Responsibilities for Compliance - Free Paper Example

Published: 2023-11-26
Responsibilities for Compliance - Free Paper Example
Type of paper:  Essay
Categories:  Ethics Financial management
Pages: 4
Wordcount: 923 words
8 min read


A financial manager is a person who is in charge of a company’s financial status by ensuring its stability. The main role of a financial manager is to be more equipped with knowledge and skills in financial activities for a quality outcome to maintain the stability of a company (Zietlow et al.,2018). According to the Security Exchange Acts, the financial manager must be conversant with federal and shareholders' necessities to ensure that there are accurate transactions and transparency. The manager plays a vital role in ensuring that all federal and shareholders' policies are strictly adhered to, including the stipulated Acts, which aids in accuracy during transactions (Zietlow et al.,2018). The financial manager's responsibility is to identify a company's qualifications for registration with the federal regulators by providing proper advice for investments.

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Types of Decisions Financial Managers Make

Financial managers are the key decision-makers with the responsibility to maintain the overall cash flow in a company. These decisions are an investment, financing, and dividend decisions. During the decision-making process, the financial manager can choose the most suitable investments, which will bring more profit to the business (Graham et al., 2015). The finance manager makes financing decisions when there is a need to increase loans and shares to balance its equity and debts.

When there is insufficient cash flow within the company to make payments of expenses, it may deteriorate its relationship with possible lenders for future financing deals (Zietlow et al.,2018). Therefore, the finance manager aims to maintain the stability of the company’s funds by comparing the benefits of various sources of income to avoid risks. Besides, dividend decision deals with distributing the company’s profit among employees, shareholders, including creditors. The financial manager can decide what to do with a profit realized and ensure equity of money distribution to the target parties. These decisions relate to financial managers' objectives because they help maintain efficient use of finance, maximize profits, and estimate finance requirements, among other financial goals.

Ethical Issues Financial Managers Face

There are ethical issues facing financing al managers, such as harassments and discrimination, unethical leadership, conflicting results, including an unconducive working environment. Usually, cases of unclear transactions from the finances cause an uproar on the financial status, which may later lead to termination of contracts within the company (Zietlow et al.,2018). Therefore, financial managers are expected to work with the utmost good faith to provide real economic statistics of the whole company’s expenditure at a stipulated time. Transparency at work and a conducive work environment help minimize unethical issues leading to quality work delivery.

Federal Safeguards

Federal Safeguards refers to measures put in place for a financial company to protect the privacy of the customers’ information. The Management Reform Act OF 1994(GMRA) is one of the federal safeguards that help lower reporting abuse and aims to ensure that government agencies provide reliable and accurate information on financial statistics to government managers (Zietlow et al.,2018). Chief Financial Officers Act (CFO) of 1990 reduces reporting abuse by disclosing the management of government financial status and performance standards. Besides, the Accountability of Tax Dollars Act of 2002 (ATDA) deals with submitting audited financial statements from the government agencies.

Investment Options

A private company going public means that a company is ready to avail its investments nationally and externally towards raising funds. A company can go public through a statement registration with the Securities and Exchange Commission as a reporting company (Zietlow et al.,2018). The main advantage of a company going public is that it provides a marketing ground for the company and increases its chances to acquire more funds for more businesses. Going public also helps in getting more funds to settle their debts and purchase of equipment. On the other hand, the Security and Exchange Commission may require vital information about the company to be publicized, which may give negative results (Graham et al., 2015). Negative results stock to the public will lead to a bad reputation for the company.

New York Stock Exchange (NYSE) and the National Association of Security Dealers and Automated Quotations (NASDAQ) are considered the most popular stock markets in U. S. The markets provide different products to their customers (Zietlow et al.,2018). The difference is that the company sells its products orally to customers in NYSE while NASDAQ selling is via social media platforms, and there is no physical contact with their customers. NASDAQ is the Best private investment company because of its merger with the American Stock Exchange (AMEX), which makes it serves as the largest stock exchange market in the U.S.


Some of the investment products available are stocks, bonds, mutual funds, and money markets (Graham et al., 2015). A Stock is an investment held by shareholders of a company. Bonds are written documents that show an agreement on the sum of money issuers intend to pay investors over a specified time. Also, Mutual funds are achieved when a firm source funds from different stockholders to invest in short term debts, stocks, or bonds. Investment banks, brokers, businesses, and stock exchanges are the types of institutions that sell investment products. Stock exchange gives investors chances to buy and sell their products on the markets. Brokers are people employed by other individuals to make sales and earn commission payments.


Graham, J. R., Harvey, C. R., & Puri, M. (2015). Capital allocation and delegation of decision-making authority within firms. Journal of financial economics, 115(3), 449-470.

Zietlow, J., Hankin, J. A., Seidner, A., & O'Brien, T. (2018). Financial management for nonprofit organizations: policies and practices. John Wiley & Sons.

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