After viewing Aika Kim’s post of accounting fraud and thinking about the current news about Wells Fargo’s scandal, I realized that financial fraud has become a great issue currently.
In Kim’s post, she mentioned two companies that have committed accounting fraud–Wells Fargo and Weatherford International. As can be clearly seen the only reason that drove them to be in the illegal position is money. Once the firms manipulate their accounts, they could easily get billions of money. In Kim’s opinions, companies which make false accounts have changed their intentions from customers’ wellbeing to maximum profits as well as having poor entrepreneurships. Also, she thinks that eventually, the disadvantages of manipulating accounts would be much more than the advantages.
From my perspectives, I agree with Kim’s ideas. I have read lots of news says that some companies use inferior raw materials to reduce costs and therefore to have a bright view of financial charts and statements. All they care is the profits they make but not the basic concern–customers’ wants. Moreover, a company runs by its stakeholders and entrepreneurship. As a result, it is mainly their ideas to cook the books, which could help the company evade large amounts of tax and maybe obtain some subsides in addition to achieve more profits. This illegal action reveals that the company has administrators with low moralities. However, though firms which make fake accounts could get numerous money at the first time, they will eventually get the larger amount of penalties due to their irresponsible decision.
Furthermore, my additional viewpoint is that manipulating accounts is a significant cheat to the publics, stakeholders and governments as the firms would give unveracious financial reports and it’s unfair to other companies which comply the laws. For instance, the more tax they evade, the less social contribution they make. At the same time, most of those illegal money goes to entrepreneurship’s pockets, who generally do not lack of money. This amount of money could have helped more homeless people or endangered animals. As a result, there is no wonder why companies which commit accounting fraud usually face social criticism and large fines.
“Money makes the mare go.” However, Business Ethics and laws are always above all else in the commercial world. Every company should take the responsibilities and operate integrity business.
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References:
Aika Kim’s Blog: https://blogs.ubc.ca/aikakim/
Weatherford International’s Accounting Fraud: http://www.wsj.com/articles/weatherford-international-to-pay-140-million-civil-penalty-1474995424
Wells Fargo’s Accounting Fraud: http://www.nytimes.com/2016/09/27/business/dealbook/wells-fargo-workers-claim-retaliation-for-playing-by-the-rules.html ; http://news.sky.com/story/wells-fargo-boss-john-stumpf-gives-up-41m-over-bonus-fraud-10596561
