Introduction

Ethics in leadership role is an important aspect that determines the success of an organization. Leaders have the obligation of ensuring that they help others in an organization in realizing the desired level of performance and productivity. It is however imperative noting that maintaining high ethical standards among the leaders has been missing in the recent years. Most leaders have failed to provide the required levels of leadership but they have instead engaged in greedy activities that compromise organizations core values (Mendonca & Kanungo, 2007). Leaders have in recent years failed to follow the required codes of conduct but instead there has been a tremendous rise in cases of fraudulent cases in major organizations. WorldCom, Enron, Satyam Scandal and the Madoff investment scandal are some examples of the accounting frauds that are good examples of unethical leadership.

Why accounting fraud

Accounting fraud occurs when there is intentional misrepresentation of accounting records such as sales revenues, expenses and any other item in accounting process for selfish interests. The issue of accounting fraud has been rampant in the recent years and I have been curious to understand why the vice has been on the rise. For instance in United States, the Securities and Exchange Commission has uncovered several instances of accounting frauds such as; Xerox, Freddie Mac, Lehman Brothers and Halliburton all of which had significant impact on the overall performance of the organization (Fraedrich, Ferrell & Ferrell, 2011). As a result I am still convinced that there are also several cases of accounting frauds that have gone unnoticed. Also there is need to understand the cause of the tremendous increase in cases of accounting frauds in the modern business world. The research will also enable having proactive measures that will prevent further increase in the cases of accounting fraud. Additionally, I am also pursuing a career in business and it is a topic of importance to improving my career.

The topic becomes more interesting because even as the security exchange commission puts in place stringent rules to prevent accounting fraud, the cases are still rampant. There is a major concern as to whether leaders clearly distinguish between what is wrong or what is right (Schilit & Perler, 2010). Ethical leaders are on the decline and research on this ethical issue will be essential in ensuring that corporations entrust ethical people with their accounts. It will also be imperative for leaders to be a source of inspiration to other team members. It is unfortunate that most of these accounting frauds are influenced by people in top leadership of the corporations (Mendonca & Kanungo, 2007). The unethical behavior is passed to the subordinates thus escalating the spread of this vice to people who would otherwise not engage in unethical behaviors. It is also imperative noting that the topic will help understand the different ethical dilemmas that leaders in an organization face as they try to maintain the productivity and profitability of these organizations. It is also worth noting that there are several recommendations that if followed by organizations will help reduce cases of accounting frauds in the society.

Ethical leadership

Ethical leadership is an important aspect of the overall success of the organization. It is a process that requires leaders to make ethical decisions while undertaking their duties in an organization. Accounting frauds are not a result of ethical decision making and it is therefore not a wise decision from leaders. Although some of the financial misrepresentations are aimed at creating a good image for the organization, it is important that leaders must be aware that this false presentation will not last long (Schilit & Perler, 2010). Though the decision may initially look worth, the long term consequences are detrimental to the organizational success. It is also prudent for leaders to ensure that they lead ethically. Ethical leaders ensure that they are source of inspiration to other team members and this should be upheld as they fulfill their daily activities. Leaders are entitled to steer their organizations from one level of success to another through their initiatives. Nevertheless, some leaders have had negative influence to their juniors when they drag them into accounting fraud. It has been noted that most accounting fraud cases are a result of collusion between junior officers and people in top leadership of the organization (Fraedrich, Ferrell & Ferrell, 2011).

It is worth noting that ethical leadership has both the visible and invisible part of it. Nevertheless, most leaders are obsessed with the visible part at the expense of the invisible part. The leaders who have been accused of accounting frauds have good behavior in the public and make positive statements regarding the corporations they work for. However, their leadership character is much wanting (Mendonca & Kanungo, 2007). The invisible part of ethical leadership entails the leader’s character, his decision making process, mind set and values that guide the decision making especially during tough times.  Leaders involved accounting frauds lack the moral character that makes an ethical leader. They lack courage to guide them in making decisions that will be of importance to the success of the organization. Leaders must always remain ethical as they perform their daily duties to prove that ethics are an integral part of the intellectual framework they use to understand and relate to the world (Fraedrich, Ferrell & Ferrell, 2011). It is however prudent noting that fraudulent accounting officers are unethical leaders who cannot uphold ethical values when no one is watching over them.

Opinion and conclusion about accounting fraud

Accounting fraud is an important topic in the modern economy as the cases have been on a tremendous rise. The topic outlines some important aspects that defines ethical leadership but are lacking in most leaders. For instance, perpetrators of accounting frauds fail to put aside their interests and ego for the sake of the organizations they work for (Schilit & Perler, 2010). Ethical leaders place the interest of their organizations and the community before their own interests. It is also imperative noting that such leaders fails to expand the competence and trust bestowed on them to propel the organization in the right direction. Though some of the cases of accounting frauds are as a result of ethical dilemmas, it is important for leaders to take responsibility and learn being accountable. Leaders are tempted to give wrong financial statements to cover up for below par performances experienced in their organizations. This should however not be the case but instead, leaders are required to be proactive and face the challenges head on and look for sustainable solution (Mendonca & Kanungo, 2007). It is also prudent noting that the accounting frauds have resulted to massive losses in most organizations. It is therefore wise for these organizations to have good control measures to reduce chances of accounting frauds.

Application

The issue of accounting frauds is an essential topic that provides me with insights to career development. From the topic, it is clear that most of the cases reported involving fraud is clear indication of unethical leadership. Organizations have suffered massive losses from the greedy actions of some of their leaders. Since I am pursuing a career in business, I will be strict in my decision making. I will be guided by strong values that put the interest of the organization beyond any other personal interest.

It is imperative noting that ethical leaders are always a good role model to their juniors. However, leaders who engage in accounting fraud do not set a good precedence for their subordinates. I will therefore embrace the insights from this topic in communicating the importance of upholding high ethical standards to my subordinate.  I will also try to be accountable and responsible for all the decision I make towards making my career and the organization a success (Fraedrich, Ferrell & Ferrell, 2011). If unethical behavior has been proved to have such negative outcomes, then positive outcomes can be guaranteed by maintaining high ethical standards in organization leadership. It will therefore be wise to create an environment where high ethical levels can thrive in an organization set up. Most cases of accounting frauds are as a result of lack of effective internal control within the organization (Mendonca & Kanungo, 2007). In essence, the topic emphasizes the importance of making ethics a clear priority. Ethical leaders are not only good people but are also clear and consistent with their agendas as well as being accountable for their decisions.

References

Fraedrich, J., Ferrell, O., & Ferrell, L. (2011). Ethical decision making for business. Andover: South-Western Cengage Learning.

Mendonca, M., & Kanungo, R. (2007). Ethical leadership. Maidenhead: McGraw-Hill/Open University Press.

Schilit, H., & Perler, J. (2010). Financial shenanigans. New York: McGraw-Hill.

 
Do you need an Original High Quality Academic Custom Essay?