Unfortunately, in recent times, we have seen a number of examples of unethical behavior in organizations, often tied to the organization's handling of finances. In this question, discuss ethical issues facing the top leadership or financial managers in today's corporate environment regarding their approach to the financial matters of the firm. What pressures exist that might encourage unethical behavior, particularly as it pertains to the firm's financial reporting or situation? How might these be mitigated? (You might want to conduct a search to identify examples to examine actions suggested or taken to help mitigate these instances).
One of the main problems is that many companies tie company earnings or performance to management's bonuses. This can mean big trouble, and it is one of the prime motivators for unethical decision-making in companies. When this happens, management is often temped to manipulate accounting transactions and other areas of financial performance to keep net income high, because if they don't, it means losing out on their bonus. This is also one reason why a few of the bigger companies have stopped this practice, and started offering other ways to measure how bonuses should be awarded, where they're not directly tied to earnings. ...
The solution provides a detailed explanation discussing what pressures exist that might encourage unethical behavior, particularly as it pertains to the firm's financial reporting or situation and how these could be mitigated.