Unethical Behavior at Ebenezer Manufacturing Company
The Importance of Ethical Behavior in the Workplace
Internal controls are checks instituted by management to ensure that the assets of the entity are safeguarded, that financial reports are timely and accurately done, and that the goals of the business are achieved. When employees act unethically, it can lead to negative consequences not only for the individual but also for the company as a whole.
By behaving unethically, Beth not only compromised her own integrity but also violated the trust that the company placed in her. Ethical behavior in the workplace is essential for maintaining a positive work environment, building trust with colleagues, and upholding the reputation of the company.
Impact of Breaching Internal Controls
Some of the key internal control issues being breached in this situation include:
- Oversight and self-review: Beth failed to follow proper procedures and review her own actions objectively. This lack of oversight can lead to errors, fraud, and mismanagement of resources.
- Control with authorization of transactions: Beth should not have been able to approve her own requisition for lumber. This lack of control opens the door to potential abuse of company resources.
- Separation of functions: By initiating the transaction, approving it, and charging the rate in the accounting system herself, Beth violated the principle of separation of duties. This separation is crucial for preventing fraud and ensuring accountability.
Overall, Beth's actions not only raise ethical concerns but also highlight the importance of following internal control procedures to safeguard company assets and promote transparency in business operations.