Auditing - Research Paper Example

Current of Ethics Currently, Boeing Company has segregated its of ethics into three dispersed areas in order to seek convenience which are;Board, Employees and Finance. The code of ethics provided by the Boeing Company on its website cannot be labeled as comprehensive by any means. The rationale behind this fact is that very specific and short statements which do not cover the whole areas of concerns, are used in the code of ethics. Overall, for a reader, this code of ethics is easy to read and understand but on the other hand, it lacks the well stated policies and procedures regarding ethical issues which Boeing might come across in future.

For those who have to actually act upon this code of ethics, very little guidance has been provided in the draft. This article aims to highlight some of the shortcomings of code of ethics for Boeing Company and accordingly followed by some recommendations which can help Boeing company design a better code of ethics which would be beneficial for the company, its major stakeholders and other readers for variety of purposes. Shortcomings of Code of Ethics The major area of concern for the Audit Committee of the Boeing Company, of which a single hint is not even provided in the code of ethics, is fraud.

Imagine a company of such exposure, having no clue about fraud and fraudulent practices in its code of ethics, making the company more susceptible to fraud. Boeing Company should reassess its code of ethics for the inclusion of various aspects regarding fraud which has its deep roots in different areas of business. It is advised to the Audit Committee of Boeing Company to design such a mechanism which ensures that appropriate course of action can be opted in case when a fraud is highlighted. Efforts should be applied consistently to prevent, detect and deter the possibilities of fraud no matter at which stage it exists.

Recommendations The Audit Committee should establish strategies to confront with fraudulent practices while remaining within its current framework of code of ethics which is divided into three broad areas. The upcoming discussion focuses upon the establishment of strategies to combat with fraudulent practices in each individual area which Boeing Company has classified. Board The Board of Directors of Boeing Company needs to realize the intensity of risks associated with frauds. The Board should take measures to introduce a culture based on honesty, integrity and ethical practices.

The code of ethics should include clauses which signify how Board should respond to reinforce fraud-free culture in the company. Those clauses should highlight management responsibility of dealing with frauds, the oversight of Audit Committee towards fraudulent practices and establishment of such culture which should not give rise to attempt any fraudulent practices. Employees The code of ethics should contain clauses in which the responsibility of employees should be highlighted to confront with fraudulent practices.

Policies should be highlighted in such a way that they should minimize the risks associated with frauds. The consequences of committing fraud and when detected, those who adjudicated to be held responsible for commitment of frauds, should be very well focused in the code of ethics, so that in future, employees should abstain themselves in involving any unethical practice in this regards. Finance The finance department should incorporate those strategies which mitigate the likelihood of fraud in the financial practices.

Those fraudulent practices can take various forms such as fraudulent reporting, misappropriation of assets, embezzlement of receipts etc. Therefore, the Audit Committee should encompass relevant strategies in the code of ethics to confront with such fraudulent practices in relation to financial frameworks of Boeing Company. References Arens, Alvin A., Elder, Randal J. and Beasley, Mark. (2011). Auditing and Assurance Services (14th ed.). United States: Prentice Hall.