Ethics for Finance Professionals

This document discusses the ethical issues faced by Shady Oaks, a business organization, and the courses of action that can be taken to address them. It also highlights the role of financial professionals in such situations.

ETHICS FOR FINANCE PROFESSIONALS1
Ethics for finance professionals
Course
Instructor’s name
Institutional affiliation
City and state
Date

ETHICS FOR FINANCE PROFESSIONALS2
Question, one
The ethical issue, in this case, is that the air conditioning system lining was made out of
asbestos, this was discovered by the specialists who were carrying out maintenance activities in
the premises of Shady Oaks. These specialists suggested that Shady Oaks must remove the
asbestos and replace it. According to Shady Oaks, the replacement process would cost them
more money, given that there would be inflations the next years to come. At the time when
specialists recommended replacement of the asbestos lining in the air conditioning system, the
asbestos had not yet been degraded, and thus no fibres had been produced. The produced fibres
cause inflammation and genetic alterations to an individual's body cells (King 2017). Continuous
exposure to asbestos is dangerous to human life mainly because it causes a form of cancer known
as mesothelioma. The asbestos fibres are microscopic. Therefore they cannot be detected easily.
The people visiting the premises of Shady Oaks are at high risks of becoming exposed to
asbestos fibres; thus, their lives are in danger. According to the information provided in the case
study, the asbestos in the air conditioning system at Shady Oaks was still intact, and that is why
the management team has not considered replacing the linings of the air conditioning system.
Because the organization of Shady Oaks does not have enough finances to set aside for the
replacement of the asbestos linings in their air conditioning system, they have decided not to do
any maintenance activities. For this reason, Shady Oaks has not considered the lives of the
clients but have instead considered staying in the business area no matter the consequences that
may result.

ETHICS FOR FINANCE PROFESSIONALS3
For this particular case, Avneet is making the ethical decision, although her boss named
Jane is not agreeing with the amendments brought by Avneet. Jane has refused to accept the
proposals brought in by Avneet. Jane is doing so mainly because she is afraid of losing their
clients and thus is willing to do whatever it takes to make sure that the clients do not leave Shady
Oaks. The reviews made by Avneet posse a great danger to Shady Oaks although Jane cannot
notice it. It is terrible to do things in the wrong way, although a chance exists of correcting them.
Question two
The clients of Shady Oaks will be significantly affected by the decision made by Jane as
a top manager in the finance department. Jane's idea of not approving the money to facilitate the
inspection process of the air conditioning system. The three years as recommended earlier by the
specialists have passed although no replacements have been made on the linings of the air
conditioning system. Therefore, the asbestos has degraded, and asbestos fibres have been
produced, thus putting the lives of the clients at considerable risk.
Furthermore, the bank providing the three-year loan to Shady Oaks will be affected. This
is mainly because the information provided by Shady Oaks is not genuine. The information
provided does not categorize assets, whether as current or non-current assets. Besides, some
liabilities and assets have been kept off the balance sheet which violates the accounting
standards. Because the banks based on the balance sheet when giving out loans to its clients or
business organization, Shady Oaks has kept some of its liabilities and assets off the balance
sheet. Thus the bank is using false information provided by Shady Oaks during its course of
acquiring the loan.

ETHICS FOR FINANCE PROFESSIONALS4
For this case study, the moral agent is Jane. Her interests are to make sure that the clients
stay at Shady Oaks. Jane believes that they can still earn more money from their clients provided
that they continue staying at Shady Oaks. More so, Jane is more concerned about the people who
are employed by Shady Oaks. These employees also have dependents who depend on them
mainly because they work at Shady Oaks and thus earn some money as a salary, which facilitates
their leaving. Therefore reducing the number of employees will not only affect the fired
employees, but it also affects other people who depend on them. In summary, Jane is more
interested in keeping Shady Oaks operating no matter what it takes.
The competing ethical values, in this case, are honesty, mutual benefit, respect for others,
transparency. The values possessed by people define who they are and are important driving
factors towards the choices that are made (Thornton 2015). According to the case study, there is
no honesty between Shady Oaks and the bank mainly because the bank is using non-genuine
information to provide the three-year loan to Shady Oaks. Ethics is all about human actions as
well as the choices that are made by human beings. The values specify the relationship that exists
between a goal and the person (Mintz 2018). Jane chose to employee her brother-in-law as the
auditor for Shady Oaks because of the thinks that he can "see the big picture" of Shady Oaks.
Jane violated the ethical value by considering her relationship with the brother-in-law as a
leading factor other the goals set by Shady Oaks.
Question three
One of the courses of action that need to be put in place is the use of a deontological
approach. Under this approach, the action is considered appropriate because of the traits of the
action but not the consequences that might result after a specific action has been put into practice
(Joseph et-al. 2017). The organization in the case study has made all of its private information

ETHICS FOR FINANCE PROFESSIONALS5
public as it is discussed in the normative theories. However, exposing private information about
Shady Oaks can lead to some adverse side effects. Its clients are likely to sue it in the courts of
law for disclosing their personal information. The number of clients seeking services from Shady
Oaks is also expected to reduce mainly because the clients feel that their personal information is
no longer private.
The other course of action is taking Shady Oaks to courts of law. I would suggest this
action mainly because Shady Oaks does not care about the lives of its clients regarding the types
of air conditioning system that is being used at their premises. Shady Oaks has not put in place
the recommendations brought forward by the specialists who inspected their premises. The
normative theory recommends taking legal actions in situations where judgment about the state
of the law is concerned (Sanne 2018). Shady Oaks is using outdated accounting policies. On the
other hand, the legal process might lead to some consequences, one of which might include
termination of the working permit for Shady Oaks. This action can impact its clients in such a
way they lose their money most especially who pay their bills for the service they receive in
advance.
Furthermore, Shady Oaks needs to put the idea of diversification into account. In the
diversification process, they should understand that diversification is an asset which must be
included in leadership responsibilities (Thornton 2019). Shady Oaks can also start dealing in
other sectors of the business industry, like opening up a restaurant at their premises where its
clients can have both lunch and breakfast. This will bring in more revenues as well as profits
which will help in fixing the financial problems. The consequences of this action is that; more
money will be needed to open up the restaurant, yet the organization at the moment is aimed at
minimizing its expenses.

ETHICS FOR FINANCE PROFESSIONALS6
In addition to the courses of action, the management Shady Oaks must provide finances
for the inspection process as well as replacement of the lining of the air conditioning system.
This will prevent further consequences which may result in case the asbestos gets degraded,
resulting in the formation of asbestos fibres. Allowing this decision may not work in favour of
some stakeholders. The stakeholders of an organization usually have competing demands.
Investors care only about truthful information, whereas the top managers are most interested in
the financial statement (Mintz 2014). Taking this particular course of action means that other
sectors within the organization will have to run on a small budget irrespective of the fact that
there is much pressure resulting from the increasing number of clients.
The management of Shady Oaks can also carry out detailed research about the ethical
issues affecting their organization. This research process must include identifying the ethical
decisions made. It is always important to first find out the likely consequences which may result
after a particular decision is made (Hamel 2019). The organization must also find out what they
must have done, that is by having a review at the available alternatives. The final step in the
research process if finding out where they were wrong and try to learn from the outcomes of the
ethical decisions that were made earlier. The only limitation to the research process is that there
are no funds to facilitate the process, and if it is put in place, it will increase the expenses of the
organization. This is true because the external person has to be hired to carry out the research
concerning ethical issues.
The final course of action is that Shady Oaks needs to provide accurate information to all
the parties that it is dealing with during its operation. Trust, loyalty, truthfulness and fidelity
towards those individuals with whom the organization work with need to be respected (Koocher
2014). Trust is vital in the business sector because it is a strong foundation for a good working

ETHICS FOR FINANCE PROFESSIONALS7
relationship. This course action can lead to the termination of contracts between Shady Oaks and
its partners. Its partners will realize that all long they were dealing with the wrong organization.
The end results might result in the loss of suppliers who had been supplying Shady Oaks with
necessary materials.
Question four
The best course of attraction is revealing the truth to all partners that Shady Oaks works
with. This truth will act as a new starting point in such a way that Shady Oaks will be responsible
for the illegal activities it has participated in. Revealing the truth will also act as a form of
apologizing to the entire world, in which the management team will ask for forgiveness from its
clients as well as the other stakeholders.
Revealing the truth falls in line with work ethics in such a way that business organization
are required to provide only correct information to its partners. More so, the statement issued by
Shady Oaks will contain all the wrong crimes that the organization has committed. Therefore this
confession can be used by legal practitioners to take Shady Oaks to courts of action. Also, Shady
Oaks will have realized its mistakes and thus might get some sympathy from its clients who are
willing to continue receiving their services.
Question five
Financial professionals are responsible for ensuring that business transaction, as well as
risks, are reflected in the records of a particular organization (Deputy 2018). Concerning the case
study, the Shady Oaks organization can employ a financial expert which will be in identifying
the risks that are likely to occur due to the ethical issues that are happening right now. The

ETHICS FOR FINANCE PROFESSIONALS8
recruitment of this external expert can be new skills as well as knowledge of how the funds can
be managed effectively.
Furthermore, a financial professional is needed to provide and interpret financial
information (International federation of accounts. 2019). Currently, Jane and Avneet do not
agree with each about the information that must be reflected in the financial statements (the
income statement and the balance sheet). Therefore a financial professional is highly needed to
solve the disagreements that exist within the organization. The financial professional must
possess extra skill if he or she is to convince Jane on matters related to the information which
financial statements must include.
The financial professional can as well identify areas or section within the organization
where it could save money or make additional profits (CareerBuilder. 2016). The identified
regions can be where the organization is spending money on, yet they are not worth the money
spent onto them. This will Shady Oaks to realize one of how it can reduce its expenses.
Venturing into areas that can generate more profits can help to increase the amount of revenue
generated and earnings as a whole.
A financial professional is also needed to talk to the clients about their goals, objectives
as well as their long term plans (Zender 2016). The clients of Shady Oaks do not have their goals
and long term plans incorporated anywhere within the work structures of Shady Oaks. Therefore
there is a need to document their intentions as well. This will help to reduce the amount of time
taken to transform from one transit to the other.
More so, a financial professional is needed to draft an excellent business plan. The
developed financial plan will clearly articulate both goals and objectives of Shady Oaks because,

ETHICS FOR FINANCE PROFESSIONALS9
at the moment, no financial procedure is followed by the finance department of Shady Oaks
organization. The business plan also shows the steps which must be followed to achieve the
already set goals and objectives (Jennings 2016). The benefits associated with a well-drafted
financial plan is that it prevents procrastination of activities, and it also creates a peaceful mind
within the organization.

ETHICS FOR FINANCE PROFESSIONALS10
References
Briddock, P., 2014. Finance professionals have a role to play in the NHS. Retrieved from
https://www.theguardian.com/healthcare-network/2014/jun/24/finance-professionals-role-nhs
CareerBuilder. 2016. So you want to become a financial analyst? Retrieved from
https://www.careerbuilder.com/advice/so-you-want-to-become-a-financial-analyst
Cummings, F. B., 2015. Financial planners and advisors. Retrieved from
https://books.google.co.ug/books?
id=OVOeDgAAQBAJ&pg=PA97&lpg=PA97&dq=ROLE+OF+FINANCIAL+PROFESSIONA
LS+2015&source=bl&ots=LF3iNtR8Qw&sig=ACfU3U0pPSMjawaubkZ0vbumes5Nw00QfA&
hl=en&sa=X&ved=2ahUKEwjE-
LORtc3kAhX5RBUIHdYSCnsQ6AEwGnoECAsQAQ#v=onepage&q=ROLE%20OF
%20FINANCIAL%20PROFESSIONALS%202015&f=false
Deputy, D. 2018. Financial Professionals’ Responsibilities Are Changing. Get Ready For The
Impact Of Blockchain. Retrieved from https://www.financialexecutives.org/FEI-Daily/June-
2018/Financial-Professionals%E2%80%99-Responsibilities-Are-Chan.aspx
Hamel, G., 2019. How to Address Ethics in Your Personal Decision Making. Available at
https://smallbusiness.chron.com/address-ethics-personal-decision-making-36766.html
International Federation of accounts. 2019. A VISION FOR THE FINANCE PROFESSIONAL
AND THE FINANCE FUNCTION. Available at
https://www.ifac.org/system/files/publications/files/A-Vision-for-the-Finance-Professional-and-
Finance-Function.pdf

ETHICS FOR FINANCE PROFESSIONALS11
Jennings. P. 2016. My role as a financial advisor – the need for a financial advisor. Retrieved
from https://www.moneyweb.co.za/financial-advisor-views/role-financial-advisor-need-
financial-advisor/
Joseph, S., Tejay.P.G. & Mohammed, A. Z. 2017. Utilizing normative theories to develop
ethical actions for better privacy practices. https://doi.org/10.1080/15536548.2017.1419018
King, A., 2017. What Is Asbestos? Retrieved from https://www.asbestos.com/asbestos/
Koocher, P. G., 2014. "What Should I Do?" - Ethical Risks, Making Decisions and Taking
Action. Retrieved from
https://www.continuingedcourses.net/active/courses/course050.php10.5553/REM/.000031.
Mintz, S., 2014. How to handle ethical issues in the workplace. Available at
https://www.workplaceethicsadvice.com/2014/05/how-to-handle-ethical-issues-in-the-
workplace.html
Mintz, S., 2018. Ethics Sage. Retrieved from https://www.ethicssage.com/2018/08/what-are-
values.html
Taekema, S.2018. Theoretical and Normative Frameworks for Legal Research: Putting Theory
into Practice. Law and Method, 2018, DOI:
Thornton, F. L., 2015. Which Values Are Ethical Values? Retrieved from
https://leadingincontext.com/2015/06/17/ethical-values/
Thornton, F. L., 2019. The complexity of ethical thinking and decision making (part 4). Retrieved
from https://leadingincontext.com/tag/7-lenses-of-ethical-leadership/

ETHICS FOR FINANCE PROFESSIONALS12
Zender, J., 2016. A Fiduciary Duty Requirement for Financial Professionals is Great, in Theory.
Retrieved from https://publish.illinois.edu/illinoisblj/2016/04/18/a-fiduciary-duty-requirement-
for-financial-professionals-is-great-in-theory/