In: Accounting
How to aaply the eron case to the following question
Ethical Framework
a) Propose an ethical framework for setting appropriate standards of conduct for professional accountants producing a higher level of ethical
values and decision making, as they relate to this case. The framework should include the ways in which management will be involved in the
process and what company resources should be available to employees to help make them more ethical choices.
b) Could internal controls have been utilized to produce more ethical behavior? Would a plan by corporate governance be an appropriate vehicle
for delivering these internal controls to encourage ethical behavior? Discuss.
Decisions about right and wrong permeate everyday life. Ethics should concern all levels of life: acting properly as individuals, creating responsible organizations and governments, and making our society as a whole more ethical. This document is designed as an introduction to making ethical decisions. It recognizes that decisions about “right” and “wrong” can be difficult, and may be related to individual context. It first provides a summary of the major sources for ethical thinking, and then presents a framework for decision-making.
1. WHAT IS ETHICS?:
Ethics provides a set of standards for behavior that helps us decide how we ought to act in a range of situations. In a sense, we can say that ethics is all about making choices, and about providing reasons why we should make these choices.
Ethics is sometimes conflated or confused with other ways of making choices, including religion, law or morality. Many religions promote ethical decision-making but do not always address the full range of ethical choices that we face. Religions may also advocate or prohibit certain behaviors which may not be considered the proper domain of ethics, such as dietary restrictions or sexual behaviors. A good system of law should be ethical, but the law establishes precedent in trying to dictate universal guidelines, and is thus not able to respond to individual contexts. Law may have a difficult time designing or enforcing standards in some important areas, and may be slow to address new problems. Both law and ethics deal with questions of how we should live together with others, but ethics is sometimes also thought to apply to how individuals act even when others are not involved. Finally, many people use the terms morality and ethics interchangeably. Others reserve morality for the state of virtue while seeing ethics as a code that enables morality. Another way to think about the relationship between ethics and morality is to see ethics as providing a rational basis for morality, that is, ethics provides good reasons for why something is moral.
Three Broad Types of Ethical Theory:
Ethical theories are often broadly divided into three types: i)
Consequentialist theories, which are primarily concerned with the
ethical consequences of particular actions; ii)
Non-consequentialist theories, which tend to be broadly concerned
with the intentions of the person making ethical decisions about
particular actions; and iii) Agent-centered theories, which, unlike
consequentialist and non-consequentialist theories, are more
concerned with the overall ethical status of individuals, or
agents, and are less concerned to identify the morality of
particular actions. Each of these three broad categories contains
varieties of approaches to ethics, some of which share
characteristics across the categories. Below is a sample of some of
the most important and useful of these ethical approaches.
FRAMEWORKS FOR ETHICAL DECISION-MAKING:
Making good ethical decisions requires a trained sensitivity to
ethical issues and a practiced method for exploring the ethical
aspects of a decision and weighing the considerations that should
impact our choice of a course of action. Having a method for
ethical decision making is essential. When practiced regularly, the
method becomes so familiar that we work through it automatically
without consulting the specific steps. This is one reason why we
can sometimes say that we have a “moral intuition” about a certain
situation, even when we have not consciously thought through the
issue. We are practiced at making ethical judgments, just as we can
be practiced at playing the piano, and can sit and play well
“without thinking.” Nevertheless, it is not always advisable to
follow our immediate intuitions, especially in particularly
complicated or unfamiliar situations. Here our method for ethical
decision making should enable us to recognize these new and
unfamiliar situations and to act accordingly.
The more novel and difficult the ethical choice we face, the more
we need to rely on discussion and dialogue with others about the
dilemma. Only by careful exploration of the problem, aided by the
insights and different perspectives of others, can we make good
ethical choices in such situations.
Three Frameworks
Based upon the three-part division of traditional normative ethical
theories discussed above, it makes sense to suggest three broad
frameworks to guide ethical decision making: The Consequentialist
Framework; The Duty Framework; and the Virtue Framework.
While each of the three frameworks is useful for making ethical decisions, none is perfect—otherwise the perfect theory would have driven the other imperfect theories from the field long ago. Knowing the advantages and disadvantages of the frameworks will be helpful in deciding which is most useful in approach the particular situation with which we are presented.