The presence of unethical behaviors within the accounting profession can lead to severe
consequences, harming employees, investors, and the overall economy. I strongly advocate for
teaching ethics to accounting students and professionals to address this issue. Relying solely on a
"buyer beware" approach is insufficient; implementing more robust checks and balances over
financial practices is crucial.
One of the most recent examples of unethical behavior in the accounting profession is the case of
Wire card AG, a German payment processing and financial services company. Wire card was
embroiled in a massive financial scandal involving over $2 billion in missing funds. The company
falsely reported having large cash balances that did not exist, misleading investors, regulators, and
auditors for years. This unethical behavior caused significant financial stress on markets, as Wire
card’s stock price plummeted, and affected employees and investors suffered substantial losses. The
scandal also highlighted shortcomings in regulatory oversight and auditing practices.
Enhancing regulatory scrutiny and oversight, particularly for companies with high financial stakes, is
crucial to prevent such scenarios. Stricter auditing procedures, including more rigorous third-party
verification of financial statements, can help ensure the accuracy and transparency of financial
reporting. Encouraging whistleblowing and providing protection for those who come forward with
concerns about financial improprieties can also play a vital role in the early detection and
prevention of unethical behavior.
With so many unethical behaviors in the financial and accounting professions that occurs often, I
believe that we should advocate for more check and balances over financial practices. a The
unethical behaviors have a negative impact on everyone that is involved. a For the investor and the
entire U.S economy, can affect the lively hood of everyone. a Providing the teachings and rules and
being held accountable for the actions of the unethical behavior is very important. a Ways to prevent
unethical behavior is to create a code of conduct within the workplace, led by example, reinforce
consequences, show employee appreciation, create checks and balances and continuously review
the code (Comply Log. (2022, June 12). 6 proven ways to prevent unethical behaviour in the
workplace (comply log, 2022).
An example I have chosen is the unethical behavior that General Electric Company (GE) did that the
Securities and exchange commission had to make a fine of estimated 200 million dollars. a GE used
improper accounting methods to increase its reported earnings and or revenue and avoid reporting
negative financial results (SEC Emblem, 2020). a GE misled its investor by not disclosing the failures
of its power and insurance businesses. a Additionally, they failed to tell the investors also that they
were taking future cash revenue and applying it to current financial statements and did not
disclosure this within the financial statements for investor to understand. This would give the
investor a smoking mirror in regards to the companies financials and would have them invest into
GE thinking that it is profitable. a These unethical behaviors cost GE big deal of capital. a In 2017 -
2018 GE stock fell almost 75% as challenges within the power and insurance were later disclosed to
the public. Ethics behavior, I believe stems from the top. a If the executives are fully invested and
are in tuned with how the culture and ethical make up of a company is, this will hold the other
supervisors, manager, and employees accountable for the action that aren’t ethical. a This will create
a value within that everyone is accountable to the highest of standards.
References
Comply Log. (2022, June 12). 6 proven ways to prevent unethical behaviour in the workplace. Blog.
https://blog.complylog.com/whistleblowing/ways-to-prevent-unethical-behaviour-in-the-workplace/
Press release. SEC Emblem. (2020, December 9). https://www.sec.gov/news/press-release/2020-
312#:~:text=(GE)%20has%20agreed%20to%20pay,were%20disclosed%20to%20the%20public.
Bloomberg. (n.d.-a). Bloomberg.com. https://www.bloomberg.com/news/articles/2020-06-
29/wirecard-exposes-gaping-holes-in-germany-s-financial-oversight
Dow Jones & Company. (2020, June 27). WSJ News exclusive | wire card scandal puts spotlight on
Auditor Ernst & Young. The Wall Street Journal. https://www.wsj.com/articles/wirecard-scandal-
puts-spotlight-on-auditor-ernst-young-11593286933
Federal Tax Research: 12th edition |. Cengage. (n.d.-a). https://www.cengage.com/c/federal-tax-
research-12e-sawyers/9780357366387PF
