Ethics in Accounting and Financial Decision Making
In today's business world, many organizations place a tremendous emphasis on ethics and the financial decision making process within organizations. All organizations are expected to behave in an ethical manner in the current economy. There are many factors that influence organizations to ensure and enforce ethical policies. The objective of this paper is to discuss ethics in accounting and financial decision making.
An article written by Joseph McCafferty (2000) discusses the challenges faced by CPA Barron Stone, who prefers to be called an informant instead of whistleblower. Joseph McCafferty emphasizes the moral principals of one individual who decided to blow the whistle at Duke Energy Corporation. Duke Energy Corporation runs a very regulated utility business. According to McCafferty, the critical aspect of Stone's allegation underlines whether or not the employer violated ethical obligation by keeping the price of electricity high in the Carolinas.
English: Duke Energy Center and The Westin Charlot...
English: Duke Energy Center
Duke Energy Field Services - East Texas Plant. Thi...It took Stone two years to disclose that Duke Energy Corporation's accounting procedures didn't comply with generally accepted accounting principles. According to Stone, Duke Energy is allowed to earn a maximum rate of return on electricity of about 12.5% in North Carolina and 12.25% in South Carolina. Stone alleges that from 1998 to 2001, the power company reclassified some accounting items to lower their return (McCafferty, 2002). This reclassification kept Duke from exceeding its allowable returns in order to maintain the states rates. In 2001, this issue had been reported to state regulators as well as to company officials. Grant Thornton was appointed by the utilities commission in the Carolinas to investigate Duke's improper accounting principles. The essential element for taking action by Stone was the result of the following factors: an obligation to address this issue, ensuring legality, personal ethics and integrity, and most of all a...