Accounting Mistakes at Work
Perhaps it is imperative to underscore the fact that indeed everyone is usually faced with mistakes in one way or another. On the other hand, different persons have unique ways of responding to mistakes upon discovery. Some would react by seeking to correct the mistake in question as soon as possible. Others on the other hand would opt to ignore and continue focusing on their pending issues. However, at the work place, making mistakes may result to far reaching repercussions; in terms of its effects to the employer and eventually the company in question.
Hence, attempts to simply rectify the mistake and move may not be feasible due to the collateral damage. Against this backdrop, this assignment shall seek to provide a discourse on the causes of work related mistakes as well as the most feasible approach that would be taken upon occurring. In this regard, the research question for this work would be: What are the effects of mistakes at work? This research question shall be based on the standpoint that mistakes at work are mostly caused by professional negligence.
Thus, this paper shall be divided into the context of this issue while at the same time recommending strategies that would
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At this point, it would be prudent to ask; what are the root causes of work related mistakes amongst organizations? Ironically, it should be noted that persons who are qualified in their respective area of expertise usually commit these mistakes. This issue is further complicated when the employee in question has a depth of professional experience in addition to his academic qualifications. To the managers or supervisors, matters are not made any easier in the event that such mistakes had been occurring for a considerable length of time only to be discovered when it is somewhat late according to Webster, (2003).
Faced with such dilemma, the immediate supervisors are normally thrown into a state of panic and desperation owing to the fact that the mistake in question had been going for some time under their nose. To some, this may be construed to mean that they too had failed and are thus part of the mistake by virtue of being ignorant of such mistakes. At this point, any attempts to correct the mistake are usually neither practical nor preventive in the long run. According to Paget, and Joan, (2004), mistakes at work have been noted to put everyone’s career on the line irrespective of whether one was involved or not.
However, the biggest casualty of work related mistakes by employees is normally the company. Mistakes at work result to unprecedented losses to the company. In a much competitive business environment, losses from work related mistakes are simply not an option. The magnitude of these mistakes is in most cases too much to bear since professionals normally commit them. Supervisors of such employees are in this regard faced with the challenge of establishing whether such mistakes were intentional or not; especially if they have been occurring for a considerable length of time.
In the field of accounting, professional work mistakes have the potential of paralyzing every other operation of the company due their monetary implications. Of importance to note is the fact that some professionals, having found a loophole within the organization, may commit accounting mistakes intentionally to gain all together. It is for this reason that these accounting mistakes as captured in the example normally culminate into scandals. Theoretical Framework From the question assignment example, it is evident that this accounting mistake was professional in nature with respect to time.
The fact that the company’s accountant had indeed formed the habit of presenting wrong monthly financial reports to the management bring doubt as to whether this was a genuine mistake. Failure to establish the main motive behind this mistake may not yield much success as far as the resolution of the mistake is concerned. There is the open probability that the accounting officer had been using this as an avenue to siphon under the disguise of making professional mistake.
On the other hand, there is the greatest possibility that the accounting officer in question made a genuine mistake during earlier months, which was then carried forward throughout the three-year period. According to Duska and Brenda, (2003), there are two main types of mistakes, which an accounting employee might have been committing during the three-year period irrespective of the motive. One of the said types of accounting mistakes is captured in terms of misrepresentation of the company’s financial state of affairs.
Indeed this was evidenced by the fact that the employee had been presenting wrong financial reports to the organization as it was found out. Misrepresentations of financial status of an organization refer to the skillful process of re-categorizing a range of business transactions. In particular, this entails the employee carefully reviewing all the business transactions with the overall objective of presenting a realistic looking financial outlook of the company. From the standpoint of the employee, this has the merit of being able to be concealed for a considerable length of time as evidenced in this example.
From a business perspective, this type of mistake has increased in usage as directors of companies use it as a means of securing loans. Such is usually handy when the organization is faced with unexplained financial hardships or during a recession. In the short term, this might provide a means of securing cash to finance other expenditures. Nonetheless this is considered to be unethical means of acquiring funds for a company. When employees use this, the risk is that it is rather to detect the financial anomaly during the time of financial hardships by the company.
The other type of accounting related mistake at the work place is brought to the fore through the act of borrowing from other expenses in order to finance immediate expenses within the company. Duska and Brenda, (2003), hold the view that this type of mistake is usually preceded by the former mistake. More often than not, it is used as contingency measure of justifying any misrepresentations of expenditure within the company. This type of ‘internal’ borrowing has the effect of presenting a realistic looking financial position of the company since it covers immediate expenses within the organization.
However, the most obvious demerit of this type of accounting strategy is that it leads to a build up of the financial problems within an organization. The most common effect is that money, which is borrowed from other areas, is never returned in the event that things go wrong within the company. Yet still, having committed the first type of mistake it is usually very difficult to avail such money even if the company is doing well because of misrepresentations. From a legal perspective, these mistakes can lead to culpability and would occasion imprisonment of the employee in question.
However, their effects on the company are normally far reaching owing to their financial implications to the company. In the wake of increasing competition by the other market players, this is usually cost too much to bear since it may lead to bankruptcy of the company. According to Paget and Joan, (2004), bankruptcy refers to the legal state of being unable to pay of a company or a person to pay creditors. Simply put, it is a state of complete insolvency to by an organization or individual. Diagnosis and analysis
From the outset, it is worth noting that though mistakes are common to every person at the work place, some are more detrimental to both the organization and employees. In general, mistakes have a direct impact on the career of the employees irrespective of whether one is involved or not. The affected employee, certain mistakes would culminate to one being imprisoned, bearing the full financial cost of the mistake or both in some instances. At the same time, these mistakes normally carry with them ethical implications to the affected employee.
In a nutshell, the person committing mistakes in fields such as accounting is faced with the risk of eroding his/her professional credibility or integrity as is put forward by DeCenzo and Stephen, (2006). The supervisor of such an employee might be thrown into an ethical dilemma in the event that the mistake is yet to be discovered by the senior management. As it was discussed above, the fact that such accounting mistake had been happening for a given period without being noticed might also amount to the supervisor being culpable of the mistake.
One of the most probable organization decisions would be the dismissal of the supervisor on grounds of having failed to prevent a crime in the making. Such decision would be informed from the standpoint that it was indeed the responsibility of the supervisor to detect the mistake the very time it occurred with respect to time. This move would be justified from the managerial position since the supervisor is assumed to take charge of the junior officers. In most cases, the supervisor is an individual with a considerable depth of experience as well as ample technical knowledge subject to his/her training level.
From this discussion, it is clear that the supervisor shall be faced with a potential conflict situation; which is rather two way. The employee in question on the other hand is faced with the obvious responsibility of explaining the motive of such mistake upon which a decision would be based according to Konrad, Pushkala and Judith, (2006). Mistakes at work in their own merit are conflict situations. Thus, the management discovers one of the possible conflict resolution mechanisms available to the supervisor would be to seek for a detailed explanation from the employee before the mistake.
This would give the employee ample time to correct the mistake in the event that it was indeed genuine and thus help in the recovery of lost resources if any. It would be prudent for the recovery of these resources by the employee to be accompanied by a detailed report showing the extent of the mistake as well as the actual recovered company resources. In this way, the employee and supervisor would be vindicated and perhaps avoid punitive measures from the management.
The other conflict resolution option available in the event of work related mistake would be for the employee to own up to the mistake while at the same initiate corrective measures. However, such measures should bear no cost to the company as well as the other employee. The employee in question should seek to make right the mistake at his/her own time irrespective of whether he/she is on vacation or not as put forward by Guerin, (2010). In such situations, the supervisor ought to provide close supervision to prevent or unearth other related mistakes.
It should be pointed out that depending on the magnitude of the mistake, both the employee and supervisor shall be liable to dismal as a punitive measure to deter other employees from being professionally negligent. Recommendations Despite the fact that mistakes at the work are common occurrence, various measures can be put in place to reduce them to their bare minimum. One of such measures would be by close supervision of the employees irrespective of their skills or experience. A balance should be struck however between such monitoring and giving employees free space to come up with their initiatives.
Secondly is by regular training in relation to the changes in the market. This would not only give employees the requisite skills but also enable them to respond to any emerging challenges. The issue of consumerate remunerations cannot also be ignored since it is a major motivating factor better performance by employees. Apart from ensuring for high quality delivery of services or goods, it has the impact deterring employees from harboring ulterior motives or attitudes towards the company as argued by Konrad, Pushkala and Judith, (2006).
Conclusion From the above discussion, it is clear to me that mistakes at work carry with them far reaching consequences to both the company and employees. However, in most cases, some mistakes might be brought about due to laxity from the part of the supervisor. Employees on the other hand might be negligent and thus resulting to mistakes at work irrespective of their skills or experience. It is imperative to note that irrespective of the type of mistake, it can be due to utter negligence or malice from employees with the hope of gaining.
Nonetheless, it is extremely difficult to establish the true motive of employee in the event of a mistake at work, though majority of them are actually genuine. As a manager, I have an important lesson of recognizing the fact that mistakes can occur at work even for a considerable length of time. However, much emphasis should be placed on putting in place proactive preventive measures anchored on sound conflict resolution strategies. Reference List DeCenzo, D. A. & Stephen, P. R. (2006). Fundamentals of Human Resource Management. New York.
Wiley. Duska, R. F. & Brenda, S. D. (2003). Accounting ethics. New York. Wiley-Blackwell. Guerin, L. (2010). The Essential Guide to Workplace Investigations: How to Handle Employee Complaints & Problems. Washington, D. C. Nolo. Konrad, A. M, Pushkala, P. & Judith, K. P. (2006). Handbook of workplace diversity. New York. SAGE. Paget, M. A & Joan, C. (2004). The unity of mistakes: a phenomenological interpretation of medical work. New York. Temple University Press. Webster, W. H. (2003). Accounting for managers. London. McGraw-Hill.