1)read Question #14 on page 26 of your textbook under the Your Turn Questions.(M Finance by Cornett, Adair and Nonfsinger 5th edition)
* Answer the question in 1 paragraph using knowledge and concepts learned so far in this course and refer to professional vocabulary from the textbook to support your ideas. You must be sure to demonstrate a grasp of what you have learned, NOT JUST OFFER your own opinions. FAILURE TO USE PROFESSIONAL TERMINOLOGY WILL RESULT IN A LOWERING OF YOUR GRADE.(MCgrawhill Finance)
2) respond to the two discussions below in one paragraph each separately. be sure to bring what is happening today into the conversation:
* How does the lack of ethics today affect people’s views on what is right or wrong in business.
* What professional associations could be part of the ethics conversation
Discussion1
Just like in many areas of business ethics plays a strong role in finance. Ethics is the study of values, morals, and morality. Finance professionals mainly manage other peoples money. Fiduciary relationships such as, bank employees managing deposits, create temping opportunities for finance professionals to make decisions that either can benefit the client or benefit the advisor. Even with the strong emphasis on ethics, training, and standards, with the many professionals, some still act unethically. When one party, the principal, hires someone else, the agent, this is called an agency relationship. Hiring managers to run a firm for shareholders can sometimes serve interests of the managers and not the firm. With these intentions an agency problem is created. The way the manager serves himself can be and usually is with unethical behavior. These unethical decisions can ruin the reputation of a company, have criminal prosecution and penalties. Governments have passed laws and regulations to ensure compliance with codes of ethics. Financial professionals should understand that not only are they serving shareholders but also society as a whole.
Discussion2
COLLAPSE
Ethics in business is one of the most important traits a business has to offer to its customers, employees, and themselves. The definition of ethics is the study of values, morals, and morality. Having an ethical company builds trust with key stakeholders like investors and consumers. Generally, ethics is the foundation of respect towards others, but when it comes to business, it’s to make sure that profits are made only through the right channels. Unfortunately, unethical behavior does occur in the business world. Like the food chain, whenever a plant or animal is invasive, it will affect other animals in the food chain creating a sort of domino effect. The same goes for unethical behavior, for example, unethical accounting. This practice is when a business is intentionally mismanaging accounts to make the company seem more profitable than it really is. This happens usually because of the pressure of the senior management and staff members. This, therefore, hurts investors who may have purchased shares in the company only to end up losing when the truth is revealed. Also, it gives the business a bad reputation for the future, which is usually the case since government laws and regulations are in place. Personal consequences are also a factor when they are proven guilty when performing unethical accounting practices These consequences include substantial financial costs, long prison time, or other legal penalties depending on the severity of the crime. This also has a domino effect because the accountant is given a bad reputation as well as the possibility of losing their credentials or licensing, which will be devastating for his or her family and friends. This is just one of many types of unethical methods used by businesses, every method has its consequences.
