Ethics in Finance and Accounting: A Business Finance Report

This report provides a critical review of ethics in finance and accounting, prompted by recent financial crises. It examines the interplay between finance, accounting, and ethical considerations, focusing on the integration of ethics and efficiency. The report explores issues such as control measurem...Read More

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Table of Contents
Critical review of Ethics in Finance and Accounting:...............................................................2
References:.................................................................................................................................4

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Critical review of Ethics in Finance and Accounting:
From the latest financial crisis and its after-effects, it has become very vital to
reproduce the relation among the finance and accounting and how to integrate the ethics and
efficiency along with how to empower and motivate practitioners in the modern world of
finance to obligate fairness (Alzola, 2016). The article lays down the journalistic introduction
of issues related to measurement of control and ethical behaviour, misconduct in finances,
proficiency in accounting, ethical investment and corporate reporting.
The article states that the ethics is viewed with certain scornful derision and seen as
counterproductive since it helps in making money and relative power. The article critically
states that crisis has encouraged major course of rectification by understanding that the actual
role of financial sector is to serve instead of ruling the economy. Several well-known
scandals have encouraged the academic communities and business to reveal on the role of
ethics in the world of business. The debate is further fuelled by recent financial crisis and its
outcome.
The article critically states that the control measures and ethical behaviour is based on
the economic proposal of value maximization, under the assumption that decision rule leads
to a communally operative effects. Nevertheless, this generally results in poor decision and
unethical behaviour (Fassin & Drover, 2015). The article states that the root for numerous
misbehaviours is that organizational objectives cannot be completely held quantified. Pushing
the people towards quantifiable goals with strong incentives would most likely result in non-
pursue of organizational objectives and they would seek to increase the thing measured that
might be both unprofessional and unethical.
In light of the control system in this article (Lagarde, 2014) emphasis on the
dysfunctional impact of present system of measurement with the probable ways of

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overcoming the effects and attaining the stability state of congruence amid the corporate and
individual goals. The article states that causes of misconduct in finance and accounting is
diverse where fraud triangle theory is generally referred to determine the likelihood of fraud
in an organization. The article throws light on the professional in accounting and finance as
several unethical decision and financial scandals have taken place due to pressure to gain
short-term results. The article emphasis that accounting and finance requires ethical rules to
represents that misrepresentation of financial situation is not acceptable to earn money.
Reviews from the authors of professionalism in accounting and finance have studied
the causes of accounting frauds and shows that regulatory reformation is not sufficient.
Arguably, restoration of financial reporting must commence from reformation in
professionalism. The article also focuses on corporate reporting by reviewing the issues
focused by Maniora, (2015) on the quality of CSR. The findings suggest that more quality
reporting is based on countries with common law that focuses on improved CSR and
regulations in place. The article concludes by providing guidelines for the companies so that
they can improve their quality of their reports through integrated reporting as it forms a
superior mechanism for integration of environmental, social and governance issues.

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References:
Alzola, M. A. (2016). Beware of the watchdog: Rethinking the normative justification of
gatekeeper liability. Journal of Business Ethics.
Fassin, Y., & Drover, W. (2015). Ethics in entrepreneurial finance. Exploring problems in
venture partner entry and exit. Journal of Business Ethics.
Lagarde, C. (2014). Economic inclusion and financial integrity—An address to the
conference on inclusive capitalism.
Maniora, J. (2015). Is integrated reporting really the superior mechanism for the integration
of ethics into the core business model? An Empirical Analysis. Journal of
Business Ethics.