Business and Ethics Terms

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auditor

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An accountant, ideally from an outside source or firm, who reviews the financial books and determines they are accurate.

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corporate social responsibility

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Programs a corporation puts in place to make a positive contribution to a community or society.

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fair trade

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A trade movement that calls for people to receive a fair price for their goods and services; the movement also encourages more social and environmental sustainability.

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Federal Sentencing Guidelines

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Created by the US Sentencing Commission, these guiding principles assign specific fines and prison terms for different crimes like fraud, tax offenses, antitrust violations, bribery, and money laundering.

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globalization

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Increasing economic and business interdependence around the world.

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outsourcing

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The shifting of a company’s business processes, such as production or manufacturing, to an outside contractor, sometimes in another country (though the official term for relocating a business process to another country is offshoring).

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Sarbanes-Oxley Act (SOX)

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Passed in 2002, the most important regulatory act businesses must follow; it mandates standards for accurate financial reporting.

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social responsibility

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An individual’s obligation to help make society better.

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sweatshops

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Factories (often clothing factories) with poor or even dangerous working conditions.

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US Sentencing Commission

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A government agency created in 1984 to ensure that corporate crimes receive hefty enough punishments to be effective deterrents.