Ethics (ch16/1)

  1. What constitutes professionalism? (7)
    A professional:

    *Communicates Freely

    *Thinks rationally, logically, & coherently

    *Appropriately uses technical knowledge

    *Integrates knowledge from many disciplines

    * Exhibits ethical professional behavior

    Recognizes the influence of political, social, economic, legal, and regulatory forces

    *Actively seeks additional knowledge
  2. McDonald's FOUR criteria to be considered a professional:

    (Different from professionalism answer)
    1.  Specialized knowledge base (fin reporting rules, audit standards, etc --not part of society's general knowledge.

    2. Complex Skills - (also requires use of judgement if acctg related)

    3. Autonomy of Practice - independence or self sufficiency. "Independence of mind" SOX; PCAOB

    4. Adherence to a code of ethical behavior AICPA, Association of Certified Fraud Examiners


    Notice nearly all of his definitions emphasize ethics
  3. In accounting we are most concerned with what type of ethics?
    Normative Ethics
  4. Normative Ethics
    • Normative ethics=
    • What are the rules and standards, whether professional, that guide our decision making?

    (Normative Ethics is the study of ethical action. Distinct from meta-ethics)
  5. Merchant and Van der Stede articulated 4 basic paradigms for ethical decision making. What are they?
    1.Utilitarian

    2. Rights and Duties

    3. Justice model

    4. Virtues model
  6. Utilitarian Model of ethics
    • The end justifies the means.
    • As long as you have a successful or favorable outcome, any method of achieving it is justified.
    • It would be ok to increase a company's stock price even if you engages in profit manipulation, as long as the end result was worth it.
  7. Rights and Duties school of ethics
    • Rights and Duties-
    • **Every person for himself.

    **-all individuals have rights. Others have the duty not to interfere with these rights. 

    **If a manager has a right to earn a bonus every year, others have a duty not to interfere with this,even if manager acts in unethical ways to obtain the bonus and vice versa- mgr  shouldn't interfere w/employees right to bonus.
  8. Justice model of ethics
    • All people should be given what they deserve
    • Weighs a person's actions against the results of those actions.
    • "What do people deserve?" is key
  9. Virtues Model of Ethics
    • People should do what is right, moral, and virtuous.
    • Managers should look inward to determine what is right and moral and to determine the rightness of their actions.
  10. Langenderfer and Rockness 8 steps for dealing with an ethical dilema
    • 1. Identify the facts
    • 2. ID the ethics issue and the stakeholders
    • 3. Define the norms, principles, and values related to the situation
    • 4. ID the alternative courses of action
    • 5. Evaluate the consequences of each possible course of action
    • 6. Decide on the best course of action consistent w/norms, principles, and values.
    • 7. If appropriate, discuss the alternative w/a trusted person
    • 8. Reach a decision as to the appropriate course of action.
  11. If your company has an ethics policy:
    Generally follow the policy first. Sometimes some issues have no one right answer.
  12. Mintz and Morris's 10 step process (p9) for making ethical decisions
    • 1. Frame the ethical issue
    • 2. Gather all the facts
    • 3. ID the stakeholders and obligations
    • 4. ID the relevant accounting ethics standards involved
    • 5. ID the operational issues
    • 6. ID the accounting and auditing issues
    • 7. List all the possible alternatives you can or cannot do
    • 8. Compare/weigh alternatives
    • 9. Decide on a course of action
    • 10. Reflect on your decision
Author
analog22
ID
235265
Card Set
Ethics (ch16/1)
Description
Ethics Ch 16/1 test 1
Updated