Almost 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?
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