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Running head: UTILITARIANISM AND DEONTOLOGY IN ACCOUNTING 1
Utilitarianism and Deontology in the Accounting Profession
Joe R. Estrada
Liberty University
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Table of Contents
I. Abstract ................................................................................................. 3
II. Introduction ............................................................................................ 4
III. Deontology ............................................................................................. 5
IV. Deontology Critique ............................................................................... 7
V. Utilitarianism .......................................................................................... 8
VI. Utilitarianism Critique ........................................................................... 10
VII. Systems evaluation ................................................................................ 11
a. Organizational culture of the accounting profession .................... 11
b. AICPA Code of Professional Conduct ....................................... 12
VIII. Ethics Education .................................................................................... 13
IX. Biblical Perspective ............................................................................... 14
X. Conclusion ............................................................................................. 15
XI. References ............................................................................................. 16
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Abstract
Professional code of conduct and ethical theories are essential in streamlining the accounting
profession. The profession has been faced with ethical misconduct such as a lack of integrity and
objectivity, and this behavior is driven by self-interest and advantage. Most of the accountants
find themselves caught in ethical dilemmas that cannot be clearly solved. Ethical theories,
deontology, and utilitarianism are used to resolve ethical dilemmas in the accounting profession.
Furthermore, the professional codes of conduct reinforce the behavior of the accounting
professionals. Apart from the formulation of the code of conduct, is imperative for the
professionals to receive ethical teaching.
Keywords: utilitarianism, deontology, behavior, moral, ethics, accountant
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Moral theories prescribe or enumerate what constitutes moral behavior and what does
not. Moral theories try to answer the question of how one should act. The most commonly used
ethical theories are utilitarianism and deontology. The two theories are perceived to be the direct
opposite of each other as utilitarianism focuses on the outcomes of action(s) while deontology
focuses on the act itself (Geisler, 2010).
Utilitarianism theory postulates that something is ethical if the outcome maximizes the
utility of the maximum number of people. In this theory, the action is selected based on the
intended result. Therefore, the action to be taken to achieve maximum utility is not a factor in
determining morality. Briefly, the theory believes there is nothing as good or bad action, but only
a good or bad outcome. Serious scrutiny of the theory indicates that pleasure is the main aim in
life as this is the utility sought thus disregarding the importance of rules, honor, achievement,
and other good deeds. The theory demands that everything that human beings experience is
converted to utility and measured the pleasure or pain attained from it.
Just like utilitarianism, deontology is also a normative theory as it is based on norms.
Unlike utilitarianism, deontology does not focus on the consequences but the actions. For
something to be considered ethical, the action must be morally right regardless of the outcome.
In this theory, duty overrides everything else and therefore laws, obligations, responsibilities and
commitments in whatever they do bind humans. Immanuel Kant developed a type of obligation
referred to as categorical imperative, and one of the formulations of this obligation is “act only
by that maxim by which you can, at the same time, will that it be a universal law” (Misselbrook,
2013). According to this formulation, an action should be such that it can be universally adopted
or it would be all right if another person performed a similar action. For instance, is it ok to steal
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food because one is hungry? The answer is NO as it would not be ok if others stole for other
reasons. Stealing is not universally adopted compared to ‘not stealing.’
Deontology
As earlier noted, deontology is duty ethics that emphasizes the actions rather than the
outcomes. Something is ethical only if the actions are moral. In simple terms, it is ok, to tell the
truth even if someone will get hurt or die. Furthermore, the human action is immoral if the
outcome is good but the action was wrong. Therefore, in the stricter sense, what duty ethics
requires is for someone to die from hunger rather than stealing. Deontologists believe that the
outcomes can never justify the actions in any given situation, as the latter is superior.
Immanuel Kant is the most prominent deontologist, and he based his work on human
rationality. Unlike animals that are irrational, Immanuel Kant notes that humans possess the
ability to reason and thus humans need to use this for the sake of duty and moral law (Newton,
2016). Immanuel Kant believes there is a clear distinction between rationality and
emotions/feelings and humans should act based on the former and not the latter. Basing human
action on emotions and feelings is inclined towards consequentialism, which compromises on
duty. Immanuel Kant further, talks about goodwill, as the only thing that is good without
qualification. Humans will qualify the moral action and its worth.
Immanuel Kant developed three formulations of the categorical imperative. The first
formulation states that ‘act only by that maxim by which you can, at the same time, will that it be
a universal law.’ The formulation reveals that moral propositions should be unconditional. Also,
the moral proposition should not change with situations. The categorical perspective goes against
situationism, which disregards personal traits as a driver of human behavior as external forces
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influence them. Action needs to be universal, meaning it cannot change with changing situations
and it is applicable to any rational being. Duty ethics applies perfect duties to situations that
warrant such duties such as issues of lying and cheating. In other cases, imperfect duties are
allowed where humans have a subjective preference for choosing duties. Imperfect duties are
optional as one will not be blamed if they don’t perform them, but will receive praise if they do.
Imperfect duty is like going an extra mile to do something one was not required to do. It is like
taking additional duties.
The second formulation states that humans should not be treated as a means to an end but
an end because of them. Immanuel Kant meant that one could not use themselves or other people
to achieve a particular purpose. People should seek an end that is equal for all people. Humans
should avoid asserting their rights over others but instead should endeavor in achieving the
principle of free rational action. According to Immanuel Kant, “no matter what advantages we
may gain by treating a person as a means to a so call just end, will never be sufficient to offset
the value of their personhood” (Brassington, 2006). Kant is strongly against degrading or
disrespecting humans through inhumane acts such as slavery that is meant to achieve a particular
end by using humans as the means (Duska, & Duska, Ragatz, 2011). Furthermore, humans can
use themselves as a means to an end such as committing suicide, which is not acceptable and
unethical.
The third formulation states that “therefore, every rational being must act as if he were
through his maxim always a legislating member in the universal kingdom of ends” (Kupperman,
2012). In an attempt to universalize maxims, they should not be incoherent with nature where
there is disharmony with a possible kingdom of ends. Kingdom of ends is metaphysical in
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explaining ethics, but it entails ensuring there is a reconciliation of rights where universal laws
and system unite rational beings.
Deontology Critique
The first criticism of deontology is the much trust it puts on authorities (Misselbrook,
2013). Authorities make duties, and some of these authorities are human beings, therefore putting
too much faith in authorities’ means humans is perfect which is not true. It is expected that
nothing made by humans including laws are flawless. Humans are to commit errors, and that’s
why it would be wrong to entirely believe in laws and standards created by man to define ethics.
One of the most significant criticisms of the deontological theory is that it rebates the
result as a legitimate factor in assessing the ethicalness of an activity. While it isn't astute to
depend entirely on the outcome as in utilitarianism/consequentialism, it's not a good idea to
entirely overlook the result inside and out (May, 2015). In light of Kant's equation of humankind,
human life is consecrated and sacred, which means one can't enslave a couple of individuals
regardless of whether it would empower more individuals to have better existences. Executing
one individual to spare the lives of millions is impermissible in deontological ethics.
The moral absolutes proclaimed by deontology makes things look wrong even if they are
right. Some of the moral absolutes include “stealing is wrong,” killing is wrong,” lying is
wrong,” among others. For instance, wouldn’t it be ok to kill in self-defense or to protect the
lives of other people? The answer is a resounding YES as it is almost impractical to wait for a
thief to kill the people one loves for the purposes of duty or obligation not to kill. The
absoluteness of Katian ethic makes it impractical to live in a world that is not perfect as these
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ethics can only be applied in Utopia where no one expects someone to be threatened by killers so
that they can protect themselves.
Utilitarianism
Utilitarianism is an ethical theory that advocates activities that advance general
satisfaction and rejects activities that cause despondency. Utilitarian rationality, when
coordinated to making social, monetary or political choices, goes for the advancement of society.
Utilitarianism aims at maximizing the utility of the public or masses. Bentham's Principle of
Utility appreciates the central role of pleasure and pain in human life and affirms or objects to an
activity based on the measure of agony or joy achieved (Sokol, 2009). In addition, the principle
likens pleasure with morality and pain with wickedness and attests that pain and pleasure can be
measured.
John Stuart Mill balanced the more indulgent propensities in Bentham's theory by
stressing that it is not the amount of joy, yet the nature of bliss that is integral to
consequentialism. Furthermore, Mill noted that the analytics is nonsensical - characteristics
cannot be evaluated, i.e. there are higher and lower pains and pleasures (Crisp & Kringelbach,
2017). Consequentialism alludes to the greatest happiness principle as it tries to advance the
ability to accomplish higher pleasures for the most number of individuals.
Consequentialists characterize utilitarianism as a hypothesis dependent on the rule that
"activities are right in extent as they will, in general, advance bliss, wrong as they will in general
deliver the opposite of pleasure. Consequentialists categorize satisfaction or utility as pleasure or
happiness and the absence of agony/pain. John Mill contends that joy can vary in quality and
amount, and that pleasures that are established in one's higher psyche ought to be weighted more
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vigorously than the lower pleasures Moreover, Mill contends that individuals' accomplishment of
objectives and goals, ought to be considered as part of happiness (Duska, et al., 2011).
Consequentialism corresponds with natural actions that emanate from people's social
nature. In this manner, if society somehow managed to hold onto utilitarianism as an ethic,
individuals would generally disguise these benchmarks as ethically official. John Mill notes that
satisfaction is the sole premise of profound quality and that individuals never want anything
other than bliss. He underpins this case by demonstrating that the various objects of individuals'
craving either intend to bliss, or incorporated into the meaning of satisfaction. Mill clarifies
finally that the opinion of equity is indeed founded on utility, and that rights exist simply because
they are fundamental to human happiness.
In the thought of outcomes, Utilitarian incorporates the majority of the positive and
negative generated by an act, in the case of emerging after the act has been performed or amid its
execution. If the distinction in the results of different action(s) is not significant, a few
consequentialists do not see the decision between them as an ethical issue. As indicated by Mill,
acts ought to be delegated ethically as either right or wrong just if the results are of such
noteworthiness that a man would wish to see the agent constrained, to act in a particular way.
In surveying the outcomes of activities, Utilitarianism depends upon some hypothesis of
intrinsic value: something is held to be ethical in itself (Orsi, 2012), aside from further results,
and every single other value are accepted to get their value from their connection to this
characteristic good as an obligation. Bentham and Mill were libertines; i.e., they broke down
satisfaction as equalization of joy over agony and trusted that these sentiments alone are of
intrinsic value and disparagement. Consequentialists likewise accept that it is conceivable to
analyze the natural qualities delivered by two elective activities and to gauge which would have
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better outcomes (Heinzelmann, Ugazio & Tobler, 2012). Bentham trusted that libertine math is
hypothetically conceivable. A moralist, could entirely up to the units of pleasure/happiness and
the units of agony/pain for everybody prone to be influenced, and could accept the equalization
as a proportion of the general good or abhorrence propensity of an activity. Such exact estimation
as Bentham imagined is maybe not fundamental, but instead, it is regardless vital for the
Utilitarian to make some relational examinations of the worth of the different cause of actions.
Utilitarianism Critique
The hypothesis of utilitarianism has been condemned for some reasons. Those opposed to
consequentialism hold that it does not give sufficient security to individual rights, i.e., not all
things can be estimated by a similar standard, and that satisfaction or happiness is more
unpredictable than reflected by the theory. The theory focuses on the common good or maximum
happiness, which can lead to the development of unjust laws and standards (Leuven, & Visak,
2013). For instance, in a hospital where four people who need each a different body organ to
survive: heart, lungs, kidney, and liver, and then it’s correct to say that all these organs can be
harvested from a single person in order to save four lives.
In spite of the fact that the far-reaching routine of stealing and lying would have adverse
outcomes, bringing about lack of dependability and security, it isn't sure that a periodic lie to
evade humiliation or a periodic robbery from a rich man would not have good results, and in this
manner be allowable or even required by consequentialists. In any case, the Utilitarian promptly
answers that across the board routine of such acts would result in lost dependability and security.
To meet the complaint to not allowing an intermittent lie or stealing, a few rationalists have
developed a term: "rule" Utilitarianism. It will enable a specific follow up of a particular
action(s) to be declared as either right or wrong in accordance with a useful standard or violation
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of the same, and; a standard is judged either valuable or not by the outcomes of its general
practice.
Lastly, life is more than a balance between pleasure and pain as stipulated in Utilitarian
theory. There are specific non-hedonistic values that exist which do not warrant one losing their
consequentialism. The intrinsic value of happiness or rather the disvalue of pain cannot be
further broken down to higher and lower levels of pleasure and pain.
Systems Evaluation
The Organizational Culture of Accounting
Two things primarily drive the organizational culture: professional values/ethics and
personal values/ethics. Primary values are acquired from childhood, specifically from parents,
school, church and the society while professional values are obtained during adulthood when
pursuing a particular career. Most of these values are similar, for example, honesty is a value that
can be obtained during childhood as well as during adulthood or in a professional setting
(Westwood, 2016). Professional values are stricter than personal values as they are less flexible
regarding implementation compared to personal value. Despite all, accountants act based on both
personal and professional values in making professional judgments. Personal values are
ingrained in people’s behavior such that they form their personal traits, and it is sometimes
difficult to use professional values to change personal values. For instance, if an individual has
grown up as a dishonest person, he is likely to take the same attribute to his/her accounting
profession, even if there is a code of conducts that require honesty to be upheld. On the other
hand, sometimes professional values are superior to personal values due to the fear of
repercussions of going against the professional code of conduct. Individuals with positive
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personal values tend to make better accountants as they have no difficulty in aligning themselves
with professional values.
Traits of objectivity and integrity are highly regarded in the accounting profession
(Duska, et al., 2011). All the professionals are required to conduct themselves while undertaking
their duties with the highest sense of integrity. The principle of integrity is in tandem with the
deontological theory where all humans are duty bound to a particular task or obligation. In
instances where an accountant is faced with a challenge, and there are no clear standards or
regulations, they should act by asking themselves if they are acting the same way a person with
integrity would do. Objectivity is about impartiality, independence and being free from conflict
of interest. An accountant who lacks independence and objectivity is likely to go against the
accounting standards and ethical practice in providing their services. In any case that an
accountant has a conflict of interest, they should declare it and if need be relinquish their duty to
be carried by another person that does not have a conflict of interest.
AICPA Code of Professional Conduct
The code is more inclined to duty ethics than consequentialism. The code is concerned
about the outcomes of an action as they need to be of public interest, but the actions are more
important than the results. As outlined earlier, professional accountants are expected to conduct
themselves with the highest sense of integrity. Deontology ethics is absolutism ethics where the
values are not relative depending on the situation. Despite the strictness required in observing
integrity, the AICPA code accepts inadvertent or honest errors.
There are instances where there is no clear way on how to act due to the lack of proper
regulations to resolve a matter. The use of deontology instead of utilitarianism would be the best
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approach when faced with a dilemma in accounting. For instance, when an accountant is
compelled by top management to tweak the books to favor a particular end, the accountant would
be in a dilemma. Fabricating the financial statements would protect his job and save the job of
many others as failure to do so may lead to liquidation. Using utilitarianism requires the
accountant to weigh which pleasure is maximized in his or her action, that of employees or that
of investors which accentuates the dilemma. But for deontology, the accountant knows what to
do which involves observing integrity, objectivity, independence, and due care. According to
Duska, et al. (2011)”accountants have a responsibility to present the most truthful and accurate
financial picture of an organization (p.77).
Ethics Education
The increase in corporate scandals in the past two decades creates the need for ethical
teaching for all professions. It is without a doubt that the formulation of codes of conduct is not
sufficient for streamlining human behavior. More reinforcement needs to be made in the form of
ethical teaching. Professionals should be equipped with adequate knowledge on how to solve
critical ethical issues. Professionals need to be in a position of identifying what is right and
wrong and what principles and procedures to use when in a dilemma (Cameron, & O’Leary,
2015). Empathy is an essential lesson in ethical teaching as it informs the professionals to
experience a situation from the perspectives of others. Empathy or emotional intelligence plays a
central role in decision making as the professionals would visualize and appreciate the impact of
their actions if they did it in a certain way. The professionals need to be imparted with the power
of reasoning. Reasoning allows individuals to see situations from different perspectives and
provide informed decisions (Andersen, & Klamm, 2018).
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There are times when the ethical teaching may not work, and thus religion has to kick in.
Religion can assist in imparting ethical skills to professionals. Christian ethics is almost similar
to Kantian ethics as the values espoused in the Bible are absolute such as honesty. Due to the
awe that most people have on religion, they are likely to follow these codes of conduct if they are
communicated in a religious setting.
Biblical Perspective
If one submits their professionalism/character to the Lord and walks with trustworthiness,
clients will rush to their place of business, and employees/staff will stay faithful. As a business
leader, one ought to enable oneself to be held accountable by others; this expands one's power to
consider others accountable. Numbers 30:2 states “When a man makes a vow to the LORD or
takes an oath to obligate himself by a pledge, he must not break his word but must do everything
he said” (NIV). Successful accounting managers’ manufacture trust through integrity,
consistency, and follow-through; in doing so one’s leadership is enhanced by showing others
how it’s done. Along these lines, a Christian business leader should lead his/her business as
indicated by the respectability of their own words; since no one will tune in to somebody who
hasn't established notoriety for decency and integrity. Finally, brothers and sisters, whatever is
true, whatever is noble, whatever is right, whatever is pure, whatever is lovely, whatever is
admirable—if anything is excellent or praiseworthy—think about such things (Philippians 4:8,
NIV)
It is difficult to anticipate the results of one's actions with complete sureness. The main
thing one can make certain of is whether his/her actions are moral. Deontologists trust that we
must be in charge of our behavior and not the action of others. Those actions are to follow the
laws and commandment laid out by God and the government authorities, what this means is that
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deontologists lean toward more to Christian’s ethical standards. In essence, by maintaining one’s
focus on the results will be doing so, not abide by the government laws, God’s commandments,
and Christian values are, therefore, an indication of ignoring our actions. Romans 13:1 also states
to “let everyone be subject to the governing authorities, for there is no authority except that
which God has established, the authorities that exist have been established by God” (NIV). The
fact that the accounting profession has accounting standards, codes, regulatory bodies such as
Public Company Accounting Oversight Board (PCAOB), Securities Exchange Commission
(SEC), and American Institute of Certified Public Accountants (AICPA), is an indication that
Utilitarianism is not an acceptable method/sufficient in the accounting profession. Romans 2:13
states “for it is not those who hear the law who are righteous in God’s sight, but it is those who
obey the law who will be declared righteous (NIV).
Conclusion
The corporate world is reeling from professional that lack professionalism in undertaking
their responsibilities. The accounting profession is at the center of the misrepresentation of
financial statements to achieve a particular gain. Deontology and utilitarianism theories have
been helpful in solving ethical dilemmas in the accounting profession. Deontology advocates for
ethical actions while utilitarianism advocates for ethical outcomes. Deontology serves better in
resolving ethical accounting issues as it bounds the professionals to duties and obligations. These
theories have weaknesses that compromise on the usage: deontology believes much on human-
made laws which are prone to error and utilitarianism is too demanding to help everyone. The
high number of ethical cases can be remedied through ethical teaching, and this can be elevated
to religious teachings.
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