Final Flashcards
Midnight journal entries red flags
Timing- midnight, quarter end Upper management Dodged questions Before merger No consent from Asian employees
Midnight journal entries risks
New house could be lost
Physical security could be lost
Lose job and performance bonus
Lose reputation of being a team player
Midnight journal entry enablers
Upbringing- mother Has evidence- memo Good network- board, Isselman Friends in the area, job leaders Financial stability Single Experience being bullied Title as a CFO No loyalty- new to job
Whistle while you work enablers
Previous experience Knowledge of consequences CPA license Duty to profession Moral core Clarity Knowledge of GAAP Long term consequences Independence
Whistle while you work Jackie rationalisations
Her coworkers could lose their jobs if company went under
Healthsouth fraud stages
Aggressive accounting
Acquisition of other companies
Large company acquisitions
Making things up
Healthsouth fraud
Narrowed gap between patient charges and what was collected
Reclassified operating expenses to PPE assets and depreciated
Fabricated pretax earnings
Ethical lenses blind spots
Relationship-overconfidence in process
Reputation- unrealistic role expectations
Responsibilities- motive justifies method
Results- satisfies with too little good
Ethical lenses justification
Responsibility- I was following the rules
Results- I make people happy
Relationship- I wanted to treat everyone the same
Reputation- it was the best for all, as a leader I had no choice
Reputation definition of an ethical act
Consistent with good character for the particular role
Supports meaning you have given to your life
Internal whistleblowing
Reporting to higher ranking authorities in the company or board
Company hotline, anonymous, don’t get enough info
External whistleblowing
Going to external auditors and SEC
Must have evidence and proof first
Hypernorms examples
Honesty Predictability Compassion Fairness Responsibility Integrity
Accounting code of ethics
Integrity Objectivity Professional competence and due care Confidentiality Professional behaviour
Responsibilities questions
What are the rules?
How do I act in a caring way?
