Acc/291 Week 5 Reflection
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In this week we had a mixed started but a very much combined outcome. Some of the members have had personal dealings with ethics and keeping update every year on any changes that would occur or just for a fresh reminder of how companies will operate. As far as the other half that have never had to deal with accounting or something similar that can relate in some way this was a fresh look on why the Sarbanes-Oxley Act was put in place and why it is completely changed the accounting world.
The main focus this week was primary on the ethics that need to be withheld in a business setting and how it can affect a company. One of the members in our group was very familiar with some of these regulations, with having to take credited hours every year, in order to legally prepare individual and business tax returns. Business owners trying to reduce taxes using unethical accounting and record keeping procedures has been a significant issue. Ethics has been a focus by the media and government agencies because of many recent fraudulent activities. This member discussed that he had learned through the readings that similar to the IRS due diligence and attempts to eliminate unethical business activities, the Sarbanes-Oxley Act is designed to increase integrity and reduce the opportunities for employees, management, and executives to commit fraudulent schemes. Although the Sarbanes-Oxley Act has not eliminated fraud or other unethical practices it has helped and hopefully will continue making steps toward an ethical business environment.
Throughout the readings on Sarbanes-Oxley Act, it pretty much was the link to the all of the madness in accounting and why things need to be done in such a way. There will be a point in time where an individual will be put in a situation where they may be faced with a sticky situation; such as, their boss wanting to change numbers in order to make the business appear at a different stand point. With this weeks learnings we have learned that this is highly unethical and can be given serious consequences. Even with that Act in place, humans are human and they will test the system when they see an out. Throwing off numbers to make the business seem that they have a higher profit margin or how their inventory turnover is doing is extremely unethical and this weeks readings allowed us to see the why. Companies will fudge their statements for their own interest and they do so they can show a steady incline in numbers, when in fact their numbers have dropped. So they will move numbers around to show nothing has dropped from last years numbers and they are still gaining the same profit as before, even if they are not.
Unfortunately ethical behavior is something that has always, and will always be a struggle that any business will have to deal with. The business can have codes set forth that will ensure that they operate to the utmost behavior that they can, however,