In addition, the market conditions and its capitalistic nature is more to blame here, because if a downward fall of a corporation is not succeeded by pessimistic analysis and negative reports along with a major impact on stock markets, the corporations would also tend to take some periodic decline easier and acceptable. The market reacts proactively and without reason, almost ill-reasoning its justification almost at the cost of an immediate decline in the retailer’s profit outlook and market valuation. The separation of owners and management in running a large retail organisation sometimes creates misalignment of priorities and even though the management is rewarded as per the corporate norms, they do not hesitate in acting for self-interest.
Drastic efforts are needed to eliminate this seed of accounting miscreants. Retail industry is a gigantic industry, always under pressure to perform better than the others or rivals. This makes it more competitive than any other sectors. The industry is indulged in irregular and unethical practices. These are non-assessment of manufacturer working conditions, underreporting costs and over-reporting profits, indulging in unfair trade practices with its weaker associates, such as suppliers and consumers. The industry is mired with numerous cases of financial irregularities and its impact being detrimental for the company and for the sector as a whole. Accounting practices are much under scrutiny and are to be replaced by a new set of rules that defy the urge to indulge into unethical practices. When fairness and ethical standards are highlighted and precedes the cheap indulgence of easy profits and fictitious growth, accountants shall embrace ethical practices and implement them a daily basis.
The government is less serious about fixing the gaps which allow corporations to indulge in such practices, because it remains ignorant of the size of such scandals and the ultimate damage it does to society. There is a need to bring in new reforms which distribute equitable resources and justice to the stakeholders. Profit seeking as a sole motive must be shunned by educating accountants and corporations about the perils of polarisation of wealth. Stringent actions are required on part of the government, and from the retailers themselves to revisit their foundational values of ethics and morality and encouraging them to practice them on a daily basis, so as to achieve some level of social inequality reduction.