Unethical Financial Practices

Are you a business owner, manager, any employee whose business financial practices are unethical? You may hate that question or find it insulting, but here are some things to think about. In the posting Is That Really the Truth? I touched on why truth matters so much. Now let’s look a little more at that.

Some Financial Background

I was prompted to write this article by my conversations with other people who were dealing with clients wanting to use questionable practices. The details are not what matters here. What does matter is being clear on what are ethical and what unethical financial practices. Now I’m realistic, so I realize that some areas are not as clear cut, but that in no way eliminates the need for good ethics. It is actually somewhat sad that some states feel the need to place an emphasis on ethics education for CPAs. Is it just me or do you also think that people should understand right and wrong without any special training? That in no way eliminates the need for understanding financial and accounting regulations that if violated would be an ethical breach. That said, fundamentally the practice of right and wrong is not really an educational issue. It’s a character issue.

Why It Matters

There are several reasons why practicing good (no make that excellent) ethics matters. First, there are the legal consequences. I recall an instance when I was an employee where the business owner routinely conducted highly questionable actions. Not matter how hard I tried it seemed that as soon as I managed to get him to change one practice he would start another. It was an incredible relief when I moved on from there. In another case a client had a number of things going on that clearly were unethical financial practices. Now here is the bottom line. Both of those companies ended up with serious legal trouble and ruined finances. In one of them an owner was convicted of a serious crime. Both went out of business and that is the second consequence of poor ethics.

out of business

What About Your Company?

Examine yourself and your company closely. Are there areas where you are shaving the truth because it’s convenient or maybe seems to be to your financial advantage? If so, here is my advice. STOP IT. You can choose whether or not you take that advice, but in your heart you know any unethical financial practices you are involved in need to stop. That leads to another reason to do the right thing. You will like yourself a whole lot more. Let’s face it. You want others to deal honestly with you, don’t you? So, do the same with others.

If you want to know more, contact AimCFO – Contact

As always, your comments are welcomed.


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