Corporate Governance And Ethics Accounting Essay

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The study of Business ethics teaches us what is right and wrong in terms of doing business with morals, principles, rules and status. It is commonly believed also that whether business practices are acceptable or unacceptable, it is not always forthright. Although, stakeholders judge these practices by performing different roles such as investors, customers, employee, interest groups and the community as right or wrong, ethical or unethical. It also linked to virtue, rectitude, trust, liability, sheerness and social responsibility. Ethical issues are identified by business ethics is the most important issue here. Behaving righteous in business is widely seen and recognised as good business practice. In order to make profits, it is extremely essential to understand the business to certify their ongoing survival. Organisations build their own culture which may become different from those who work within them. The term ethical culture can be consider as the important for the decision making process that employees use to find out either their responses to ethical issues are right or wrong. Ethical culture also catch the norms and values that organization defines as appropriate conduct. Ethics contributes to employee commitment, it comes from employees who trust the organisation and who believe their future is bound to that of the organization, it also reflects employee loyalty and their own self esteem. Moreover, ethics contributes to investors loyalty, today investors are very much concerned about ethics, social responsibility and reputation of the company in they invest and they are looking for good returns. Investors understand that ethical culture provide a platform for efficiency, productivity and profitability. Furthermore, ethics contributes to customer satisfaction, companies need to maintain a good long-term relationship between customers. Trust is a essential part. Being good can be extremely profitable. At the end ethics contributes to profit, companies need to make a strategic planning to maximise profitability. Sufficient amount of evidence shows that having business ethics and being ethical always results in better performance.

Most companies begin the process by developing the codes of conduct. Code of conducts is formal statements that explain what an organisation expects from its employees. It is a written document that may contain inspirational statements that specifies what type of behaviour is acceptable or unacceptable. It is more likely to regulatory set of rules or guidelines. Code of conducts not resolve daily operations of ethical issues but help the managers and employees deal with ethical dilemmas by dictating or confining specific activities. From an Australian perspective: ASX corporate governance principle 3, "promote ethical and responsible decision making recommends companies have a code of conducts''. Codes of conduct suggested the six core values include trustworthiness, respect, fairness, responsibility, caring, and citizenship. Every company have a code of conduct but it is not communicated properly, a code is useless if it is not reinforced each day. Code of conducts improves the decision making and it stops the opportunity for unethical behaviour. companies must communicate the code in language that employees can understood, and companies also revise the code every year with input from organisational members and stakeholders (Ferrel, Fraedrich and Ferrel, 2011, pp.224-226 ).

Student charter lay out the expectations and responsibilities of the students and has been formulated in partnership between the university and the students. The university is committed to give welcoming, academically sound, supportive and safe environment with respect, integrity, fairness and care. To accomplish this, university undertakes to, provide high quality of education experience and also provide accurate and accessible about the assessments, timetables and contents, University consult with students about matters which affect them, carry out easily accessed, transparent and consistent policies, treat personal information confidentiality, provide a study environment free from sexual harassment or discrimination. In return CQUniversity expect from its students, to take personal responsibility for all learning journey and enrolment, behave in a appropriate manner and showing respect and courtesy for both staff and peers, to respect the intellectual property of others and not involve in academic misconduct, to avoid conduct which break the teaching, learning, research activities or safety of others. So, to some extent universities student charter relevant to our study of business ethics.

“Transparency is defined as the basic principle that people who are affected by administrative decisions, charitable work and business transactions know that consists not just the basic facts but it also includes the mechanisms and processes. Therefore,transparency is about the duty of civil servants, managers as well as the trustees to act in a understandable and predictable way.

For example,the easiest method to define the concept of transparent such as the examples of the use of light to pass through and this enable people to see through it. Hence,this concept said in order for the entity to be transparent it objects must be allowed by others to see through.At such,transparency are to be said to works along with integrity. Thus,the more the integrity,the more will be the entity or the person to be said have the values of transparency. Due to the aforesaid closeness, there are lots of people think that transparency is actually about integrity.

Transparency in terms of corporate governance is a 'basic element of a well functioning system of corporate governance'. Moreover, transparency is about answering to society and other interested stakeholders about issues which they believe are of importance. Transparency also ensure timely, exact disclosure on all the material subjects, including the financial situation, performance, ownership and corporate governance. So, it is an ethical obligation. Transparency is very important issue in today's life. If a company is very clear and report material facts easily understood, then stakeholders are willing to invest in the company. In this way it helps in reducing the cost of capital. Transparency helps to avoid the fraud and put measures in place against it. So, these measures put together helps the company to improve productivity.(Solomon 2007, pp. 143)


If a company is transparent and reports the materials to the public such as the stakeholders,the stakeholders will have place a great amount of trust in the management. With that,the stakeholders will have more confident to invest in the company, and therefore it helps to minimise the cost of capital.Transparency are believed to play an important role in avoiding the fraud as well as putting the measures back to the right track. This enable the productive capacity of the firm to increase and work efficiently .

According to Soan,there’s a big difference between the transparency and disclosure,.This is well explained of the principles being used in companies that deal with the business on Wall Street which make an endless disclosures but they’re not necessary of using anyone besides the company and people that help to create an opaque documents.

On the other hand,disclosure is as the information being buried in a widely separated places such as a document filled with small types of 400 words. Therefore,transparency is about letting the people know about what they needs in a easy terms in a understandable format followed by the document cover or within the few pages of it.

Its also said that disclosure is a legal obligation where else transparency is an ethical obligation.

Now a days, there is increased importance of disclosure of information to a wide range of stakeholders than in the past. There are two reason behind this. First, in capital market large number of people investing through institutional investors and second is wider use of investment portfolios added many agents in the agency relationship. So, corporate disclosure is essential method of being transparent and communicate with stakeholders. Disclosure refers to any information produced by the companies such as annual reports, it includes directors and financial reports, Voluntary reports, for example, sustainability reports or non-mandated sections in annual reports, Voluntary communications, it includes management forecasts, media releases and last website information that is, any corporate information posted on the website. So, disclosure is a legal obligation (Solomon 2007, pp. 144).

In a cadbury report, increasing corporate transparency is a greater initiative of corporate governance reform in the UK and elsewhere, the report said that,'' The lifeblood of markets is information and barriers to the flow of relevant information represent imperfections in the market, the more the activities of companies are transparent, the more accurately will be their securities be valued''(Cadbury Report, 1992, pp.33). Increased transparency and improved disclosure can be considered through agency theory perspective, stakeholder theory perspective and government reporting. Agency theory refer to relationship between the principal of the company and the agent of the company. Agency costs that outcome from misalignment of objectives and because of separation of management and ownership asymmetry information occurred. From a agency theory perspective disclosure may reduce the problem of asymmetry information that exists between the management and owners of the firms. If good corporate governance in place can help reduce these agency costs. Stakeholders theory require companies to include wider range of stakeholders rather than just the owner of the company. From a stakeholder theory perspective disclosure helps to provide a adequate information to the stakeholders and makes it easier for stakeholders to monitor company management. The company can become true transparent, true efficiency in the market when they disclose information that are honest. In Enron case, management manipulates the financial information in order to show the real image of the company. There are some mandated areas of corporate disclosure for example financial reporting is a legal requirement if someone misrepresented the information then punishments apply not in all disclosure cases.


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The borrowing Policy of the Central Queensland University is under the control of the of the corporate financial needs and objectives. Apparently, the borrowing strategy of the university is to minimize the cost and risk whilst making the optimum use of the external funds.

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Before borrowing books and other things Prior to entering into any borrowing arrangements, the necessary approvals of the Treasurer authorising the University to enter into such negotiations must be obtained. To obtain that sanction the University must submit such information as the Treasurer may require. The borrowing must be in Australian dollars and undertaken in Australia.

No one shall seek to negotiate any borrowing arrangement on behalf of the University without the prior approval of Council. Borrowing arrangements may include and are limited to: Advances by way of loan or overdraft from the Treasurer, State Government or a financial institution (including banks).