Finance Ethics for Employees and Management - myassignmenthelp

Question: What is ethics and why is it important to the financial system? Answer: Ethics refer to a set of morals and principles which help the humans decide and classify as to which is regarded as right and wrong. Ethics normally relate to honesty, integrity, truthfulness, justice, and others. It is an important aspect of life, be it personal or finance. Ethics play a very important role in the financial system. (Dobson, n.d.) In the last few years the world economy has faced a huge set back due to various frauds and scandals. The Enron Scandal which took place involved one of the most popular energy companies of America. They inflated there profit and assets, and later the share price of company fell from $90 to $50.the company was later declared insolvent. Similar was the case in WorldCom scandal. Due to lack of set of principles and ethics in the financial system, the management involved fails to classify between right and wrong. The management needs to understand what is in public interest. They need to put the needs of the company and its investors above their own personal interest. This can be possible only with the help of ethics. (Hendry, 2013) Creating awareness and distributing ethical knowledge among the employees and management is very important to create an ethical environment within an organisation. Ethics help the people in taking right decision. All the companies and organisation need to work within and outside of the work ethically so that a strong financial system can be made. Working ethically will help them gain the trust of the investors and other stakeholders. References Dobson, J. (n.d.).Finance ethics. Lanham, Md.: Rowman Littlefield Publishers. Hendry, J. (2013).Ethics and Finance. Cambridge: Cambridge University Press.