Explore various situations in the business environment related to ethics.

Assignment Objective–The goal is to provide an assignment that will allow the student and instructor to explore various situations in the business environment related to ethics. Through answering the assigned questions along with discussion in class, the student should develop a good understanding of the role of ethics in the business environment.

Assignment: Provide typed answers to the following questions and be prepared to discuss

in class.

1. Define ethics–Include the reference for your definition.

2. (a) What is insider trading? (b) In your opinion, is it ethical? explain (c) Is it legal?


3. (a) What caused Enron’s collapse? (b) Did management act in an ethical manner?

(c) Were there any potential(or real) ethical issues related to Arthur Andersen’s role

as Enron’s auditor and another part of Andersen providing Information

Technology Consulting?

4. (a) What accounting practice/standard/rule was not followed at WorldCom? (b) An

employee in the accounting organization warned management of the implications/

dangers of not following appropriate accounting standards. He was fired. Was it

ethical, in your opinion, to fire the employee? Explain your thoughts/answer.

5. Some companies have “Codes or Standards of Conduct” which are published and

employees are expected to abide by the standards in conducting company business.

The objective is to protect both the company and the individual. A private phone

number along with a promise of anonymity is provided. Employees are given the

opportunity to call the number if they feel they are asked to do something contrary to

the “code” or are convinced someone else might be. (a) Is this private number an

ethical procedure on the part of the company? please explain your answer.

(b) Would it be ethical for you to call the number if you were found in a situation

that warranted a call? What if it were your boss that you were concerned

about—how would you handle the situation??

6. During the recent financial crisis related to housing/loans/various financial instruments,

it was found that individuals were provided a low, introductory interest rate that would

reset at a much higher rate in a future period. (a) Was it ethical to provide a loan to an

individual when it was unlikely they would be unable to continue paying after the

interest rate increased? please explain. (b) Was it ethical for an individual to take the

loan if in their mind it was highly likely that they would not be able to pay the loan

when the rate increased? please explain.