Charles Calhoun

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This article by Jeff Lippincott was published in U.S. 1 Newspaper

on October 27, 1999. All rights reserved.

Be Ethical or Pay

If you are an employee, how can you tell if your company

is ethical or a scam? If you are the boss, how can you instill an

ethical sense in your workplace? Find out at an all-day seminar


by the Institute of Management Accountants Thursday, October 28, at

8 a.m. at the Palmer Inn. The morning session will discuss corporate

ethics and the afternoon will be devoted to sentencing guidelines

as set by the federal government. Cost: $275, $160 for half a day.

Call 609-406-5607.

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Charles Calhoun

Charles Calhoun, a CPA who is certified as a fraud examiner by a


association of fraud examiners, will speak at the seminar. He defines

ethics as "a system of principles that leads one to make


and fair decisions" and considers himself a realist so far as

how ethical businesses are these days. Estimates are that corporate

fraud is a $400 billion dollar problem.

Calhoun feels that it is beneficial for companies to address the fraud

issue now. "It used to be the case that individuals and companies

who would tackle ethical issues would be few and far between,"

says Calhoun, "but now the Ethics Officers Association, which

didn’t even exist five years ago, has well over 500 members."

"Red flags" that Calhoun says should alert an employee to

an unethical workplace include a high pressure environment; bounced

company checks; missing records; lack of support for bookkeeping


operations dominated by one individual; and consistently late reports.

"It may take a while to cook those books," says Calhoun.

Attributes that Calhoun feels make for an ethical workplace include:

Tone at the top. "The leader of the company is a model

for the rest of the company."

Framework for ethics. "You have to implement the


for having an ethical organization — a code of ethics. Establish

that a company will strive for honesty."

A code of conduct. "The minimal lines of acceptable

behavior. Establishing the parameters of unacceptable behavior."

An ethics officer to monitor the process and keeps things

on track. "Ethics is an ongoing process," Calhoun says.

A hotline system. Companies should provide an avenue for

"employees to discuss ethical problems or report something that

goes against the code of conduct."

Federal sentencing guidelines are an impetus for having an


program. "If a company were to face a penalty for a violation

for a Federal law, having a compliance program in place will help

lower their fine," says Calhoun.

Calhoun, 45, is based in Westport, Connecticut. Raised in Verona,

New Jersey, he received his undergraduate degree from Principia


in Ellsah, Illinois. After earning his MBA in accounting from Rutgers,

he started his career with the firm of Haskins and Sells and has held

a number of internal auditing positions with such diverse employers

as Colt Industries, Horn & Hardart, and New York Life. He can be


at 203-227-7527 or E-mail:

While federal prosecutors can’t send a corporation to jail, the


typically establishes a financial penalty that can go up or down


on the type of offense. Penalties for ethics violations have gotten

harsher and can go up to $290 million in fines. Restitution is the

first thing that is taken into consideration for the individual or

company that has sustained damages. But what makes the biggest impact

with ethics violators is the specter of public scrutiny. This is the

case when a corporation is put on court-supervised probation.


managers and CEOs don’t like is having to report to the court about

their activities and open their books."

Calhoun wants to dispel the notion that businesses concerned about

ethics will be left in the dust. "Good ethics is good business.

Any ethical organization can be a profitable one," says Calhoun.

"Be ethical because it’s the right thing to do."

— Jeff Lippincott

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