1. Ethics in Accounting Dr. Bailey, ACCT 7310*
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Ethics in Accounting Dr. Bailey, ACCT 7310 *
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2. Agenda What are ethics? Ethical considerations*
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Agenda
What are ethics?
Ethical considerations
Professional codes of ethics
Institute of Management Accountants (p. 16) *
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3. Ethics Defined What are ethics? Two philosophical approaches
Imply a connection with actions
Concern what’s “good” or “right” to do
Two philosophical approaches
Duty-based
Absolute laws (axioms)
Consequences or outcome
Utilitarianism (Teleological; effects)
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4. Ethical Considerations*
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Ethical Considerations
Decision making - factors
Legal
Profitable
Ethical *
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5. Ethical Considerations*
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Ethical Considerations
Decision making - trade off
right versus wrong
right versus right
costs, benefits *
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6. 4-Component Model
What leads to ethical behavior? James Rest proposed a 4-component model:
Moral sensitivity to interpret situation
Moral judgment to decide what’s best
Moral motivation or degree of commitment
Moral character or courage to overcome temptation, etc.
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7. Professional Ethics
Accountants have traditionally ranked high in public opinion surveys of the ethics exhibited by members of different professions.
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8. The Accounting Profession*
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The Accounting Profession
Accounting profession is changing
from information processor to consultant
Competitive advantage- INTEGRITY
AICPA Code of Professional Conduct
IMA Statement of Ethical Professional Practice [visit website]
The Institute of Management Accountants (IMA) is the largest association of management accountants in the United States.
It provides a program leading to the Certified Management Accountant (CMA) certificate. *
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9. Is Written Code “Good”? What message does it send?
Is it sufficient?
Compare to rules vs. principles in GAAP
Who originated the specific code?
Motive?
Enforceability?
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10. Summary Ethics are internalized moral principles*
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Summary
Ethics are internalized moral principles
Increasing importance in business
IMA Code of Ethics
One basis
Guides CMAs, other IMA members
Provides a basis to deal w/ conflicts *
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