Essays on Ethical Issues in the Financial Industry Coursework

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The paper 'Ethical Issues in the Financial Industry" is a good example of finance and accounting coursework.   In one way or another, we are all consumers of the different products and services that are provided in the financial industry. As such, the financial industry is made broad by the fact that we all are consumers of the products and services from the industry. With such a broad industry, it is likely that there would be ethical issues that will arise that need to be considered during the different interactions between the producers and consumers in the same industry.

Today, the financial industry is considered to be among the top industries with the highest unethical issues. Although finance raises many unethical issues, few studies have been conducted to provide insights on how the issues in the industry could be managed. Finance could be easily defined as the generation, allocation, management and exchange of monetary resources in an economy. As such, finance could be divided into three main parts among them being public finance, corporate finance and personal finance. There are four main divisions of finance in any given economy.

These are the financial markets, the finance theory, financial management and financial services. The financial framework comprises of the four divisions and each of the division provides for principles that need to be followed to guide the easy management of each of the division. Financial ethics have therefore become an important part of the finance and they are used in each of the four divisions to guide the people on how to act and work with others in the same industry. With the changes in the market structures over time, the financial institutions have grown in size and their activities have continued to be diversified with the changing needs and preferences of the different customers in the industry.

Although the ethical concerns in the finance industry are a new undertaking, the main concerns that have been considered ethics issues from the past are the legal and regulatory concerns in finance. To best understand the ethical issues in the finance industry, the main focus will be each of the four divisions. By understanding the ethical considerations in each of the divisions, then it will be easy for the players of the industry to understand the legal, regulatory and ethical concerns that should guide them. Ethical issues in the financial industry The first division of finance is the financial theory that is concerned with the functioning of the credit markets and the pricing of assets and liabilities in the market.

The direct relationship between the organization and the customers usually raises less ethical issues. However, there is some distress that may occur when the individual players choose to put self-interest ahead of the interest of the clients that they choose to serve.

This is an unethical activity that is common in the financial markets and it may occur either at the organizational level or a personal level. At the organizational level, the directors and other shareholders may choose to overcharge the customers and make supernormal profits. This is common in the pricing of assets and liabilities in the market by the directors of the organization. High pricing of assets and low pricing of liabilities will allow the organization to report profits that do not reflect a true and fair view of the current situation in the organization.

Reporting such profits for the organization will allow the managers to easy award themselves with bonuses at the expense of the performance and the profitability of the organization. At the personal level, the main concern usually happens when the individuals choose to provide themselves with bonuses or they overcharge the clients or at the time directly or indirectly steal from the organization to compensate themselves.

REFERENCES

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Boatright , J. (2010). Finance Ethics: Critical Issues in Theory and Practice. New Jersey: John Wiley and Sons IncBoatright.

Brealey, R., Myers, S., & Allen, F. (2010). PRINCIPLES OF CORPORATE FINANCE. New Jersey: John Wiley and Sons Inc.

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Dobson, J. (1997). Ethics in Finance II. financial analysts Journal, 15-25.

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Tirole, J. (2006). The Theory of Corporate Finance. Princeton: Princeton University Press.

Watson, D., & Head, A. (2004). Corporate finance: principles and practice. London: Pearsons publications limited.

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