Effect of Unethical Behavior - Essay Example

Additionally, the malpractices may entail misusing funds via channeling them in diverse directions to cater for expenses not intended for or inappropriate. For illustration, overspending especially in a venture where the undertakers or those pioneering teams would benefit in some way. This deprives the firm of the necessary financial resources meant for boosting its sustainability or expansion and instead starts encountering difficulties in its management (Bisoux, 2005). Consequently, this financial misappropriation will indirectly feature in its accounting standings.

This would be via a meticulous study by potential investors who will notice the evident misappropriation and decline in investing in it. Since the inception of the Sarbanes-Oxley Act of 2002, numerous organizations and even regimes have recorded a growth of their economic stability (Bisoux, 2005). This emanates from the accountability, which the act has instilled especially among the individuals responsible for preparing and safeguarding the financial statements. Since, any misappropriation would yield to a grievous penalty, which in some instances may entail imprisonment.

For illustration, section 802, which entails serious fines and imprisonment 20 maximum. This is especially if an accountant tries to manipulate records either being aware or not, where the referred documents are under one’s supervision (Bisoux, 2005). Since then, financial statements have attained the reliability from the organizations and their shareholders, hence trust which earlier was nonexistent. This is coupled with regaining confidence and responsibility primarily the key top executives yielded to the effective organizations’ management.

Since each leader or individual bearing any financial liability would ensure has executed the intended role to the maximum and attain the target level of efficiency (Bisoux, 2005). Consequently, attract potential investors that would recognize the growth of each corporation prior to having any dealings with it.