National Australia Bank is public bank got established in 1984 having headquarters in Melbourne, Australia providing services in Australia, New Zealand, and Asia. The international company provides the services of banking operations, credit facility, leasing, housing, general financing, investment on national and international grounds, fund management, wealth management. Life insurance services and also provide other agency services as custodian, trustee and nominee services. The bank has an AA rating from Standards and Poors. the company is focusing on market share by providing quality services and a great experience to the customer at low prices or fees.
The company is very dynamic as it operates in the international market. The management of the company focus on diversity planning and build reliable and sustainable relations with all related parties. But the actual practices of the company are not up to the mark. In practical working, the company has been suspected of various unethical activities performed in operations of the company.
Findings of royal commission: Royal commission has found the unethical operations undertaken by the company to avail unfair advantages are as follows:
• The bank has tied up with three other companies to show high retained earnings of the company, that will protect the tax of the company by showing less profitability and distributed funds.
• Though a royal commission has found that a company is very greedy for high profits and overall culture is affected by this greed.
• After, analyzing the malpractices undertaken by the company, it was rewarded to pay compensation to customers worth $374 plus legal cost $55.
• The lower profitability has also declined the share price of the company, though shareholders have to bear the loss.
• The auditing procedure of the company is not appropriate. The advisory services provided by the company to their customers was not in the interest of the customer and not benefitted at all.
• The practice of the company’s unethical behavior has affected this much to the company, that its advisors are declining, a company had 71 advisors, but half of them has left within 12 months.
• Companies are so connected to their unethical practices that the management of the company stated that all the inquiry has been conducted because of strict environmental control, though they are not guilty of any criminal activity.
• All the financial planning failure has put the company at loss and public image of the company has been deteriorated.
Ethical principle breach by professional accountants: professional accountants has to face ethical choice and dilemma every day in the working. The management has to identify the issues faced by accountants a provide training to them to get desirable behavior of accountants in the delivery of their professional activities. The major dilemmas faced by professional accountants are:
• The major dilemma is to perform all the operations in an ethical manner or not.
• If there are any ethical issues, how a company or professional accountant should respond over it.
• How could they improve their capability and accept ethical issues and improve that?
• What additional resources or efforts they required to improve capability and adaptability of changes.
• The major issues faced by the company to deliver its operations in an ethical manner are:
• Misleading reporting of facts and information
• Tax evasion or fraud.
• Lack of transparency in business operations and accounting.
• Lack of or breach of confidentiality
• Misrepresentation of data or information
• Bribery or corruption
• Misuse of funds collected from shareholders or investors.
• Insider trading practices are done by the management of the company.
These issues are mainly created due to the following causes:
• When management feels pressure from clients.
• When management and employees have conflict in delivering the services.
• When employees feel pressure from management.