Question

 

1. In the reading “What is the ‘Good’ Forensic Accountant? A Virtue Ethics Perspective”, the author supports the use of a ‘Virtue Ethics’ approach to the training and practice of professionals. Briefly describe Virtue Ethics and explain why such an approach is both relevant and useful to finance and accounting professionals.

 

2. “All that is needed for good behaviour is a Code of Ethics.” Do you agree or disagree with this statement. Justify and explain your answer.

Answer 1

 

VIRTUE ETHICS :

We now turn to the development of a normative framework with which we can evaluate aspects of culture that are dysfunctional or dehumanising. As we have argued, risk management is a normative exercise, and is thus as much the proper study of ethics as of statistical technique, and of law as well as economics. The idea that individuals possess virtues that come to define their character comes from ancient philosophers such as Aristotle and Confucius

Virtues are habits of being, acquired through practice, and as such they apply to everyone. Virtues are developed through action, and ultimately lead one to what Aristotle termed ‘the good life’ , for oneself and for others (McPherson, 2012). They are aspirations that (almost) everyone who has thought about them, would want to achieve and are seen as the means through which individuals can attain ‘the good life’, or human flourishing. Various philosophers have sought to identify the virtues seen as necessary for ‘the good life’, including the virtues of courage, honesty, prudence, fidelity, justice and compassion (see, for example, Comte-Sponville, 2001). In what follows, we attempt to produce a framework by which they can be discussed and applied.

virtue ethics provide the most promising approach to shifting attitudes, behavior and risk culture (or character) to recognise fully the legal and moral obligations of financial organizations. A virtue ethics lens also considers how the financial sector can reorient towards an overarching purpose (or telos) which includes the pursuit of common and individual good in some form1 (Arjoon, 2000) and also what philosopher Alasdair MacIntyre (2007) has called the ‘internal goods’ of excellence in practice.

RELEVANCE OF VIRTUE EHICS IN FINANCE AND PROFESSIONAL FIELDS:

• The virtues should therefore be seen as finding their full flowering in community, and indeed are necessary for the development and maintenance, of community– of which business is an example. Organizations can be seen as an instrument for the achievement of the good life, but clearly also have something of a life of their own that transcends that of their members.
• It is not unreasonable to think of virtuous organizations as those that are motivated by a meaningful social purpose that – justly – takes the aspirations and expectations of all stakeholders into account (Collier, 1995). Such organizations have “appropriate and efficient decision-taking structures in the face of internal and external pressures” and managerial practices “in which people find it possible to fund meaning and fulfilment in excellence as defined in performance terms".
• Clearly the social purpose and requirement for justice remains. The organization may have greater capability but it is difficult to see how it might have moral obligations that differ from an individual. The internal processes need to perform the same functions of control of ‘internal and external pressures’, although they are clearly entirely different to individual virtues. That would leave wisdom as the managerial process of ensuring that the needs of internal stakeholders particularly are met and fulfilled, and that they all play their proper role.
• Business and government organizations are valuable social structures; at their best creating prosperity and providing communities where individuals can flourish. On the other hand, they can be places of manipulation and exploitation both internally and externally – particularly if limits are not recognised. The personal virtue of justice requires a recognition of the dignity of all within community; organizations where people are not respected, but manipulated and coerced into unjust or dishonest behavior cannot be virtuous.
• It is of course true that there are times when an organization cannot serve its social purpose without significant constraints on those who are serving within it. We would however hold that a central tenet of justice is that all people have an equal right to dignity. Each such claim needs evaluation on its merits: the possibility that it is manipulative is always present.

(B )All that is needed for good behaviour is a Code of Ethics :

YES, i do Agree with the statement as the good behavior in the financial world as well as for individual can be adopted only because of good code of ethics he built up in it.

The folloing are the reasons for good code of ethics,

1.Preach Company Integrity:

To have code of conduct for your company, make it required reading for all employees and refer to it often even to customers because you are  announcing your intent to operate with integrity in all matters. It is part of your company culture. Clients know they'll be treated fairly and with respect, while potential customers view your company as one with which it is worthy to do business.

Consumers know that when they ask for price quotes, they will be given honestly and fairly. If products or services come with a warranty or guarantee, it will be honored according to its terms and conditions. When customers need help with your products, you will help them because it's the right way to act.

2. Protects Employees’ Rights

A primary purpose of code of ethics training is to ensure that managers understand employees’ legal rights and that employees know how to advocate for themselves in situations like:

• Pay disputes
• Discrimination
• Sexual harassment
• Disparate treatment
• Resolving conflicts
• Pursuing promotions

3. Define Expectations of Employees in Organisation

A code of conduct in business spells out to all employees what is expected of them, with no wiggle room and no excuses. You've set standards that you expect everyone in the company to follow. If they act unethically, they know there will be consequences, possibly even the loss of their job.

The SOX Act ruling became law in 2002 as a result of the unethical behavior at the time by numerous executives of large companies like Enron and others. To deter such fraud from occurring again, the act enforces ethical accounting and reporting practices by top company executives and financial personnel of public companies as well as the need to have a code of conduct.

You, of course, want to avoid having any of your employees act unethically in their jobs. Even if your company isn't public, its actions become known to its public — your customers and potential customers — and even small improprieties can ruin your reputation. Having an explicit code of conduct that applies to all employees outlines expectations for everyone, from your CEO and downward.