Bernie Ebbers was the CEO of WorldCom up until he was convicted of fraud when it came to accounting on several different accounts. During trial he said he was not aware of this unethical behavior. In addition to his indictment, several other CEOs were also put on trial for similar behavior. To read more on the topic, here is the article:
http://money.cnn.com/2005/03/15/news/newsmakers/ebbers/
Although this article is on the older side, these events lead to the passing of the Sarbanes-Oxley Act of 2002, discussed in Chapter one of the text book. Ebbers' defense was that he was not aware of the corrupt accounting practices that were going on in his organization. The Sarbanes-Oxley Act is a collection of eleven requirement that focused on taking much more responsibility as to what is going on in relations to the financial reporting. Organizations should always be conscious of ethical versus unethical behavior--it should not have to get to this level. According to the text, this act is supposed to help cut down on long-term unethical behavior. However, if organizations are continuously being ethical, they can end up saving money in the long run-they will avoid litigation costs.
Why do you think organizations continue to practice unethical bookkeeping/behavior overall? I feel as though, at least a large part of the time, they will eventually get caught, is it really worth it?
Posted by: Jenny Liechti
No comments:
Post a Comment