Ethics Is The Practice Of Performing At A Level Of Right Rather Than Wrong

1866 Words Apr 14th, 2016 8 Pages
Freddie Mac: Scandal of 2003
Alex Ceja
Eva Lucatero
Darrah Bonander

Reedley College

Ethics is the practice of performing at a level of right rather than wrong. Pertaining to or dealing with morals or the principles of morality. Being ethical is the highest standard for a business and is expected in every profession or career. One word that describes the term ethics would be truthfulness. Employees are expected to be truthful with the work they do. That means no falsifying records, any embezzlement, etc. If a person were to witness an action being unethical then they should immediately report it. The success of any business depends on the workers acting ethically. Workers need to realize that other employees are affected by decisions that are deemed unethical. If businesses do not follow the code of ethics, it will be involved with misleading financial statements, frauds, etc.
Freddie Mac’s accounting problems were different compared to other companies such as Enron and WorldCom. “The company said that it had manipulated its earning to meet Wall Street’s desired objective of steady earnings growth”(Khan, 2004). Freddie Mac understated its net income by roughly $5 billion for more than three years. A report from the Office of Federal Housing Enterprise Oversight had stated, “Freddie Mac cast aside accounting rules, internal controls, disclosure standards, and maintain adequate internal control systems” (Glater, 2003). In the beginning of 2003 when…

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