Corporate Ethical Values
In a recent article, Richtermeyer, Greller, and Valentine (2006) applied a measure known as the "corporate ethical values (CEV)" scale while looking at the differences in ethical value ratings across several job categories, industries, certifications, and organizational size. The focus of the research was on the accounting and finance professions which the authors describe as having received increased attention in the wake of recent corporate scandals involving such major companies as Enron, WorldCom, Tyco, and Arthur Anderson. Richtermeyer, Greller, and Valentine (2006) believe that accounting and finance professionals, though knowledgeable regarding the measurement of corporate performance in many dimensions, may know less about the manner in which companies are evaluated from an ethical standpoint. In light of the provisions of the 2002 Sarbanes-Oxley Act (Public Law No. 107-204, 116 Stat. 745), accounting and finance professionals and the companies
The idea of using an instrument such as the CEV described by Richtermeyer, et al (2006) to perform a survey of managers and others in a corporation is an excellent idea. Though Richtermeyer, et al (2006) do recognize that in a world that is characterized by rapid change and a climate of uncertainty there are new challenges of an ethical nature to be addressed, the reality is that ethical behavior ought to be the cornerstone upon which any organization, regardless of its product or service focus is built. Certainly, the creators of this legislation were responding to devastating ethical failures that rocked corporate America in the late 1990s and early 2000s. Though brief, this survey, which contains five items to be answered with a scaled response, addresses key issues regarding the degree to which companies and their managers behave ethically or compromise their ethics in the pursuit of business gains. It is an unfortunate commentary on the American corporation that the government needed once again to step in and create new regulatory systems and enhanced criminal penalties to punish the very individuals in corporate America and in the accounting and finance professions who ought to adhere to the highest standards of ethical conduct. with which they work are now subject to more rigorous reporting, accountability, and regulatory oversight than ever before (Sarbanes-Oxley Act, 2006). Any organization would benefit from this kind of self-assessment. Even businesses that are themselves finance or accounting firms would benefit because, as the case of Arthur Anderson reveals, even members of these professions have failed to live up to the ethical codes which ought to shape their work. Had the companies generating these scandals used an instrument such as the CEV and had they then chosen to act to eliminate unethical behaviors, it is quite possible that some of these scandals could have been avoided. The Sarbanes-Oxley Act's major provisions include the requirement that public companies evaluate and disclose the effectiveness of their internal controls as they relate to financial reporting and that independent auditors for such companies attest (agree or qualify) to such disclosure. Additionally, a major thrust of the Act is to institute enhanced criminal and civil penalties for violations of securities law and to create the Public Company Accounting Oversight Board (PCAOB) (Sarbanes-Oxley Act, 2006). The authors suggest that using CEV across different departments, organizations, and industries can provide information that highlights the degree to which a company practices high ethical standards. Improving ethical perceptions within businesses is now very much the responsibility of finance and accounting institutions and their employees in part to restore public trust in accounting and reporting practices and in part to prevent the kinds of corporate collapses that damage all stakeholders (Sarbanes-Oxley Act, 2006). It is the position taken by Richtermeyer, et al (2006) that by using the CEV scale, accounting and finance professionals can obtain information regarding corporate awareness of the effectiveness of internal ethics policies - information that can be particularly useful in making decisions regarding issues of accountability and transparency.
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Acceptance Essays
