Accounting Assignment
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ACCT544-PowerPointChapter1.pptxChapter 1
Ethical Reasoning:
Implications for Accounting
Accounting and the Public Interest
Honoring public trust
Acting with integrity in performance of professional services
Being independent of clients
Making decisions objectively
Exercising due care in the performance of services
AICPA Code of Conduct
The code is divided into two sections:
Principles: are Aspirational statements that form the foundation for the Code’s enforceable Rules of Professional Conduct. Principles are expectations but are not legally binding. The principles of professional conduct include:
Responsibilities
Public Interest
Integrity
Objectivity and Independence
Due Care
Nature and Scope of Services
Rules: enforceable applications of the Principles
Overriding responsibility of CPAs
Exercise sensitive professional and moral judgments in all activities.
Recognize the primacy of a CPA’s responsibility to the public as the way to best serve the clients’ and employers’ interest.
Continued improvement in the level of competency and quality of services
Virtue and Ethical Obligations of CPAs
Aristotle’s Virtues
Trustworthiness, benevolence, altruism
Honesty, integrity
Impartiality, open-mindedness
Reliability, dependability, faithfulness
Trustworthiness
Ethical Standards for CPAs
Integrity
Truthfulness, non-deception
Objectivity, independence
Loyalty (confidentiality)
Due care (competence and prudence)
Rights Principles
IS ALL LYING WRONG???
WHAT ABOUT IN ACCOUNTING?
AUDIT, TAX & PRIVATE INDUSTRY.
WHAT ABOUT IN BUSINESS?
Justice
JUSTICE “WHAT SOMEONE DESERVES”?
WHAT S FAIR TO ME OR TO SOCIETY?
Virtues in Accounting Practice
Ethical obligations to clients, employers, government, and public at large
Perform services
Without bias
Avoid conflicts of interests
Independence
Integrity
Acting with Integrity
Act out of moral principle, not expediency
Never let loyalty cloud good judgment and ethical decision-making
Moral Point of View
Emphasizes practical reason and rational choice
Deliberation precede choice of action
Reason
Thought
Voluntary
Ends do not justify the means
Personal Integrity
Essential characteristic for CPA
Learn to be ethical
By practice
Exercising virtues
Enable to lead life of excellence
Institute of Management Accountants (IMA)
Principles
Honesty
Fairness
Objectivity
Responsibility
Standards
Confidence
Confidentiality
Integrity
Credibility
Resolution of Ethical Conduct
Discuss issue with immediate supervisor or higher authority.
Clarify ethical issues with an IMA Ethics Counselor or other impartial advisor
Consult attorney.
DigitPrint
Outsourcing business for high-speed digital printing
$2 million in venture capital
$200,000 net income for 1st year
$1 million unrecorded accrued expenses
Income becomes $800,000 loss
DigitPrint
IMA Standards
Integrity, inform Higgins, seek outside counsel
Utilitarianism
Greatest benefit to the public, company, and employees
Rights Theory
Venture capitalist (and Higgins) have ethical right to know
Justice
Virtue of integrity and not subordinate judgment
What to DO?
Take concerns to Higgins
Whistle-blowing
Confidentiality
Right to do versus the Right thing to do
