In well-governed companies, a sense of accountability and ethical leadership create a culture that places organizational ethics above all else. What role does organizational culture play in preventing financial shenanigans from being used to manage earnings?
Ethics– Are the values and principles that a business should follow.
Ethical leadership– It is the leadership with moral values, an ethical leader adopts and demonstrate character, moral and virtues in his work, keeping in mind the rights and benefits of his employees/subordinates.
Organizational culture- It is the civilization and moral values in the workplace that contribute to the unique social and psychological environment of the organization.
Organizational culture play in preventing financial shenanigans- Organizational culture plays a great role in preventing the company from financial fraud and material misstatement. It motivates employees in doing right. Organizational culture plays an importance role in managing the risk of fraudulent practices within the organization. When ethics are solid, a company is more likely to minimize the internal scams.
Ethical culture creates an ethical workplace. An ethical leadership can make an organization free from financial and other frauds. Organizational culture and ethical leadership make the internal control strong and people in organization follow the ethical practices and work together in an ethical environment that is free from fraud.