Worlds’ economy is increasing, enlarging, and developing at a faster rate nowadays. It put pressures on the businesses to sustain and compete themselves. For this, businesses have to adopt certain principals and should act within the boundaries of set rules and regulations.
these principals, rules and regulations are summarized under a heading called “Business Ethics”. For the sustenance and competence of businesses rely on the implementation and following of business ethics. Success in business can be achieved through the following of ethics.
In today’s world, certain businesses have come across with collapse and shift to liquidation. The main reason behind the collapse of companies is the not following of business ethics. The collapse example of HIH (CE Heath International Holdings) Insurance company proves this fact. In 2001 the company is regarded in full liquidation. The main reason behind the collapse is regarded as the lack of following of business ethics within the organization.
The above-mentioned example highlight that business must peruse business ethics. For this, the APES 110 code of ethics for professional accountants exists which must be followed by all the business. The APES 110 Code of ethics is based on the International Ethics Standards Board for Accountants (IESBA) of the International Federation of Accountants (IFAC)’ Code of Ethics for Professional Accountants.
The problems like financial liabilities and defects in the corporate governance structure of the businesses are mainly arising due to the unethical behaviour within the organization. These problems or issues then led a business organization to full liquidation. In this situation, the activities of the organization get a stop. The organization then sell out its resources or assets to pay off the debts.
Thus, to avoid the above mentioned problems, it is imperative to follow the business ethics within and outside the organization. It will flourish the business activities and will positively contribute towards business success.