Tasks in Finance
This task involves analyzing the profitability of a new product line.
What is determining whether a new product line will be profitable?
Ethics are crucial in finance because unethical behavior leads to these disastrous outcomes.
What are catastrophic results?
When someone starts with small unethical acts and escalates over time, they are demonstrating this phenomenon.
What is incrementalism?
A tendency to stick with a failing investment because of prior costs is known as this.
What are sunk costs?
The ethical principle that ensures finance professionals avoid favoritism.
What is fairness?
This task requires keeping accurate records of transactions.
What is bookkeeping or record-keeping?
People in finance might act unethically due to this overwhelming factor.
What are temptations and pressures in the finance field?
The tendency to follow others’ actions instead of thinking independently.
What is conformity?
This bias occurs when people frame situations based on how they are presented.
What is framing?
The principle that involves keeping financial information private.
What is confidentiality?
A finance professional might communicate with these two key groups.
Who are customers and suppliers?
Unethical decisions from leaders exemplify this cognitive bias.
What is obedience to authority?
Arguing against a position to ensure its validity is called this.
What is playing the devil’s advocate?
Nico believes he is immune to unethical behavior but thinks his coworkers are not. He demonstrates this bias.
What is overoptimism and overconfidence?
This principle requires finance professionals to act with diligence and ensure their actions comply with legal and ethical standards.
What is due care?
Hiring and training new employees typically falls under this department, not finance.
What is Human Resources (HR)?
This concept explains why unethical decisions are hard to resist in finance.
What is self-interest or short-term gratification?
If coworkers act unethically, this is the first person you should report to.
Who is your supervisor or manager?
This bias discourages individual responsibility during group decisions.
What is groupthink?
This principle ensures finance professionals have the skills and knowledge necessary to make sound decisions.
What is competence?
A finance professional evaluating whether to merge two companies is performing this kind of analysis.
What is merger analysis or due diligence?
This ethical principle encourages transparency in financial reporting and decision-making.
What is transparency?
If a finance professional discovers unethical practices and their supervisor does not act, this is the next group they should inform.
Who are higher-level executives or relevant authorities?
This bias explains why individuals justify past unethical actions to maintain their self-image.
What is rationalization?
The ethical principle that obligates finance professionals to disclose all relevant information accurately and timely.
What is transparency?