Ethical and unethical practices in finance

 

  ETHICAL AND UNETHICAL PRACTISES IN FINANACE:

ETHICS AND FINANCE:

The financial industry is a major backbone in society with consequences that can drastically change the economy and influence the personal Ethics in the financial industry are crucial as the system is largely built on regulatory guidelines and variances of trust.Major events like the housing market crash in 2007 were perpetuated by poor ethics and ultimately led to a great recession that effected most Americans and the larger global economy.

UNETHICAL PROBLEMS IN FINANCE

The unethical practices in accounting are more in proprietary, partnership and private limited companies. It is at lower levels in public limited companies and MNCs. 

Some of the unethical practices in financing and accounting are as under:

i. Deliberately delaying in payments to Vendors and Dealers commissions and promotional costs

ii. Delayed in paying wages, incentive and  bonus to employees.

iii. Holding up bills of vendors on silly reasons and then buying from others to avoid payment to earlier ones.

iv. Not prompt in statutory payments of  Tax Sales and Excise Duties. 

v. Cheating employees of their dues towards medical expenses, leave travel assistance, children education fees etc.

vi. Opening of current accounts in different banks to avoid adjustments against loans by earlier banker. 

vii. Creating bogus bills of purchase to show higher costs and hence losses to avoid bonus payment to employees. 

viii. Collecting loans from private financiers at higher rate of interest to help kith and kin and to get kick-backs. 

--This are some violations of Ethics in Finance