave a report with wrong information
and not honest information to the shareholders. Therefore, the manager and the accountant in
this case have act in unethical way.
Fairness and justice
The accountant in this situation was not treated with fairness and justice by the manager. She
was forced to provide wrong information in the financial statement by the manager, and she
agreed to it with the fear of losing her job. The manager did not consider fairness and justice

in this case, but rather was only interested on keeping the good image of the company and to
make the shareholders happy.
Honesty
The report provided by the accountant contained wrong information. The accountant was not
honest in this case. The manager also was not honest since he was aware of the information
but approved it. The shareholders in this case, are the ones not treated with honesty as per the
ethics requirement. The manager just needed to satisfy the interest of the company and not
caring about the interest of the other parties involved.
Moral management is also a way of expressing moral principles; managers are required to be
sensitive when handling their stakeholders. They are also supposed to be understanding in
every situation. No form of immorality should be entertained at any point by the managers. In
this situation however, the manager did not act in accordance with the moral principle that
govern the organization operations. (Dale, 2016)

References
Dale, O. (2016). Ethical issues and stakeholders matter. Addiction, 111(4), 587-589. doi:
10.1111/add.13267
Kleinau, C. (2014). Ethics in Finance: Applying Ethical Theory to Guide Decisions and
Analysis in Finance. SSRN Electronic Journal. doi: 10.2139/ssrn.2512668