Accounting and Business Ethics

Accounting and Business Ethics

Accounting and Business EthicsAlmost every day, the business sections of our newspapers and television news broadcasts carry some kind of story dealing with ethical issues in accounting. Yet these sensational news stories may be only the tip of the iceberg. The larger mass of ethical problems in accounting consists of the many incidents that are never reported.

It is particularly important to understand that unethical behavior is usually determined using hindsight. “Why did you do that ” is a very common question after an action has been deemed unethical or wrong. Most decision makers never consider beforehand the ethical ramifications of their decisions. Often, they simply select the action that is indicated by an analysis based on a conventional business decision-making model.

One of the major benefits of studying ethics within this course and as a discussion is to benefit from the great diversity of our students. Individuals of differing backgrounds will bring different approaches and different values to our discussions. Differing approaches are good and combining the best aspects of several approaches can often produce a superior solution. Please be sure to read the comments carefully so that you understand the positions of other students in order to support them or argue against them.

Included here is a brief list of some of the more popular ethical theories. It is presented here to assist you in framing your responses and comments:

The Golden Rule: “Do unto others as you would have them do unto you.” Although, not really a theory, it is almost a universal basis for interpersonal behavior.
Utilitarianism: Individuals select actions that result in the greatest good or the least harm to society. This is sometimes broken down into act utilitarianism and rule utilitarianism.
Theory of Rights: The basic premise is that all people have certain fundamental rights that should never be violated. Theoretically, making decisions based upon the theory or rights is simple: you select the alternative that does not interfere with the rights of others. In practice, it is more difficult because the alternatives may infringe on the rights of different people. A classic example of this is the argument offer the issue of smoking in public places.
Theory of Justice: The operative words in this approach are: fair, equitable and impartial. This theory does not require that all people be treated the same unless all the facts are the same.

In the subsequent chapters, we will be reviewing different issues in the business community and analyzing them. The following model can be used as a framework for your own postings and responses to others’ postings.

Identify the ethical dilemma
Identify alternative actions
Identify the affected parties
Identify the effects of the alternatives on the parties
Select the best alternative.

As a beginning to this series of discussions, please review the following and respond: As we are aware, ethical standards are not always followed in business. Describe the ethical climate in the organization where you work. Does the organization have a code of ethics and are employees aware of its existence Do managers set a good example If the ethical climate in your organization is poor, what problems, if any, did it create