Corporate governance and ethics have been an important part in business, notwithstanding the greatly publicized Enron, WorldCom and other corporate frauds, has reinforced the educational importance and comeback again on these ethics. In 2001 and 2002, a considerable number of corporate accounting scandals confirmed that individual ethics and financial reporting principles are related. In the article by Duarte, "what we learn today is how we behave tomorrow, defines a student's perceptions studying ethics in business management courses" was reviewed to explore if universal business instruction and ethics training influence a student's ethical decisions and or moral developments.
Some researchers believe that ethics cannot be taught and that ethical behavior is a code of conduct of right and wrong. Yet most businesses adhere to strict ethics training and the consequences of going against proper behaviors.
From a normative perspective, the issue of determining what are acceptable or ethical behavior and the grounds for the justification of behaviors is the work of philosophers.
The characterization of ethics is the control of dealing with what is right and wrong with an honest responsibility and commitment. Each person's ethics vary according to his or her own morals, location and upbringing. This new perception on ethics has brought about a renewed interest in the importance of these values and their impact on ethical decision making in today's business environment.
The article reviews the coincidence that business schools versus regular schools provide a different perception on ethical behavior and also differences exist between ages and genders. According to Kohlberg's theory of cognitive moral development suggests that "sensitizing students to ethics can in some cases produce a shift in their beliefs however, the overall outcome of the differences were very minuscule."The area of financial ethics that has made the largest impact on organizations today is the Sarbanes-Oxley Act of 2002. The Sarbanes-Oxley Act was introduced to look after public investors from corporate accounting errors and fraudulent practices. The act is administered by the Securities and Exchange Commission (SEC). The act is named after its sponsors, Senator Paul Sarbanes and Representative Michael Oxley; it is commonly known to as "SOX," however the formal name is "The Public Company Accounting Reform and Investor Protection Act of 2002." "The SOX Act has helped to regulate an organization's financial information by covering issues such as establishing a public company accounting oversight board, auditor independence, corporate responsibility and enhanced financial disclosure. The SOX Act was designed to review the dated legislative audit requirements and is one of the most significant changes to United States securities laws since the New Deal in the 1930s. In addition, the SOX Act gives additional powers and responsibilities to the U.S. Securities and Exchange Commission." (Sarbanes-Oxley Act).
The SOX Act has enforced changes many changes to my former organization, Patterson Companies. Changes have occurred internally and externally in many departments to policies and procedures, some understood well, and others with resistance. The Act has changed the requirements on reporting and disclosures, has changed roles of each employee and has expanded the insider accountability as well as created larger penalties for violations in all areas and empowered the auditor to another level.
Although it may be true that in any organization, a worker's ethical sense may be over-written by the organization's norms, it is still believable to suggest that, especially for managers and other decision makers, formal ethical criteria help individuals in a number of ways. They may help decision makers beyond simply responding to the way processes have always been done. In fact, decision makers are frequently justifying their decisions to any of the numerous stakeholders they are accountable. Ethics is difficult to argue and imagine as being about individual character, the culture and ethical climate of many companies today draw significantly from the character of their founders and top level managers. As noted by Boatright (2007, p. 22) "many of the moral dilemmas facing contemporary managers result from conflicts between their individual beliefs and their role as professionals. Whereas as individuals they may honestly believe in ethical practice, as professionals they often find themselves in an unsettling conundrum where there is a temptation, or shareholder pressure, to place economic performance and productivity above ethical principles."From the time when the Sarbanes-Oxley Act in 2002 was introduced, it has made a profound influence on many corporations and how they approach financial procedures, oversight, instilling ethics as regular policies and procedures. Organizations similar to Patterson Companies have to control and enforce good ethical behavior to go well beyond responsive compliance. From department manager fiduciary sign offs to multiple level approvals on capital expenditures, purchase card approvals and inventory write-offs have been created as responsible process changes. Recommending culture and accounting compliance changes to strategic committees and influential organizational positions that may already be in a difficult situation documenting process management, release of information and mitigating the procedures that are in position but to inquire what potential risks are open for liability ensure that controls are in place to covers those liabilities.
Ã¢ÂÂReferences:Boatright, J. 2007, Ethics and the Conduct of Business, 5th ed., Pearson Prentice-Hall, Upper Saddle River, NJ. Crane, F.G. (2004), Retrieved on October 9, 2009 from: http___www.emeraldinsight.com_Insight_ViewContentServlet;jsessionid=064E7B1DAB2D6AAD92DED7E63425CDEB_Filename=_published_emeraldfulltextarticle_pdf_3680040110Duarte, F. 2008, What we learn today is how we behave tomorrow": a study on students' perceptions of ethics in management education. Emerald Group Publishing Limited, Vol. 4, pg. 120-128. Retrieved on October 9, 2009 from: http://www.emeraldinsight.com/Insight/viewContentItem.do?contentType=Article&contentId=1715021Kohlberg, L. 1981, The Philosophy of Moral Development (San Francisco: Harper and Row) Retrieved on October 9, 2009 from: http://education.stateuniversity.com/pages/2150/Kohlberg-Lawrence-1927-1987.htmlSarbanes-Oxley Act. Sox-online, Sarbanes-Oxley Essential Information. Retrieved on October 9, 2009, from: http://www.sox-online.com/basics.html