Business ethics refers to the principles and rules determining morality in the current business atmosphere (Bowie 2017). However, it is also the agreement about the conduct of fairness and adhering to the established rules of the business. Most businesses tend to adhere to their stipulated ethical guidelines in a move to avoid any manipulation from the external agency.
According to the paper, there exist situations through which the government has emerged to apply forces in some companies to stick to the more advanced ethical standards. Therefore, the government should enforce policies that can effectively eradicate ethical issues like fraud and theft in businesses (Bowie 2017). For instance, in the case of Madoff convincing many investors to give out their savings in a bid to aim at realizing much profits in the future is a scum that government should pose policies to fight against fraud issues in the business field. Therefore, if the government could have enacted strict policies, such incidences could not have occurred due to the phobia of one being caught in the act. On the other hand, it is the job that may either induce someone to engage in fraudulent acts through acceptance of an offer from those parties who wants to take the lead in illegal actions (Crane & Matten 2016). For instance, it is observed that employees are conned in the Ponzi Scheme, in that they guarantee the high net returns which are equivalent to 50% profits to be invested in just a few days. Therefore, this later becomes a scum after operator takes away the existing money spent leading to a reduced amount to be invested as well as pull outs of the current investors in the mood to demand their endowment.
Nevertheless, the government may also stop excesses in business through developing forums to educate the upcoming business persons on how to invest to realize much returns (Bowie 2017). Moreover, they can be made aware of falsehood personnel whose desires are to lure the members into engaging in dubious acts in the sake of self-gains (Trevino et al. 2016). This is evident in the context where the Ponzi scheme encourages the members to take part in the evil game of strategic investment which is secretive and ambiguous. They used the financing to act as a scapegoat since all the excesses invested went to an individual’s pocket.
Nonetheless, the government may halt unnecessary excesses by using the affected individuals in courts for their actions (Crane & Matten 2016). This is evident when Madoff was sentenced to a 150-year jail term due to cases associated with money laundering. However, the sentencing of him to jail was closely followed by guilt associated with Madoff’s scheme. Besides, some employees in Madoff’s scheme were found as guilty of their roles in the Ponzi scheme. Moreover, it is evident that some individuals like Madoff’s lawyer and accountant take a jail term of about 30 years in their subject.
Specific steps government bodies could have taken to prevent Madoff
Succinctly, there are particular steps that agencies of the government could take to avoid Madoff. Some of them include the segregation of accounting duties; knowledge about one’s employees and maintaining internal controls. More so, scrutinizing business bank accounts; auditing the business books frequently and training employees with the aid of prevention of fraud could help. Additionally, protection of information on credit cards; being knowledgeable about your business partners; checking into every case as well as getting the help of experts are crucial (Trevino et al. 2016).
For starters, segregation of accounting duties: this implies that government should pose policies to ensure there is better handling of the books of accounts to avoid incidences of fraud. Moreover, businesses should employ many persons who explicitly handles client receivables, paying invoices interchangeably (Bowie 2017). This is done to keep information separately and later compare their entire relationship with the existing data across different personnel. For instance, if the Madoff’s scheme could have had better-segregated accounting duties, such fraud could not have occurred. Unfortunately, they relied on data from just one operator which gave vague information on employees’ progress of investment.
Nevertheless, every business should bring in place competent employees in their firm, and this is done in liaison with formal government recruitment (Bowie 2017). Therefore, all the emerging staffs to handle the firm’s assets like cash should be selected as per their competence at work to prevent fraud (Crane & Matten 2016). For instance, Madoff’s accountant could be chosen on merit according to competency and trustworthy in the line of work.
After that, the government should take a step to ensure that there is better maintenance of internal controls existing in businesses to be able to detect and prevent fraud (Trevino et al. 2016). This should be done through restriction of access to data on financial accounts. For instance, in Madoff’s scheme, the top management was corrupt, and there were not better controls.
The next step is that government should ensure better scrutinizing of accounts related to the business bank to examine the unknown payment recipient as well as those who want to engage in theft of assets (Trevino et al. 2016). For instance, the issue of Madoff conning employees could not be realized if the government gets involved in the scrutinizing process.
Furthermore, auditing the business books regularly as the next step ensures that areas dealing with cash are checked properly to prevent fraud (Crane & Matten 2016). This is evident when Madoff’s accountant undergoes imprisonment after an audit done on the books of account have alleged him guilty of the offense.
The sixth step is about training employees to prevent fraud. For instance, in the Ponza scheme employees could not have been cheated about vague investment. Nevertheless, credit card information should be protected to avoid business fraud (Trevino et al. 2016). This is evident when employees seemed to have availed their knowledge in the Madoff’s scheme thereby rendering them at risk of no future investment as they agreed.
The government outlines that there is a need for being knowledgeable about the business partners to avoid fraudulent actions. This is evident in Madoff’s scheme where employees were not aware of the emerging fraud after being cheated to invest in the business.
The next step is that every individual should check through every case after setting up the measures for prevention of fraud (Trevino et al. 2016). This is evident in Madoff’s scheme when employees never checked into cases to be aware of their security. Finally, there is a need for experts to help. This is basically through the hiring of a certified accountant to assist in the initiation of better expertise on the organization’s performance (Crane & Matten 2016). This is evident in Madoff’s scheme the only expert they had was corrupt, and this made them evacuate from the plan of investment.
Bowie, Norman E. Business ethics: A Kantian perspective. Cambridge University Press, 2017. (Bowie 2017)
Crane, Andrew, and Dirk Matten. Business ethics: Managing corporate citizenship and sustainability in the age of globalization. Oxford University Press, 2016. (Crane & Matten 2016)
Trevino, Linda K., and Katherine A. Nelson. Managing business ethics: Straight talk about how to do it right. John Wiley & Sons, 2016. (Trevino et al. 2016)