1/15/2014 ethics in accounting dr. bailey, acct 7310

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08/27/22 Ethics in Accounting Dr. Bailey, ACCT 7310

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Page 1: 1/15/2014 Ethics in Accounting Dr. Bailey, ACCT 7310

04/10/23

Ethics in AccountingDr. Bailey, ACCT 7310

Page 2: 1/15/2014 Ethics in Accounting Dr. Bailey, ACCT 7310

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Agenda

What are ethics? Ethical considerations Professional codes of ethics

Institute of Management Accountants (p. 16)

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Ethics Defined What are ethics?

Imply a connection with actions Concern what’s “good” or “right” to do

Two philosophical approaches Duty-based

Absolute laws (axioms) Consequences or outcome

Utilitarianism (Teleological; effects)

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Ethical Considerations

Decision making - factors Legal Profitable Ethical

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Ethical Considerations

Decision making - trade off right versus wrong right versus right costs, benefits

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4-Component Model What leads to ethical behavior?

James Rest proposed a 4-component model: 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.

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Professional Ethics Accountants have traditionally ranked

high in public opinion surveys of the ethics exhibited by members of different professions.

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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] 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.

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Is Written Code “Good”? What message does it send?

Is it sufficient? Compare to rules vs. principles in

GAAP Who originated the specific code?

Motive? Enforceability?

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Summary Ethics are internalized moral

principles Increasing importance in

business IMA Code of Ethics

One basis Guides CMAs, other IMA members

Provides a basis to deal w/ conflicts