Ch11 - Chapter 11: Introduction to Business Ethics and...

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IT Auditing & Assurance, 2e, Hall & Chapter 11: Introduction to Business Ethics and Fraud IT Auditing & Assurance, 2e, Hall & Singleton
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Pertains to the principles of conduct that individuals use in making choices and guiding their behavior in situations that involve the concepts of right and wrong. ETHICS Business Ethics How do managers decide on what is right in conducting business? Once managers have recognized what is right, how to they achieve it? The necessity to have an articulate foundation for ethics and a consistent application of the ethical standards.
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BUSINESS ETHICS Basis of Ethical Standards Ethical Issues in Business [Table 11-1] Religious Philosophical Historical IBM combination of all three Equity Exec. salaries Pricing Rights Health (screening) Privacy Sexual harassment Equal opportunity Whistleblowing Honesty Conflicts of interest Foreign practices [FCPA] Accurate F/S reporting Exercise of Corp. Power PAC, and politics Workplace safety Downsizing, closures
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IMPLEMENTING BUSINESS ETHICS 1990 Business Roundtable Greater commitment of top management Written codes (policy) that clearly communicate standards and expectations Programs to implement ethical guidelines Techniques to monitor compliance Boeing Uses line managers to lead ethics training Toll-free number to report violations General Mills Published guidelines with vendors, competitors , customers Johnson & Johnson Creed integral to its culture Uses surveys to ascertain compliance SAIC Toll-free number, required training, separate dept.
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IMPLEMENTING BUSINESS ETHICS Role of Management Create and maintain appropriate ethical atmosphere Limit the opportunity and temptation for unethical behavior Management needs a methodology for including lower-level managers and employees in the ethics schema Many times, lower-level managers responsible to uphold ethical standards Poor ethical standards among employees are a root cause of employee fraud and abuses Managers and employees both should be made aware of firm’s code of ethics What if management is unethical? e.g., Enron
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IMPLEMENTING BUSINESS ETHICS Reported Abuses Typically junior employees (Wall Street Journal ) Half of American workers believe the best way to get ahead is politics and cheating One-third of a group of 9,175 surveyed had stolen property and supplies from employers Ethics Resource Center: 1994 study 41% falsified reports 35% committed theft Ethical Development Most people develop a personal code of ethics from family, formal education, and personal experience Go through stages of moral evolution [Figure 11-2]
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This note was uploaded on 04/04/2011 for the course ACCT 5230 taught by Professor Szendi during the Spring '10 term at Kean.

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Ch11 - Chapter 11: Introduction to Business Ethics and...

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