Critical Thinking: Ethical Dilemmas




Critical Thinking: Ethical Dilemmas

I would not consider doing what my boss requests me to do because it is not right and there are negative consequences of doing so. What my boss requires me to is illegal and against my ethical principles, and I would not consider doing it. It constitutes fraud in the context of knowingly representing false material facts with the intention of deceiving another person and inducing that person to rely on the false representation made (Sawyers Jenkins and Jackson 12). Irrespective of the argument offered, I know and understand well that there are implications of reporting the wrong figures. As an accountant, I am expected to follow the ethical guidelines as stipulated under the Generally Accepted Accounting Principles and other professional bodies.

Ethical principles in accounting require that accountants are fair in their reporting, and they present honest and objective reports. Accountants should be responsible and competent in their work, and they should maintain confidentiality. In addition, they should be credible and work with integrity. Accounting fraud not only affects the individual or company involved, but it also affects other company stakeholders such as the community, the stockholders and the other company employees, in addition to having legal implications.

Reporting the wrong figures to the stockholders is wrong since it is only meant to present a picture that the company is doing well. Most financial reports of different companies are often made public, and there is always the chance that the stockholders will know about the correct figures. This will not only cause conflicts within the organization but will also make me lose credibility. The stockholders will not have any faith and confidence in me because of the different figures I report, and they will wonder what other figures I have misrepresented. Therefore, I risk losing my job because of behaving unethically. It will not be fair to the stockholders because they will make investment decisions made on the wrong choices presented to them. They risk losing the money they have invested in the company.

Reporting the wrong will not be fair to the employees of the organization. Once the authorities learn of the fraud committed, they will take legal action against the company, and this will result to the company having a bad reputation. Once the government decides to conduct the investigations, it might decide to look at other company operations, and this will not reflect well to the public. This will affect other people’s opinion of the company, and they will not want to associate with it. The people might think that fraud is a company wide policy, and they will lose trust and confidence in the company. They may decide to take their business elsewhere, and this may result to the company decreasing in sales and profitability and eventually closing down, leaving many employees with no source of income. Communities within which the closed organizations are located are affected negatively when the organizations close down. In many cases, the organizations offer essential services to the community, and they employ some of the people in the community. Therefore, the community suffers when fraud happens.

Fraud and falsification of reports and documents, as well as other issues concerned with the representation of biased and misleading information, is a prohibition under the law. The person who has committed has to face the law. A person who has committed fraud risks criminal charges and penalties, which includes serving jail term and paying fines once prosecuted. The average jail sentence is 4.3 years (Harel and Hylton 212). The penalties of the crime committed increase depending on the severity of the crime. The more a person commits fraud and the more the amount of money involved, then the more the person faces the risk of facing a longer jail term. In many cases, once a person has committed fraud, then he or she will continue to commit more fraud in an attempt to cover the previous cases of fraud committed. Most accountants who commit fraud do so by overstating the revenues and assets and understating the liabilities, losses and expenses. Stockholders are one of the main reasons why managers commit fraud as they put pressure on the manager to perform (Sawyers Jenkins and Jackson 14).

Having considered all the consequences of committing the fraud, I would refuse my boss’ request. The only benefit to be derived from committing such fraud is that it would offer a moment of relief for the manager regarding the company’s performance. The manager will not have to face the stockholders and answer questions on why the company is not performing well. This is a short-term benefit since the stock holders are bound to find later that the company did not have good results to report. Therefore, I would tell the manager that I will not do what she requests of me, and then I will offer an alternative. The alternative in this case is to tell the stockholders the truth. As a company, we should be able to explain to the stockholders why the company is not performing well, and offer suggestions on how we can improve our performance. We should suggest measures that will please the stockholders and present them in such a way that they will be satisfied to see the direction that the company is taking.

Works Cited

Harel, Alon and Keith N. Hylton. Research Handbook on the Economics of Criminal Law. Northampton: Edward Elgar Publishing, 2012. Print

Kranacher, Mary-Jo, Richard Riley, and Joseph T. Wells. Forensic Accounting and Fraud Examination. New York: John Wiley & Sons, 2010. Print

Sawyers, Roby Gregory J. Jenkins, and Steve Jackson. Managerial Accounting: A Focus on Ethical Decision Making. Cengage Learning, 2008. Print

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