Most Significant Elements Needed in the Universitys Code of Ethics - Report Example

A of Ethics Christine M. Gallegos Grand Canyon Fiscal Management in Higher Education EDU-822-O101 Dr. Sherion Jackson February 11, 2015 A Code of Ethics Introduction The University is dedicated to conducting its operations in line with the highest benchmarks of business ethics and accordance with all relevant laws, regulations and rules. Specifically, the University is committed to comprehensive, clear and accurate financial management and reporting. This Code of Ethics applies to the Finance Department and its entire staff. Employees in the department must not only adhere to this Code, but they must also participate in and encourage honest and ethical behavior and comply with the institution’s Code of Business Conduct. They must also comply with other University rules and regulations that define the conduct of the institution’s operations. Financial integrity is crucial to the University’s image among students, suppliers, government agencies, rivals, regulators, employees, business partners, professional advisors, and investors. In short, the University’s financial integrity is an invaluable asset. This Code is aimed at helping the finance department to understand and uphold those expectations of conduct that are placed on all employees working there. Consequently, it will influence the books and records, financial transactions, finances, and public disclosure of the University. Most Significant Elements needed in the University’s Code of Ethics The most important components required in any Code of Ethics are the terms and conditions the signatories are expected to comply with and the consequences of failing to comply with those terms and conditions (Helms, Henkin, and Murray, 2005). It is important to recognize that different institutions have different terms and conditions that are, in some cases, specific to their operations. Consequently, the elements in the Code of Ethics for the finance department of an institution of higher education may be markedly different from those of the health department. In addition, the elements in the Code of Ethics of a media house may be very different from those of an investment firm. These terms and conditions and the consequences are often represented as clauses, which are numbered for ease of reference. For this case, which is a university, the most important elements include the following: University Books and Records The University is heavily dependent on its financial records for exercising its legal rights, presenting ideas and reports to investors, press and the government concerning the University, and for making strategic business decisions. It is vital that these records be not only accurate but also complete. They must also be kept and disposed of in line with relevant professional benchmarks and University data and record retention standards. It is the responsibility of the finance department to ensure that any University records prepared by you meet this expectation, and any records you control or hold are kept strictly in line with published University document retention rules. Relevant laws and University regulations require the University to maintain books and records that reasonably and accurately portray its transactions and the status of its assets. Falling short of these requirements may imply a breach of the law. Staff must ensure that all University documents are filled truthfully, precisely, promptly, and properly validated. All financial transactions must be kept in adherence to all relevant regulations and accounting standards and in line with common accounting principles, stipulated by the University and the relevant law. The finance department must not falsify entries or documentation (Goodman, 2009). Employees are strictly forbidden from creating false reports under the University’s name. In addition, no created accounts or payments should be used in any way other than that stipulated by their supporting documents. The department must not create or maintain secret funds or assets. No worker in the finance department may act in a way intended to defraud, manipulate, mislead, influence, or pressure any other University employee or director, or an external solicitor for the University, with the intention of rendering books and records false or misleading. The Chief Legal Officer and the Chief Finance Officer must be informed of all current and potential mistakes or misstatements in the University’s books and records (Ho, Mozes, and Greenfield, P. (2010). All employees in the finance department must fully cooperate with the University’s external auditors. Finally, the University intends to uphold all rules and regulations associated with record preservation and retention. Employees in the finance department must not damage selectively or keep outside University premises University records. Internal Accounting Controls and Procedures All staff responsible for internal accounting controls and procedures must understand the University’s rules, regulations, and procedures, and University books and records must satisfy their expectations. • Staff must strictly follow the framework of internal accounting and disclosure control. This includes all the internal reporting duties allocated to him or her by the University. • All staff must report to their supervisors in a timely manner, and in accordance with University policy, any important event (positive or negative) that occurs in the course of their duties. This includes those that influence the University and its associates. • All employees must be honest and frank in discussing issues related to internal controls and business reporting with the University’s management, external auditors, and external lawyers. • Employees must report any actual or potential violations of the University’s internal controls to their superiors. They must also report, promptly, any actual or potential fraudulent or suspicious activities they encounter. Inappropriate influence in Auditing The University prohibits all employees in the finance department from acting in a way that is aimed at improperly influencing, manipulating, misleading, or pressuring any public accountant involved in the auditing of the financial statements of the University with the intention of making such statements materially false. It is important that staff in the finance department act in a way that promotes and maintains the credibility of its disclosures and its financial integrity (Lapovsky, 2007). To ensure adherence to this rule, no employee or person acting under the instruction of other employees, shall: • Offer bribes or other monetary incentives. • Supply an auditor with false or wrong factual, legal, or financial analysis. • Threaten to terminate or terminating current non-audit or audit activities if the auditor does not support the University’s accounting. • Lobby or look to have another employee removed from the audit process because he or she is opposed to the University’s accounting. • Blackmail or threaten others physically. No employee acting under the instruction of the workers mentioned above shall act in a way that would inappropriately influence an external auditor’s review of the University’s financial statements. This includes (1) directing or influencing the audit firm to present an unnecessary disclosure of the financial statements, including proposing the application of improper accounting procedures; (2) failing to conduct an audit that would reveal material misstatements in the financial statements and (3) failing to withdraw an audit report that was previously release when stipulated by relevant accounting standards and (4) failing to communicate relevant issues to the Audit Committee. Theft, Fraud, and Misappropriation The University vetoes all variants of theft, fraud and misappropriation. Misappropriation and theft entail the improper acquisition of property owned by the University or controlled by the University for the benefit of others. As used in this context, theft, fraud and misappropriation comprises but is not restricted to: unauthorized disclosure of University transactions; falsification of University records for personal or other motives; fraudulent or devious acts; embezzlement; forgery of negotiable documents like drafts and checks; misappropriation of University assets; and defalcation. The University also prohibits the finance department from destroying or falsifying statements when such acts are aimed at obstructing auditing by any governmental or regulatory agency. The head of the department is responsible for identifying theft, fraud and misappropriation, and then notifying the legal officer to investigate suspected cases. Conflicts of Interest Employees must not invest, accept any reward or position, engage in any activities or business deals or otherwise behave in a way that perpetuates or appears to perpetuate a conflict of interest unless they fully disclose all facts and conditions to, and secure the prior written ratification of, the University’s audit committee (Job, 2005). Normal business entertainment or other normal social services are excluded from these reporting and approval procedures. Compliance with this Code If an employee in the finance department is aware of or suspects a breach of relevant rules, regulations, or laws or this Code, the employee must immediately disclose that information to the University’s Audit Committee. The University will not subject any employee to retaliation because of an honest report of a potential violation. Breach of this Code can result in disciplinary measures, up to and including termination. The Audit Committee shall stipulate, or select the right people to stipulate, due action in lieu of breach of this Code. Waivers If an employee in the finance department wants to pursue a waiver of this Code, he or she must disclose the full conditions to the Audit Committee. Changes to and exceptions of this Code will be publicly reported as required by relevant laws and regulations. Accountability By signing this Code, the employee named below accepts that he or she has read, comprehends and agrees to adhere to this Code and to be liable for his or her actions vis-à-vis this Code. Signature Printed Name Date The need for a Code of Ethics A Code of Ethics is an embodiment of an organization’s culture and identity. Different organizations have different Codes because they have different roots, goals, and modes of operation. Apart from preserving an organization’s culture, a Code of Ethics indoctrinates employees in this culture so that they understand their roles and the DNA of their employers (Klimova and Semradova, 2013). Research shows that employees with a greater appreciation of their company’s identity and culture tend to contribute more to the success of the firm. This is because they relate to it on a deeper level, not just as employee and employer. Finally, a Code of Ethics shows the public that an organization has values and is committed to a specific cause; it is not just out for profits. The Commitment to Ethical Principles necessary for a Code of Ethics Any well developed Code of Ethics requires a high level of understanding of and commitment to ethical principles to be effective. The Code’s target (employees) must appreciate it; their relationship should not be strictly obligatory (Rifkin, 2014). Employees must also be morally and ethically upright for any Code of Ethics to work as expected. In addition, senior management often has a deeper understanding of Codes of Ethics and must dedicate themselves to the development, implementation, and preservation of their organization’s Codes. References Goodman, R. (2009). Thriving through recession. The New England Journal of Higher Education, 23(5), 13-14. Helms, L., Henkin, A. B., & Murray, K. (2005). Playing by the rules: Restricted endowment assets in colleges and universities. Nonprofit Management & Leadership, 15(3), 341-356. Ho, G., Mozes, H., & Greenfield, P. (2010). The sustainability of endowment spending levels: A wake-up call for university endowments. The Journal of Portfolio Management, 37(1), 133-146. Job, J. R. (2005). The down market and university endowments: How the prudent investor standard in the uniform management of institutional funds act does not yield prudent results. Ohio State Law Journal, 66(3), 569-613. Klimova, B., & Semradova, I. (2013). Innovation in Tertiary Education and Professional Codes of Ethics. Procedia - Social and Behavioral Sciences, 83(6), 161-164. Lapovsky, L. (2007). Critical endowment policy issues. New Directions for Higher Education, (140), 99-110. Rifkin, R. (2014). What Can Ethics Codes Accomplish? Public Administration Review, 74(1), 39-40. Read More