Download EthICAL thEORY fOR fRAuD ExAmINERS

Ethical Theory for
Fraud Examiners
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What Is Ethics?
II. WHAT IS ETHICS?
Ethics as a branch of philosophy has been developing since ancient times as a way to clarify how people
interact with one another and how they should interact. Contrary to popular opinion, the field of ethics is
not primarily concerned with rules and moral codes. The Greek word ethos, from which the term ethics is
derived, refers to how other people regard a person’s character; people have strong ethical standing if
others hold them in high esteem. Similarly, people generally judge their actions by imagining them
through the eyes of their peers. The focus of any ethical system, then, involves seeking the best way for
people to deal with each other.
Accordingly, an ethical life is a social life. The decisions about how to behave are made by individuals,
but the evaluation of those acts occurs socially. Even the most private feelings people have about
themselves are affected by the approval—or disapproval—of others.
A Definition of Ethics
Ethics is concerned with what is right and wrong; it generally refers to behavior that conforms to some
norms within a specific setting—a society, culture, nation, profession, or small group. In A Critical
Introduction to Ethics, Philip Wheelwright defined ethics as:
That branch of philosophy which is the systematic study of reflective choice, of the standards of right and
wrong by which it is to be guided, and of the goods toward which it may ultimately be directed.
Wheelwright’s definition of ethics contains three key elements:
• Ethics involves questions requiring reflective choice (decision problems).
• Ethics involves guides of right and wrong (moral principles).
• Ethics is concerned with the outcomes of ethical decisions.
Accordingly, fraud examiners should have the tools necessary to address ethical problems and manage
ethical behavior.
Ethical Problems
An ethical problem is a specific situation in which a choice has to be made between alternatives that are
conflicting but arguably valid. That is, an ethical problem exists when one encounters a situation that
requires them to make a choice among conflicting but arguably valid options. Thus, in an ethical
problem, the right choice among the alternatives is not clear.
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What Is Ethics?
An ethical problem situation is a problem situation in which an individual must make a choice among
conflicting but arguably valid options that affect the well-being of other people, whether individually or
collectively. The most difficult ethical problem situations arise when two or more rules conflict or when
a rule and the criterion of “greatest good” conflict.
Ethical Theory
Ethical theory refers to the systematic effort to understand moral concepts and justify moral principles
and theories, and it is based on the questions asked when facing ethical problems.
Ethical Behavior
Ethical behavior plays a key role in the formation and continuance of relations with others, and it is
necessary in the anti-fraud profession. But what is ethical behavior? There are two standard
philosophical answers to this question: (1) ethical behavior is that which produces the greatest good, and
(2) ethical behavior is that which conforms to moral rules and moral principles.
Ethics as a Field of Study
Although ethics is a system of norms that provides guidance for behavior, it also is a field of study. As a
field of study, ethics is divided into three categories:
Metaethics
Normative
ethics
Applied ethics
Often, disagreements in discussions involving ethics occur because people approach the topic from a
different angle from one of the aforementioned three categories. Therefore, understanding these
categories and how to recognize them can be useful.
Metaethics
Metaethics (also known as analytic ethics) is the study of the origin of ethical principles and what they mean
in relation to human nature and conduct. Metaethics centers on matters of universal truths, the purpose
of reason in ethical judgments, and the meaning of ethical terms.
Metaethics addresses questions similar to the following:
• What is really being talked about when people say something should be done?
• Is morality merely a matter of individual feelings (emotions) rather than reason?
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Ethical Theory for Fraud Examiners
What Is Ethics?
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What does moral language mean?
How can moral judgments be proved?
How can one know whether moral judgments are true or false?
Why be moral at all?
Normative Ethics
Normative ethics focuses on how an individual reaches moral standards that regulate right and wrong
conduct and, therefore, this field of study is more practical than metaethics. Normative ethics involves
creating or evaluating moral standards. It addresses issues such as the guidelines for acceptable behavior
to which people should aspire, the obligations that individuals have toward others, and the
consequences of an individual’s behavior and choices on others. Thus, normative ethics involves
arriving at norms (or moral standards) that regulate right and wrong.
Normative ethics addresses questions similar to the following:
• What should be people’s moral obligations?
• What are the basic principles of right and wrong?
• What should be people’s moral values?
• What is good or evil?
• What makes someone a virtuous person?
• What are some basic virtues?
• What are some basic rights?
The Golden Rule—do unto others as you would have them do unto you—is an example of a normative
principle.
Applied Ethics
Applied ethics uses tools derived from metaethics and normative ethics to analyze controversial issues
confronting society, in an attempt to resolve, real-world situations.
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