According to the Oxford English Dictionary, ethics is defined as, “The moral principles by which a person is guided.” (Simpson, 1998). This essay is to review an article discussing ethics in accounting and financial decision making. The article to be reviewed is The Company They Kept by Roger Lowenstein.
This article is about John Rigas and how he “built his company, Adelphia Communications, from scratch into a giant corporation.” (Lowenstein, 2008, para. 1). And how that corporation “failed, and Rigas himself, along with two of his sons, is sitting in the dock, accused of the worst case of looting of any C.E.O. of the Enron era.” (Lowenstein, 2008, para. 2). However the article also states that the Rigasas may not all be at fault.
However badly the Rigases behaved, they were helped along the way by lenders and investment bankers, auditors, lawyers, analysts -- just about anyone whose job it should have been to protect the public. And this is what truly distinguishes the latter stages of the last bull market: not that a handful of executives got greedy but that the safeguards supposedly built into our financial culture stopped functioning. (Lowenstein, 2008, para. 4).
In the article it was stated that, “Somehow, the Rigases persuaded a network of commercial banks to lend to them more than $3 billion that not only the family, but also Adelphia, a public company with public shareholders, would be liable for repaying.” (Lowenstein, 2008, para. 4). This relates to reading in our text book where Lenders are described as having only one interest and that is to be repaid with interest. (Albrecht, Stice, & Stice, 2005).
Concepts in this article such as ethics relate to a former organization in that one of the owners was rumored to be embezzling money from the company. Recommendations for this organization would have been to confront the individual accused of embezzling money and take proper actions to ensure that the issue was resolved.
As defined above, ethics...