Issue Identification Ethics And Enterprise

Running head: ISSUE IDENTIFICATION: ETHICS AND ENTERPRISE
Issue Identification: Ethics and Enterprise
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Authors Note

ISSUE IDENTIFICATION: ETHICS AND ENTERPRISE1
Introduction
The aim of this paper is to define and clarify a possible ethical dilemma faced by a real-
world organization, and to address the present significance of the issue. An identified ethical
problem can only be addressed through an organizational policy. Business ethics can be regarded
as a gray area, it has become important for every company to develop guidelines on ethical
problems when determining how to address breaches of these problems should they occur
(Rendtorff, 2009). The explanation will also be given regarding the requirement of a policy for
this problem in the first place.
Discussion
Many authors are of the view that the behavior of the individuals changes with the
conditions of changing environment. Organizational rules designed to uphold acceptable
standards, need to be revised to keep pace. Periodic analysis of ethical criteria helps companies
improve shrewdness and expertise in determining the best perseverance available when
confronting ethical dilemmas. Numerous frameworks are present there for supporting decision
making and analyzing ethical dilemmas. The logical solutions to ethical issues and concerns
control by various prevailing theories. No prevalent method is deemed perfect for any situation.
Yet applying pragmatic methods to various dilemmas can lead to useful involvement in the
development of appropriate ethical resolutions. It has been stated by many authors that that
immoral accounting practice is considered to be very serious problem all over the world.
Especially in public companies. A very famous incident in this regard is the accounting scandal
of American Energy Company Enron of 2001. For several years the accounting department made
inadequate and improper reports purposely and the auditor of the company, namely, Arthur

ISSUE IDENTIFICATION: ETHICS AND ENTERPRISE2
Anderson, signed all those documents despite of knowing the fact that all of those documents are
incorrect. At the time when the truth came out in front of everyone both the companies walked
out. After this incident the shareholders of Enron lost almost 25 $ billion and the previous
accounting firm, namely, ‘Big Five’ had some employees who worked on behalf of the Enron.
The closure of the Enron resulted in the job lost near about 85000 people. However, it has been
found that in order to respond the Enron case some initiatives had been taken by the Federal
Government at that point of time. Not only that this initiative also helps to protect the
shareholders and other stakeholders of the company from this type of incidents. The Sarbanes-
Oxley Act was enacted in 2002 which mandates the certain new requirements to preserve the
rights and interests of the shareholders (Bainbridge, 2007). The ‘Occupy Wall Street’ is
considered to be a famous movement in this regard. There are also some other issues which
states that the public still did not believe the corporate financial accounting.
Many authors and researchers are of the view that the fraud is a worldwide problem
which places a heavy burden on both government and private organizations. As per the report of
2017 Report to the Nation made by the Association of Certified Fraud Examiners it has been
observed that every year the average company is losing almost 5 percent of its profits due to
fraudulent activity made in the accounting reports. If this calculation is right, fraud is liable for
damages in excess of $3.5 trillion annually (Ofurum & Gabriel, 2019).
Executing and applying comprehensive accounting principles helps companies to avoid
deception from occurring, which is considered as much inexpensive and more operative than
identifying fraud. Some authors are of the view that, even if fraudulent activities are detected, the
money involved is generally disappeared by the time they are found, and there exists a very
small chance to recover those lost money. This type of issue related to accounting frauds are