Thursday, October 24, 2019

Ethics Article Review Essay

Ethics in accounting and financial decision-making has received increased attention due to large corporate scandals such as WorldCom and Enron in recent years. Legislation such as the Sarbanes-Oxley Act has attempted to make corporations more transparent to internal and external stakeholders. After analyzing the 2005 article by Richard Bernardi and Catherine LaCross, Corporate Transparency: Code of Ethics Disclosures, recommendations will be made to improve ethical foundations at the San Quentin State Prison based on the parameters outlined by Sarbanes-Oxley. In the Corporate Transparency article, the key point is made that along with changes in the accounting practices, disclosing a code of ethics to the public will ensure better internal compliance with ethical practices. Those organizations that did not publicly disclose codes of ethics were less likely to truly conform to ethical practices required in the Sarbanes-Oxley Act. The Sarbanes Oxley Act of 2002 was legislation enacted in response to large corporate scandals. The Act calls for public corporations to publicly disclose all financial statements, store all electronic records for five years and these rules are governed by the SEC (Spurzem, 2006). Sarbanes Oxley has impacted organizations in that accountants and financial decision makers are open to public scrutiny based on the public financial statement disclosures and IT departments must adequately create and maintain corporate archives that are cost effective and in compliance with legislation (Spurzem, 2006). Organizations have been impacted financially by having to add extra resources to maintain compliance and avoid fines. According to Bernardi and LaCross, â€Å". . . one example of a ‘best practice’ in transparency is a corporation making its code of ethics readily available for public scrutiny on its website (par 1). † Corporations increase legitimacy with openly stated code of ethics and websites are an economically feasible avenue for making a particular code available to the public. The article argues that organizations that go beyond the basic requirements of Sarbanes-Oxley and declare a universal code of ethics show that the organization is willing to ‘walk the talk’ of ethics. SEC chairman Donaldson is quoted as saying â€Å". . . going beyond mere adherence or conformity to new dictates and of Sarbanes-Oxley: responsibilities that rest at the very heart of their obligation to create a corporate culture of transparency and accountability (Bernardi, 2005, par 6). † Integrating ethics into a corporate culture is extremely effective in ensuring strong ethical compliance within organizations. At the San Quentin State Prison, ethics are important in many aspects of business including accounting, financial decisions, inmate treatment, medical care, and general work environment. There are many opportunities for unethical practices to take hold in a prison facility. Since the facility is closed off to the general public, self-monitoring is a crucial part of maintaining an ethical environment in all aspects of the prison business. San Quentin has the responsibility to use public tax dollars wisely and ethically as well as to maintain a corporate culture with high integrity. Based on the research findings by Bernardi and LaCross, the recommendation for a San Quentin State Prison public code of ethics will focus the entire prison cultural towards walking the ethical talk. All prison employees would be held individually responsible for maintaining the highest code of ethics across all job functions from accounting and financial decision-makers to medical employees. Ethics in business span larger than just accounting and financial-decision making. While these areas are extremely important, developing a code of ethics for all job functions in an organization is essential to maintaining an ethical corporate environment. At San Quentin Prison, an official code of ethics would guide the organization to best practices to ensure success. References,,sid19_gci920030,00.html

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