accounting ethics

my project "Luckin Coffee, Inc." the conclusion is too short, please add more details in the conclusion

Conclusion must answer the problem statement included in introduction of the report.

Luckin Coffee, Inc. Fraud is one of the most common unethical behaviors in the modern organizations. Organizational fraud encompasses any criminal behavior that employs deception as the main mode of operation. The growth in the volume of business operations has also increased the prevalence of fraudulent behaviors. Organizational frauds are well-documented in both print and electronic media. Although fraud has ethical implications, it also involves significant legal ramifications. More importantly, it can affect the company's brand image and tarnish its reputation. In April 2020, Luckin Coffee Inc. came under scrutiny after one of its top employees had engaged in a fraud. The chief operating officer (COO) was accused of fabricating the organization's 2019 sales by approximately $310 million (Crichton 1). The report was published after the internal probe that analyzed annual company's performance. In reaction, the company's Chief Executive Officer (CEO) and COO were relieved of their duties durin the pending investigation. Luckin Coffee's case depicts how companies employ unethical behaviors such as fraud and conflict of interest to gain market influence. Background Fraud has enormous economic consequences on an organization. As the authors illustrate, "Fraud costs economy, businesses, investors, and society more than $3 trillion every year" (Bekiaris et al. 467). By definition, fraud is an economic crime that involves the abuse of position, prejudicing or false representation for personal gain. The central attribute in any fraudis deception and a nancial or other loss. Fraud is unethical because it involves deception, falsehood, and the suppression of the truth. It is also classied as a white-collar crime because it does not necessarily involve physical violence (Lucas 1). Luckin Coffee is one of the largest coffee companies in China. The coffeehouse was founded in 2017 with the headquarters located in Beijing. With over 4,500 stores across the country, Luckin has established itself as a major player in the Chinese beverage industry. However, the recent fraud involving the top management has tarnished the company's image and reputation. Investigations showed that the C00 was responsible for fabricating 2019 sales, which raises signicant moral and ethical concerns for organizations' top management. (Yang 1). The case study analysis will focus on unethical business practices in organizations and the leaders' role in propagating them. Controversy For the rst time, Luckin Coffee was listed in the United States in 2019. However, in April 2020, the company declared an investigatory report indicating that the C00 had fabricated the sales for the 2019 scal year (Tan 1). The fraudulent operations amounted to about $310 billion. Currently, Luckin is the largest coffee store in China. The scandal came at the backdrop of its recent entry into the US. Delisting of the company from NASDAQ was among the main aftermath of the scandal (Crichton 1). The fraud also happened at a time when anti-China sentiments in America started to intensify. Many believe that this scandal could signal an end many Chinese businesses operating in America. What makes the scandal more serious is that the involved individual occupied the organization's two topmost positions. The first one is the company's CEO, Jenny Zhiya Qian. The company's COO, Jian Liu, was also involved in a fraud to a large extent (Yang 1). The two used proxies and third parties to support the fraud through a host of falsified transactions. Superscript Surname 3 Besides fraud, the company's top officials demonstrated a conflict of interest in their transactions. Most organizations have stringent ethical guidelines preventing conflicting interests in the company. A conflict of interest occurs when the personal and professional interests clash. Individuals accused of conflict of interest tend to pursue their personal interests preferentially to the conflicting professional demands (Dragomir 472). Employees, especially those occupying board positions, have fiduciary obligations to their stakeholders. More importantly, they must remain loyal to the needs of the company. However, this is not always the case, as seen in Luckin Coffee Inc. As Wall Street Journal reports, the CEO and the COO breached thecompany's code of conduct and created a conflict of interests. As Lucas explains, "employees falsified sales by purchasing tens of millions of vouchers that could be exchanged for cups of coffee through fake buyers and obscure companies" (p. 1). The companies the author mentions had business ties with both the COO and the CEO. The two leaders set a bad precedence for Chinese companies hoping to globalize in the US. Revenue inflation demonstrate the company's propensity to fraud. It further illustrates selfishness thanks to the officials' failure to consider the ethical guidelines in relation to the conflict of interest. Outcome The fraudulent controversy surrounding the coffee company led to several negative outcomes. First, the investigations revealed the suspects and masterminds of the financial syndicate. The CEO and the COO, among other employees, received suspension notices and Superscript effectively fvacated their positions during the pending investigation. Luckin Coffee Inc. had recently made its debut in the American market. However, after the scandal, the company has been delisted from operating in the US due to its unethical fabrication of the financial information. NASDAQ has also delisted the company as one of its members. With trade conflictsbetween the US and China, Luckin Coffee Inc. has further strained its relationships with other companies, which will likely create unfavorable working conditions for other legitimate Chinese businesses in America. Recommendations Organization leaders have an important role in creating an ethical culture. According to Graham, leaders have a critical role in enhancing ethical corporate climate (p. 388). They are responsible for leading by the front and acting as the moral compass for the rest of the team members. However, in the case study, the CEO and the C00 acted contrary to these demands. They masterminded and orchestrated an unethical fraud that created a conict of interest. Besides leading by example, leaders can create an ethical environment by promotin a code of conduct and creting whistleblowing units (Butts p. 124). Therefore, the scandal would not have occurred had Luckin Cofrggpiigggtssed an effective whistleblowing department. The company could have evaded the problem by remaining true to its organizational mission, vision, and values. These three fundamental aspects contribute to the strategic direction of any organization. Ethics Resource Center shows that over 50% of US companies engaged in unethical behavior in 2010 (Cady 64). The prevalence of unethical behaviors stems from the differences between the message and actions. Most companies communicate their strategic direction and cultural attributes via the mission and vision statements. The value underscores what the company believes in. Luckin Coffee hopes to be a customer-centric and technology- driven company that meets the needs of the consumers. However, its willingness to fabricate the sales and revenue do not demonstrate its quest to meet its customer needs. Lastly, fair competition among businesses is a signicant aspect of success in the modern world. Corruption is one of the methods Luckin Coffee used to succeed in the market. According _| |_ Surname 5 to Soreide, "Corruption is an illegal tool applied by some players to avoid competition and still obtain market power and contracts " (p. 237). The company's top leadership used fraud and corrupt methods to increase and fabricate sales to succeed in the international markets. Luckin Coffee's leadership wanted to inuence their ranking and performance at the NASDAQ by increasing stock and exchanges. However, this move was unsuccessful since the company was eventually delisted from the American market. Therefore, all companies worldwide should refrain from anti-competitive behaviors that promote fraud and corruption. Conclusion Luckin Coffee's case depicts how companies employ unethical behaviors such as fraud and conict of interest to gain market inuence. The case study analysis has focused on unethical business practices in organizations, showcasing the leaders' role in propagating them. The CEO and COO of the company acted irresponsibly by fabricating the revenue and sales records, which had adverse consequences for the company in the American market. The leadership of an organization has a fundamental role in promoting an ethical culture in an organization. Unethical behavior can tarnish the brand image and negatively affect the competitive advantage of a company. Fraud and conict of interests can be discouraged by establishing an effective code of conduct. Organizations must also adhere to their values and underlying principles. Therefore, the rms wishing to globalize must support the legal tenets guiding business operations both domestically and abroad. Works Cited Bekiaris, Michalis, and Georgios Papachristou. "Corporate Accounting Fraud: Types, Causes, and Fraudster's Business Profile." Corporate Ownership & Control, vol, 15, no. 1, 2017. Butts, Janie B. "Ethics in Organizations and Leadership." Nursing Ethics: Across the Curriculum and into Practice, 3rd Edition, Jones and Bartlett, Boston, vol. 23, no. 4, 2012. Cady, Steven H., et al. "Mission, Vision, and Values: What Do They Say?" Organization Development Journal, vol. 29, no. 1, 2011. Crichton, Danny. "After Grinding Investigation, Luckin Coffee Confirms $300 Million Revenue Fraud" Tech Crunch, https://techcrunch.com/2020/07/01/after-grinding-investigation- luckin-coffee-confirms-300-million-revenue-fraud/. Dragomir, Voicu D. "Conflicts of Interest in a Business: A Review of the Concept." Journal of Accounting and Management Information Systems, vol. 16, no. 4, 2017, pp. 472-489. Graham, John. "The Role of Corporate Culture in Business Ethics." Vysoka Skola Manazmentu, Tren, vol. 2, no. 4, 2014. Lucas, Amelia. "Luckin Coffee Says Independent Probe into Sales Fraud is 'Substantially' Complete." CNBC, https://www.cnbc.com/2020/07/01/luckin-coffee-says-probe-into- sales-fraud-is-substantially-complete.html. Soreide, Tina. "Corruption and Competition: Fair Markets as an Anti-Corruption Device." 2 7 EXAM, vol. 258, 2014, pp. 237-262.Tan, Weizhen. "Fraud at China's Luckin is a 'Great Morality Tale' for Investors, Says Analyst." CNBC, https://www.cnbc.com/2020/07/06/investing-fraud-at-china-luckin-coffee-fraud- case-warning-for-investors. Surname 7 Yang, Jing. "Behind the Fall of China's Luckin Coffee: a Network of Fake Buyers and a Fictitious Employee." The Wall Street Journal, 2020, https://www.wsj.com/articles/behind-the-fall-of-chinas-luckin-coffee-a-network-of-fake- buyers-and-a-fictitious-employee-1 1590682336