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The ethical effects of this misstatement and what procedures would have prevented
the misstatement

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Introduction
In December 2016, the Securities and Exchange Commission (SEC) brought accounting
fraud charges against Osiris Therapeutics, Inc. and four of its former top executives. The SEC says
that from 2012 to 2014, the company inflated its revenue by recognizing revenue from product
shipments that did not meet the criteria for revenue recognition under Generally Accepted
Accounting Principles (GAAP). The SEC also says that the company did not tell its auditors
important details about its business relationship with a major customer. This caused the company's
revenue to be overstated by about $24 million (Dinsmore et al., 2017). In this essay, I will talk
about how this false statement affects ethics and what steps could have been taken to prevent it,
based on the article "SEC Charges Osiris Therapeutics and Four Former Executives with
Accounting Fraud."
The SEC's accusations raise important ethical questions about the role of corporate
executives in financial reporting. In particular, the SEC's claims suggest that the CEO, CFO, and
VP of finance of the company knew about the accounting fraud and did nothing to stop it. This
makes me wonder what their ethical duties are as business leaders.
The charges that the SEC is making against Osiris Therapeutics are related to a number of
moral rules. First, there is the idea that financial reporting should be correct. This principle says
that companies must report their financial results in a way that is consistent with GAAP and is
correct. The second principle is the one about...