Parker Jewell

Professor Anderson

Accounting 2600

10/08/2019

Financial Reporting Fraud

If you own your own financial firm, would you claim the company’s assets as your own?

An asset is an economic resource that is expected to be of benefit in the future. I, for instance,

would not use the company’s assets as my own because that will only affect the company

negatively and it is illegal. Bernie Madoff is serving a 150-year sentence in federal prison for

stealing company assets from investors. Not the way I would prefer going down yet, Fraud is a

huge problem in the white-collar industry and inherent in finance. That is why it is imperative

you learn personal ethical codes and bring them into your business. In this essay, I am going to

cover how personal ethics are developed and the connections found between personal ethics and

financial reporting.

Personal ethics are developed in many ways. Your family and the way you were raised by

your parents can certainly affect your personal ethics. Your parent’s actions and language shape

our fundamental attitudes about what is “right” and what is “wrong.” Your religious beliefs can

shape personal ethics because most of the world's religions teach an essentially similar code of

ethics that emphasizes honesty, integrity, and respect for others and their rights, as well as

selflessness. Therefore, in both business and personal situations, a highly religious person is

likely to act in ways that most of us will regard as highly ethical. But this is not always the case.

One can mentally choose any decision they want to make whether they know what is right or

wrong. The people you surround yourself with and the situations you experience can shape your
personal ethics because direct experiences can influence how you act and feel. For some people,

their values or beliefs are held strongly enough to justify certain actions, including killing others

in the name of their beliefs or committing fraud. Say for instance you get injured in a car

accident and were injured very badly. You may have a much higher opinion of the entire

automobile-injury reparations system including the police who investigated, the hospital that

provided care, the lawyers and courts that resolved any legal issues, and the insurers that helped

finance so much of recovery if you are satisfied with the results medically and financially

months and years after the accident. If, however, you felt the result was medically inferior or

legally unfair, you may well treat everyone in the system unfairly, even years later in

circumstances unrelated to the original accident, just to seek some measure of personal "justice."

There are many connections found between personal ethics and financial reporting. First,

Personal ethics affect an organization’s financial reporting decisions because anyone in an

organization can have immoral behavior and act accordingly to their own self-interest such as

Bernie Madoff. There are rules and principles, especially in accounting and finance. Bernie must

have not learned about the basic accounting principles such as the business entity concept where

a business or an organization and its owners are treated as two separately identifiable parties. The

business stands apart from other organizations as a separate economic unit. Both personal ethics

and ethical company culture are important factors in preventing corporate fraud. Imagine int the

future you go to your bank and tell them to deposit $500.00 but you give them $600.00 instead

unknowingly and the teller does not tell you about the extra $100.00, this is extremely unethical

and shows your sense of character. You could simply imply to your customer that they gave you

too much money or else there would be an imbalance on the balance sheet.
 In conclusion, Fraud is a huge problem in the finance and accounting industry. it is

imperative you learn personal ethical codes and bring them into your business. Personal ethics

are developed through family, religion, your environment and situations you encounter. There

are many connections found between personal ethics and financial reporting. Such as that anyone

can make in an immoral decision, it is up to you to decide what is right and wrong in order to

account for financial reporting. There are rules and guidelines that everyone must follow.