Download Ethics in Accounting

Ethics in Accounting
Dr. Bailey, ACCT 7310
5/22/2017
Agenda



What are ethics?
Ethical considerations
Professional codes of ethics

5/22/2017
Institute of Management Accountants (p. 16)
Ethics Defined

What are ethics?



Imply a connection with actions
Concern what’s “good” or “right” to do
Two philosophical approaches

Duty-based


Consequences or outcome

5/22/2017
Absolute laws (axioms)
Utilitarianism (Teleological; effects)
Ethical Considerations

Decision making - factors



5/22/2017
Legal
Profitable
Ethical
Ethical Considerations

Decision making - trade off



5/22/2017
right versus wrong
right versus right
costs, benefits
4-Component Model

What leads to ethical behavior? James
Rest proposed a 4-component model:




5/22/2017
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.
Professional Ethics

Accountants have traditionally ranked high in
public opinion surveys of the ethics exhibited
by members of different professions.
5/22/2017
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]


5/22/2017
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.
Is Written Code “Good”?

What message does it send?



Is it sufficient?
Compare to rules vs. principles in GAAP
Who originated the specific code?


5/22/2017
Motive?
Enforceability?
Summary



Ethics are internalized moral
principles
Increasing importance in business
IMA Code of Ethics


One basis
Guides CMAs, other IMA members

5/22/2017
Provides a basis to deal w/ conflicts