Ethical Challenges and Agency Issues

When an agent finds out that they argon outlet overbud get down water or over the allotted era limit the most detailed segment is open converse. With open communication it gives management more drum out warning earlier in the budget cycle to make changes that fag get the project back on track. The most important element management needs is ample time to make corrections to exert the project on budget and within time constraints. The more time management has the better their chances ar of getting the proper resources aligned to get the budget back under control.If the budget issues are due to the thickening no(prenominal) properly keeping records, the function could word the contract in a way that allows provisions for adjustments which would enable the situation to form a financial or time resolution with the lymph node. A contract that allows for those types of adjustments limits agency issues and will keep a better deforming relationship amongst the two parties. Th e main issue is deciding what party is liable or accountable for an overbudget project.If the agency suffer demonstrate why the budget is aside to the client and be able to charge extra for the additional work the agency could delegate more resources to get the project completed in time as well. It is critical for the agency to have open communication between its team members, but it is just as crucial for the agency to be h atomic number 53st with the client as well. The ethical issue that arises with cosmos overbudget is that individual employees dont want to be penalized or smell repercussions for their performance so they delay piece of musicing results to management.When employees are afraid to report shortfalls earlier in the process it can lead to higher be and major agency issues. The sooner the agent can show the client that planning or reporting issues are occurring they can make life-sustaining decisions to get the project back in line. Employees need to objective ly bet about others involved in their future with the comp all and client. As grand as individuals clarify expectations and apply moral philosophy to a situation it is thinkable to get a project back on budget. The agency can delegate more resources to an area that needs more manpower or money to get the project completed as promised to the client.Executive pay back Analyzing the ethical challenges as well as any agency issues in the Level of Executive Pay Case Study brings forth unfathomable issues in the New York Stock Exchange. To better analyze these issues one rootage has to ask oneself the following question, what is the true definition of ethics. Wheelw dependable defined ethics as that branch of philosophy which is the systematic arena of reflective choice, of the standards of make up and wrong by which it is to be guided, and of the goods toward which it may ultimately be directed. Did Mr.Richard (Dick) Grasso desecrate any ethical standards set forth by the organ ization he was representing did he really violate the systematic study of reflective choice, of the standards of right and wrong? In order to get a straight purpose to this question it will dependent in which side of the fence one might find oneself in if you are on the side of the flourishing ones that happens to shed light on this outrageous sums of money then the answer would be no. But if you find oneself in the other side of the fence with the individuals who pretend an average salary that would never get the opportunity to r all(prenominal) the levels of noblesse that Mr.Grasso reached then the answer would be yes.The ethical roles on all companies tamper a big role on the decision making of each enterprise. Before and after Mr. Grasso was hired it was customary to compensate contribute positives with these greathearted sums of money. Top officials in the big board never had to disclose their earning to the man or to the sulphur before so its hard to say any ethical standards were bent or even broken. This type of compensation to top off NYSE officials was customary and there were no real intentions to misguide or mislead the public or the SEC.Just because not everyone in the NYSE had access to potentially earn this outrageous sums of money will quest to the public that these individuals were directly involved in unethical behavior. All companies in todays business society have a polity of conduct implemented but this does not means that it is being followed. What companies are doing is creating rewards methods in order to retain the services of these top business gurus that would patron their business to maximize their profits and Mr. Grasso track record spoke for itself. These inducement programs can help businesses to minimize any unethical attempts to their code of conduct.The customary public and the SEC are outrage because of the outlandish compensation top NYSE officials receives but at no point during the case study it mentions t hat these top officials have a salary cap. One believes that since there were no salary cap on how much NYSE officials might earn there are no ethical implications that could discourage NYSE official from making these large sums of money. What one does believe is that if there are realised codes of conduct and employees or management violates them, there should be strict actions interpreted to prevent the problem from worsening.One believes that all employees including management needs to concern the highest level of ethical conduct if a company wants to be successful. 1933, 1934, and SOX The financial information users usually rely on opinion of independent auditors to make important economic decisions. To protect users interest from fraudulent financial pedagogy, protection acts of 1933, 1934, and SOX joined in to ensure adequate information disclosure. The acts provide regularization that goes beyond and requires more extensive disclosure than GAAP to govern corporeal fina ncial activities.For example, companies must fill audited annual and unaudited interim financial statements in conformity with regulation S-k. In addition, the regulation S-K governs the footnote disclosure in the financial statements. Congress enacted the acts after the stock market crash in 1929 to regulate the trading of securities to the public. For this reasons, security trading companies must register with SEC prior to issuance of security to ensure that information presented to investor for making method of accounting decisions is correct.In the aftermath of the famous corporate accounting scandal (Enron) that fluctuate the world market, congress enacted the Sarbanes- Oxley Act (sox) to strengthen corporate accountability and establishment of public companies. The provision increases the CEO and auditors responsibilities. CEO and other top administrator must certify that company financial statement and other disclosures are fairly presented in accordance with GAAP. In oth er words, CEO is responsible to ensure that material misstatement does not exist in the financial statement presented to the users.SOX also authorize the Public Company accounting Oversight progress (PCAOB) to oversee the activities of the registered accounting firm. This changes the way auditors plan, implement and report the audit. The provision increases penalties that could affect an accountant who is involve in the destruction, alternation, or falsification of records in national investigations. Any violation of such may be subject to fines and duress of up to 20 years, additional training, new quality control procedure, abrogation of firms registration, and barring from participating in audit of public companies.