Chapter 1 Flashcards
What is the basis of accounting?
Integrity
A person with integrity will act out of what instead of expediency?
Moral principle
What does integrity mean?
Person acts on principle — a conviction that there is a right way to act when faced with an ethical dilemma.
What is key to carrying out the golden rule?
Integrity
In western tradition of ethics it is sometimes called what?
Moral philosophy
Ethics and morals are sometimes used interchangeably but they are different. What is the difference between the two?
Ethics — refer to rules provided by an external source such as codes of conduct for a group of professionals
• involves the study and application of standards and judgements
Morals — refer to an individuals own principles regarding right and wrong and may be influenced by an religion or societal mores
•employ moral standards/principles against which we compare what we see in order to form a conclusion
Ethics consists of
(1) accepted standards for proper behavior
(2) practices a profession follows
(3) laws established and enforced in society
(4) expectations of those live and behave in society
Ethics indicates how people should act and it is prescriptive
True
What are values?
Basic and fundamental beliefs that guide or motivate attitudes or actions
Values is concerned with how a moral person should behave to act in an ethical manner.
T OR F
FALSE
Ethics is concerned with HOW people should behave to act in a ethical manner
Values is concerned with how a person behaves in certain situations and is predicted on a person beliefs that may or may not be ethical
Being ethical is the same as following the law
T OR F
FALSE IT IS NOT
Ethical people always try to be law abiding, there may be instances where their sense of ethics tells them to not follow the law
Laws create a minimum of standards.
True
What is known as the moral point of view?
Is where the decision maker is willing sometimes to take action that may not be in his or her best interest
What is ethical relativism?
Is a philosophical view that what is right or wrong and good or bad is not absolute but variable and relative depending on person or social situation
What is situation ethics?
Takes normative principles such as virtual, law and Kant’s categorical imperative that relies on actions and generalized them so the agent can make sense of ones experience when confronting ethical dilemma
Ethical relativism uses universal moral principles, claiming moral codes are strictly subjective and situational ethics do recognize existence of normative principles but do not question whether it should be applied as directives or used as guidelines instead
T or F
Partial of this statement is FALSE
Ethical relativism DOES NOT USE
Situational ethics DOES QUESTION
Hofstede identified 4 cultural dimensions, what are the 4?
1) power distance
2) individualism
3) masculinity
4) uncertainty avoidance
What is individualism ?
Focuses on the degree that society reinforces individual or collective achievement and interpersonal relationships
In individualistic societies people with high IDV look after who?
In collectivist societies, people with low IDV belong in what?
Themselves and direct family
In groups that take care of them in exchange for loyalty
What is uncertainty of avoidance?
Describes the tolerance for uncertainty and ambiguity within society
Someone with high UAI, has high or low tolerance for uncertainty and ambiguity?
Low
Someone with Low UAI, has high or low tolerance for variet if opinions
High
What are virtues?
Are attitudes, dispositions or character traits that enable us to be and to act in ways that develop this potential
What are the six pillars of character?
1) trustworthiness
2) respect
3) responsibility
4) fairness
5) caring
6) citizenship
Dimensions of trustworthiness include what?
1) honesty
• express truth as we know it
2) integrity
• essential element in trusting that person
• act on principle rather than expediency
3) reliability
•promises we make are relied on and must follow
through
4) loyalty
• requires to keep financial and other info
confidential when deals with employer or client
Integrity means to act on what?
Principle rather than expediency
6 pillars
- Respect
- Responsibility
- Fairness
- Caring
- Citizenship
- Trustworthiness
2) responsibility
• accountable for what we do and who we are
3) fairness
• treat others equally
• can be equated with objectivity
4) caring
• caring is empathy
5) citizenship • includes civic virtues and duties that prescribe on how we ought to behave as a part of the community • must obey laws • be informed • volunteer • vote
What is objectivity?
Means financial and accounting information needs to be presented free from bias that is consistent with the evidence and not based on ones opinion
What is empathy?
The ability to understand be sensitive to and care about the feelings of others
Caring and empathy support each other and
Caring and empathy support each other and allows a person to what?
To our herself in the position of another. This is essential to decision making
Can u be civil and not entirely ethical?
Yes
Can be well behaved and gracious to others but still be motivated by non ethical values
Can you be ethical and not terribly civil?
Treating others badly and disrespect means u have not confirmed to the pillars of character
Professionalism and work ethic are important qualities of accounting professionals
T OR F
True
What are the two important teleological philosophies that typically guide decision making in an individual business decisions?
1) egoism
2) utilitarianism
What is egoism
Defines right or acceptable behavior in terms of its consequences for the individual
What do egoists believe?
They believe that they should make decisions that maximize their own self interest
What is Enlightened egoism?
Emphasizes more of a direct action to bring about the best interests of a society
Allow for well being of others because they help achieve some ultimate goal for decision makers while self interest is still paramount
What is utilitarianism?
Follows a relatively straightforward method for deciding the morally correct course of action for any particular situation
What are the steps that utilitarians follow?
1) identify various courses of action
2) determine the consequences of all alternatives and select one that provides greatest benefit
What are act utilitarians?
Examine the action itself rather than general rules governing actions to asses whether it will result in greatest utility
What are rule utilitarians?
Must choose action that conforms to general rule that would have best consequences
What is deontology?
Refers to moral philosophies that focus on rights of individuals and on the intentions associated with a particular behavior rather than on consequences
What do deontologsts believe?
Believe moral norms establish the basis for action
Based on reasons not outcome
What is a right?
Justified claim on others
Justice is associated with what?
Rights
Fairness
Equality
Justice and fairness are used interchangeably but there are some differences.
What are the differences?
1) justice —> used with reference to standards rightness
2) fairness —> used with regard to an ability to judge without reference to ones feelings or interests
Virtue theorists place emphasis on learning rules and stress less on importance of developing good habits of character?
T or F
F
LESS ON RULES AND STRESS MORE ON habits
Cardinal values consist of?
1) wisdom
2) courage
3) temperance
4) justice
Other important virtues consist of?
1) fortitude
2) generosity
3) self respect
4) good temper
5) sincerity
Are CPAS legally held to principles?
No
The principles of the AICPA code are based on what?
Values of the profession and traits of character (virtues) that enable CPAs to meet their obligations to the public
Principles include?
(1) responsibilities
(2) public interest
(3) integrity
(4) objectivity and independence
(5) due care
(6) scope and nature of services
Objectivity applies to all CPAs or just some CPAs?
ALL CPA
Independence applies to some CPA or all CPA?
Applies to only CPA who provide attestation services ( auditing and other assurance services) not tax and advisory services)
