Essay Ethics Article Review

886 Words Oct 9th, 2011 4 Pages
Ethics Article Review

Ethics Article Review
The topic of ethics usually revolves around business practices. Included in these businesses practices are accounting and financial decision-making. Both of these require high standards of ethics as many people rely on the information produced by them. The lack of ethics results in misinformation and the lack of trust.
This paper will first provide a brief summary of an article that discusses ethics in accounting and financial decision-making. After that, this article will be related to assigned readings and to an organization’s current accounting practices. In addition, there will be a discussion on the importance of ethics and The Sarbanes-Oxley Act in accounting and financial
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17).
ParexUSA and Ethical Accounting
ParexUSA is a manufacturing company. Usually manufacturing companies perform two forms of financial accounting and reporting. One is for the external stakeholders and the other one is referred to as management accounting (Engle, 2005). The external stakeholders are from the parent company in France. ParexUSA practices these two forms of accounting. To produce these two forms, the accountants at ParexUSA must ensure that they are producing accurate information and are not being unethical in their reporting just to please the stakeholders. Management must also be given an accurate picture of the financial position of the organization to make better decisions. However, to paint a better picture for the stakeholders, some financial information is at times inflated or not shown. This does involve some unethical behavior as true information is being hidden. The recommendation for ParexUSA would be for the parent company of ParexUSA to provide more guidelines and controls on financial reporting. At the same time, outside auditors sent by the parent company who is not biased for either side should be used to ensure that accurate information is being reported (Staubus, 2005).
Importance of Ethics and the Sarbanes-Oxley Act
Being ethical in accounting and financial decision making is important because investors depend on the information produced by…