- Write a 3- to 5-page essay about the ethical and financial implications of insider trading.
Note: Some of the assessments in this course build upon each other, so you are strongly encouraged to complete them in the order in which they are presented.
Investors depend on the information from financial statements in making investment decisions. However, if a company’s financial information is used or shared before it is released to the public, this could cause substantial movement in the price of a company’s stock. Some individuals do not see anything unethical about insider trading, yet it is a criminal offense, one for which even well-known and respected individuals have served, and are serving, time in prison. CPAs agree to a professional code of conduct upon licensure, but it is important to develop your own conclusions regarding the ethical implications of financial reporting, planning, and decision making within an organization.
By successfully completing this assessment, you will demonstrate your proficiency in the following course competencies and assessment criteria:
- Competency 2: Examine regulatory, ethical, and credibility issues in accounting
- Analyze how insider trading may affect general business management planning and decision making.
- Analyze the ethical implications related to financial decisions concerning inside information.
- Competency 5: Communicate in a manner that is professional and consistent with expectations for members of the business professions.
- Communicate in a manner that is professional and consistent with expectations for members of the business professions.
Check Your Progress Use this online tool to track your performance and progress through your course.
The following optional resources are provided to support you in completing the assessment or to provide a helpful context. For additional resources, refer to the Research Resources and Supplemental Resources in the left navigation menu of your courseroom.
The following e-books or articles from the Capella University Library are linked directly in this course:
- Murthy, G. (2009). Financial accounting. Mumbai, India: Himalaya Publishing House.
- Vataliya, K. S. (2009). Practical financial accounting: Advance methods, techniques and practices. Jaipur, India: Paradise Publishers.
- Doran, D. T. (2012). Financial reporting standards: A decision-making perspective for non-accountants. New York, NY: Business Experts Press.
Course Library Guide
A Capella University library guide has been created specifically for your use in this course. You are encouraged to refer to the resources in the MBA-FP6014 – Financial Accounting Library Guide to help direct your research.
The resources listed below are relevant to the topics and assessments in this course. These resources are available from the Capella University Bookstore. When searching the bookstore, be sure to look for the Course ID with the specific –FP (FlexPath) course designation.
- Libby, R., Libby, P., & Hodge, F. (2017). Financial accounting (9th ed.). New York, NY: Irwin.
- Assessment Instructions
Based on your own experience and knowledge with financial reporting, planning, and decision making, develop conclusions and explain the ethical implications of financial decisions within an organization. You may need to do additional research on the implications of using insider information (for example, the case of Martha Stewart) to help you complete this assessment.
Write an essay in which you respond to the following:
- Why is insider trading considered unethical? Keep in mind that some individuals do not see anything unethical about it, even though it is a criminal offense.
- Would allowing insider trading, even if it were ethical, hinder the operation of the stock market in raising capital for new and existing companies? Explain.
You must use two or more scholarly sources in your essay to support your responses.
- Length: Your essay should be 3–5 typed, double-spaced pages, including a title page and references.
- Written communication: Written communication should be free of errors that detract from the overall message.
- Style and formatting: Use current APA style to format your essay and cite your references. You must use at least two references in your essay.
- Font and font size: Times New Roman, 12 point.
Ethical Issues: Ethics and Insider Trading Scoring Guide
Write a 3- to 5-page essay about the ethical and financial implications of insider trading.
- Assessment Submit
This button will take you to the next available assessment attempt tab, where you will be able to submit your assessment.
- u10a1 Ethical Issues
- u10a1 Ethical Issues: Revision 1
- u10a1 Ethical Issues: Revision 2