Global Business - FVC1 Mod 6

internal control

, as defined by accounting and auditing, is a process for assuring of an organization's objectives in operational effectiveness and efficiency, reliable financial reporting, and compliance with laws, regulations and policies.

Morals

-a person's standards of behavior or beliefs concerning what is and is not acceptable for them to do.

Corporate social responsibility (CSR)

-can be defined as the ethical role of a corporation in society. The aim is to increase long-term profits and shareholder trust through positive public relations and high ethical standards. It is not enough for companies to generate a profit and merely obey the laws in their business operations. I

Preventing Irregularities

: (1) Segregating employee duties (2) Assigning specific duties to each employee: (3) Rotating employee job assignments: (4) Using mechanical devices: (5) Keeping records:

(4) Using mechanical devices:

Check protectors, cash registers, and time clocks make it difficult for employees to alter certain company documents and records.

(5) Keeping records:

Inaccurate or inadequate accounting records serve as an invitation to theft by dishonest employees because they can be concealed more easily. Companies should maintain complete and accurate accounting records. For optimal control, source documents should be serially numbered.

Organizational ethics

is how an organization ethically responds to an internal or external stimulus.

(3) Rotating employee job assignments:

This discourages employees from engaging in long-term schemes. Employees realize that if they steal from the company, the next employees assigned to their positions may discover the theft. Frequently, companies have a policy that all employees must take an annual vacation. This policy also discourages theft because many dishonest schemes collapse when the employee does not attend to the scheme daily.

(2) Assigning specific duties to each employee:

This ensures that a particular employee is accountable for a specific task. Should a problem occur, the company can quickly identify the responsible person, trace lost documents, or determine how a particular transaction was recorded.

(1) Segregating employee duties:

This requires that someone other than the employee responsible for safeguarding an asset maintains the accounting records for that asset. This minimizes the probability of an employee being able to steal assets and conceal the theft.

UN Global Compact and Global Reporting Initiative

an agreement to align their work and develop a reporting framework in order to rank commitment to CSR. To date 5,800 businesses have joined, making it the world's largest corporate responsibility platform.

Discrepancies

are best described as accounting errors that are not intentional.

Social norms

are not identical in different countries, and ethical standards can vary as well. A business may operate in a country that permits actions that would be considered unethical under that business's ethical code.

Cultural norms

are the shared, sanctioned, and integrated systems of beliefs and practices that are passed down through generations and characterize a cultural group.

Ethical behavior

be it at the organizational, professional, or individual level, is a direct representation of the principles and values that govern the individual and the organization represented. Organizations create an internal culture that is reflected externally as organizational values. These values affect the relationships within the organization, productivity, reputation, employee morale and retention, legalities, and the broader community in which they operate.

Business ethics, also called corporate ethics

is a form of applied ethics or professional ethics that examines the ethical and moral principles and problems that arise in a business environment. It can also be defined as the written and unwritten codes of principles and values, determined by an organization's culture, that govern decisions and actions within that organization. It applies to all aspects of business conduct on behalf of both individuals and the entire company. In the most basic terms, a definition for business ethics boils down to knowing the difference between right and wrong and choosing to do what is right

The primary purpose of internal controls

is to help safeguard an organization and further its objectives. Internal controls function to minimize risks and protect assets, ensure accuracy of records, promote operational efficiency, and encourage adherence to policies, rules, regulations, and laws.

Ethics

moral principles that govern a person's behavior or the conducting of an activity.

unethical practices examples in business operation. Example 2:

the Enron scandal, in which the U.S. corporate giant fooled regulators with fake holdings and an "off-the-books" balance sheet (Segal, 2019).

unethical practices examples in business operation. Example 1:

the WorldCom scandal, in which the telecommunications company conducted fraudulent accounting and used company shares to borrow money (Kenton, 2019). I

irregularities

which are the intentional misrepresentation of accounting data with the aim to defraud.