Business ethics and deontology Research Paper Example | Topics and Well Written Essays - 1250 words

Business ethics and deontology - Research Paper Example It is a case of â€Å"fraudulent financial reporting†. Adelphia is a publicly traded corporation based in the United States. In 2002, Adelphia was ranked sixth among the largest cable service providers in the country. In the same year, the company was publicly accused of discrepancies in the financial reports prepared and produced by the company. It was found that the company did not represent the real economic condition and Adelphia was charged of a major accounting disgrace. Investigations proved that the managers modified financial statements of the company by excluding many billion dollars that it held as debt, from the company’s balance sheets. Hence, auditors could not discover the presence of fraudulent activities that the company indulged in. This is a major example of infringement of deontological issues. It was revealed through investigation that some of the most influential and important rank holding members of the organization lacked ethical behavioral trait s and they were the major participants in this scandal. Key ethical problems The Adelphia scandal is a case of financial fraud that broke the trust of the shareholders and lowered level of faith of the public on the company. It is the most far-reaching financial fraud that has occurred in the country in the past few decades (Markon & Frank, 2002). The company filed for bankruptcy in June 2002 and was finally purchased in July 2006 by Comcast Corp. and Time Warner Inc. Two ethical problems were distinctly identified in this fraudulent case; financial statement modification and superficial statement about stock earnings. The first ethical issue is concerning the fact that the officials in the company had strategically and systematically excluded several billion dollars that the company held as liabilities over the period of four years between 1998 and 2002. The liabilities were hidden fraudulently from the books of off-balance sheet affiliates (Barlaup, Dronen & Stuart, 2009). Additio nally, the company also inflated its earnings in order to meet the expectations of shareholders in the Wall Street. Various operations statistics were falsified and concealed (The SEC, 2002). These activities raised questions about ethical duties of the employees working in different private as well as public corporations. Deontological ethics The term ‘ethics’ is generally understood as â€Å"systematic attempt to understand moral concepts and to propose and defend principles and theories regarding right and wrong behavior† (Barlaup, Dronen & Stuart, 2009, p. 186). Normative ethics is found to be highly relevant to the issues faced business firms and the problems faced by auditors. Under the framework of normative ethics, three principal theories of ethics can be identified. These are egoism, utilitarianism and deontology. In this section, the focus would be on the deontological theory of ethics. General theory Deontological ethics relate to the â€Å"ethics of duty of principle† (Cooper, 2000, 179). The term ‘deontology’ was coined by Bentham (1748-1832) and by this term he emphasized on the following meaning. It is the act of motivating people in such as way that it would maximize overall community happiness. This would be done by mobilizing the causes that inspire specific private