The Institute of Management Accountant (IMA) issued the IMA’s standards of ethics, which includes competence, confidentiality, integrity and credibility, serving as guidelines that govern the actions and decisions of business enterprises. To obtain larger market share and greater profit, apart from providing better quality of goods and services, companies should also show their attention to the welfare of the planet and the whole human beings.As the biggest clothing company in Asia, Esprit has contributed to the community though donation, volunteer and funding. According to the Esprit Official website, in fiscal year 2011, Esprit has donated more than 1million to the charity. Apart from the monetary support, Esprit encourages labors to participate in activities raised by charities such as the Charity Walk of The Community Chest of Hong Kong and ribbon selling held by Hong Kong Breast Cancer Foundation.However, Espirt has been reported by Next Magazine that out of 37 directly operated outlets and 35 department-store counters listed by the company on its website in the Chinese cities of Shanghai and Shenzhen, seven do not exist and 13 could not be reached.
In Shenzhen, where the company listed a total of 37 outlets, seven don’t exist and three couldn’t be contacted, Next said. After the report, four calls made to Patrick Lau, Esprit’s investor relations vice president, on his mobile phone went unanswered.An e-mail sent to him this morning also wasn’t answered. Chew Fook Aun, Esprit’s chief financial officer, didn’t answer a call to his mobile phone. As Van der Vis said, Esprit is hiring a manager for China as it plans to more than double sales in the world’s most-populous nation in four years.
There is a real probability that Esprit overstated the operating stores in China and their solid asset base in China in order to attest investors.No matter what the reasons behind are, Esprit has violated competence and credibility aspects of IMA’s code of ethics that are “Provide accurate, clear, concise, and timely decision support information” and “Disclose all relevant information that could influence a user’s understanding of reports and recommendations. ” Mislead information about the operating stores cause confuses in financial report. Trust will be the problem after this overstatement and the retailer has lost more than 40 percent of its market value.
