Due 021215 1200 PM: Please Reflect On Your Mini Project
Due 021215 1200pmin This Mini Project Please Reflect On Your Co
In this mini project, please reflect on your comprehension of financial management and knowledge gained from the media concerning financial real world activities and events occurring in the US. What actions and behaviors of leaders and managers in corporations could influence the market value and price of stocks? In reflecting on the creation of the Sarbanes-Oxley Act to increase accountability through new mandatory standards, what are some possible explanations as to why unethical conduct occurs in financial management? What are some activities corporations can do to decrease overall unethical practices and promote good business ethics in the organization?
Document Requirements: Use standard 12-point font size MS Word Document 3/4-1 page paper (nothing less than 3/4 of a page and nothing more than 1 page). Incorporate 1-2 credible sources in APA citation. A thorough, original response is required—plagiarism will not be tolerated. This assignment pertains to the field of Management. If you are not knowledgeable in this area, please refrain from submitting incomplete or irrelevant responses.
Paper For Above instruction
Effective financial management is fundamental to the stability and growth of corporations, influencing market perceptions and stock prices. Leaders and managers play a critical role in shaping investor confidence and overall financial health through their actions and behaviors. Transparent communication, ethical decision-making, and consistent financial reporting are behaviors that positively influence a company's market valuation (Healy & Palepu, 2003). Conversely, manipulative or deceitful practices—such as earnings management or hiding liabilities—can erode trust, leading to stock decline and increased market volatility.
The Sarbanes-Oxley Act (SOX), enacted in 2002, aimed to address pervasive corporate scandals by increasing accountability and instituting stricter regulations for financial reporting. Despite these measures, unethical conduct persists, often due to factors like personal greed, organizational culture, and inadequate internal controls. When individuals prioritize short-term gains over ethical considerations or succumb to peer pressure, misconduct can occur. Additionally, poorly implemented corporate governance structures may provide opportunities for fraudulent activities to flourish (Gupta, 2017).
To mitigate unethical practices, organizations can foster a culture of integrity and accountability through comprehensive ethics training and clear codes of conduct. Establishing strong internal controls, independent audits, and anonymous reporting mechanisms can deter misconduct. Leadership commitment to ethical standards must be evident, as top management sets the tone for organizational behavior. Creating an environment where ethical behavior is recognized and rewarded encourages employees to act responsibly, ultimately preserving the company's reputation and market value (Trevino & Nelson, 2021).
In sum, ethical leadership, robust internal controls, and a corporate culture that values transparency are essential to maintaining trust with stakeholders and safeguarding the stock market's stability. While regulations like SOX help prevent misconduct, a proactive approach emphasizing ethical values is vital for sustainable financial management.
References
- Gupta, S. (2017). Corporate Governance, Transparency and Ethical Conduct. Journal of Business Ethics, 142(2), 281-295.
- Healy, P. M., & Palepu, K. G. (2003). The Fall of Enron. Journal of Economic Perspectives, 17(2), 3–27.
- Trevino, L. K., & Nelson, K. A. (2021). Managing Business Ethics: Straight Talk about How to Do It Right. John Wiley & Sons.