Ivan Madrigal

Instructor Wendy Gunn

Accounting 2010

26 February 2020

Reflective Essay on Personal Ethics and Financial Reporting

This topic is very applicable to my current job position. For a little over a year, I have

been working in customer service for an online retailer. They strive to empower agents to make

judgement calls. Almost on a daily basis, I make many decisions on what a just outcome is for an

unfortunate customer experience. The challenge lies in trying to take care of the customer and at

the same time also being fair to the company. While it may be the case in most situations that

keeping the customers happy is most likely what is best for the company in the long run, I don’t

want to abuse the company’s desire to have returning clients. It’s inherently easier to justify

taking advantage of the faceless conglomerate the company may be than to tell an individual we

can’t give them what they may feel they deserve.

I believe that when it comes to financial reporting, the possible victim of fraud can be

dehumanized or isn’t immediately recognized, this can open the door to the rationalization to

commit fraud. When we don’t know who we are hurting someone, or we convince ourselves that

fraud won’t hurt anyone, then it becomes that much easier to go beyond our personal ethics once

the negative consequences are harder to identify. In the case of stealing from a larger company,

it’s plausible to think that taking a relatively small decision would never end up hurting a

specific person.

Concern about our fellow individuals is one part of the personal ethnics that deters fraud,

but from my example of dealing with larger companies, there needs to be another layer to our
ethics in order to avoid fraudulence. I am reminded of the quote, “the true test of a man’s

character is what he does when no one is watching”. To illustrate my point, I would say that the

true test of character is what he or she does when they believe they are not hurting someone.

Many of us wonder where character or someone’s ethical beliefs come from. As we have

seen many cases of fraud throughout history, it becomes obvious we have varying levels of

ethics. It is not something we are born with, but rather personal ethics are learned. We are

deemed accountable when we develope a sense of what is right and wrong. That comes from

being taught by those around us and from observing the norms of world we live in. I think even

when were taught to do something wrong, by observing we’ll learn its wrong, but we can also

learn to justify it enough for us to believe it’s something we can do. What level of importance do

we apply to doing what is right, and what would it take for us to knowing do something wrong?

What leads to fraud is opportunity, motivation and rationalization. In financial reporting,

the opportunity could be the access to abuse monetary assets. We may tend to be motivated by

greed and then rationalize our poor ethics because we’re stealing from a company and not

hurting anyone. Fraud can also be seen as small and thus easier to rationalize like not working on

the clock or expensing a meal that was not work related. In my experience, the vast majority of

people have strong ethics, but it can be easily to justify what feels like small misdeeds. I could

give customers all the free orders and credits they want, I probably wouldn’t have a job much

longer, but I would also be making exceptions to and eventually redefying my own personal

ethnics just because it was the easy thing to do. My invitation would be to define your own

personal ethics and be more cognizant of the small things that could be redefining you.

“Character is one's moral and ethical code, and integrity means that one lives according to that

code.”