CHAPTER 3

Accountants today feel increased pressure to perform

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Unformatted text preview: w complicated regulations—all of which can contribute to the pressure to commit fraud. pressure U.S. regulators passed the Sarbanes-Oxley Act in 2002 in an U.S. Sarbanes-Oxley effort to address problems created by lack of both transparency and ethics in financial accounting. transparency 35 ETHICAL ISSUES AND ETHICAL DILEMMAS IN BUSINESS DILEMMAS 2. Marketing fraud is the process of dishonestly 2. creating, distributing, promoting, and pricing products. products False or misleading marketing communications can False destroy stakeholder trust in a corporation. destroy 36 ETHICAL ISSUES AND ETHICAL DILEMMAS IN BUSINESS DILEMMAS a. Sometimes, it can be difficult to draw the line between a. outright marketing fraud and puffery (exaggerated exaggerated advertising claims, blustering and boasting, upon which no reasonable buyer would rely). which ). Puffery is not considered fraud. Puffery not i) Implied falsity means that an advertising message i) has a tendency to mislead, confuse, or deceive the public. public ii) Literally false claims can be divided into tests prove ii) tests and bald assertions (non-establishment claims). bald (non-establishment 37 ETHICAL ISSUES AND ETHICAL DILEMMAS IN BUSINESS DILEMMAS b. Advertising can also make ambiguous b. statements or weak claims from which viewers statements must infer a message. These are often called “weasel words” c. Labeling issues also create an ethical gray area. c. ethical 38 ETHICAL ISSUES AND ETHICAL DILEMMAS IN BUSINESS DILEMMAS 3. Consumer fraud is when consumers attempt to 3. deceive businesses for personal gain. deceive There are many different ways of engaging in consumer There fraud, from stealing from stores, to price tag switching, to lying to obtain discounts. lying a. Collusion involves an employee who helps a a. Collusion consumer commit fraud. consumer b. Duplicity involves a consumer duping a store (E.g. b. Duplicity a customer who stages an accident and then sues the store for damages). store c. Guile is ass...
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This document was uploaded on 03/17/2014.

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