Chapter 10 Flashcards
What are ethics?
the moral principles that govern a person’s behaviour or the conducting of an activity
Business ethics applies ethical principles to business situations, such as?
- Misleading advertising
- Political donations
- Tax avoidance
What is the consequential approach to ethics?
Based on 2 principles;
- it is the results of an act which determine where it is right or wrong
- the act is seen to be better, or more right, the more good consequences results from it
What are the two forms of consequentialism?
- Utilitarism
- Egoism
What is utilitarianism?
this school thought states that people should think of others. They should maximise happiness for the greatest no. of people.
What is egoism?
People should look after themselves. They should maximise self interest.
What is pluralism?
the idea that there are many theories about what is right or wrong and conflicts may arise between values that are equally correct and fundamental.
What do pluralists believe?
they do not believe that there is only one right answer to an ethical dilemma but equally they do not believe that there is no wrong answer
What is relativism?
the idea that ethics are not absolute but are shaped by social customs and beliefs. Not set in stone.
the same action may be ethically acceptable in one society but wrong in another
What is absolutism?
Belief that there are absolute standards against which ethical questions can be judged and that certain actions are right or wrong regardless
What are ethical influences?
- Regulations
- Ethical codes
- Legislation
- Social pressure
- corporate culture (way we do things)
What is profession?
an occupation, practice or vocation e.g., accounting, medical) that is characterised by the following;
- mastering a complex set of knowledge and skills
- gaining formal education and or practical experience
- going through a process of certification before being allowed to practice
- governed by respective body
- having ethical code
What are the fundamental principles of professional ethics?
Integrity Confidentiality Professional competance Objectivity Professional behaviour
What does corporate codes of ethics mean?
Core values that businesses will encourage their employees to adopt in order to instill a culture of ethical behaviour
What are the corporate codes of ethics?
(HOTTER) Honesty Openess Transparency Tryst Empowerment Respect
What are ethical threats?
A situation where a person or organisation is tempted not to follow their code of ethics
What are safeguards?
safeguards can be put in place to either eliminate the threat or reduce it to an acceptable level
If no safe guards are available what should be done?
Accountants should eliminate the interest or activities causing the threat or if this is not possible, decline or discontinue the engagement
What are the steps to ethical threats and dilemas?
Identify threats -> Evaluate significance to threats -> identify and apply safe guards
What is self interest?
Putting your own interest ahead of whats right
Not showing objectivity when reviewing own work
Not highlighting, your own errors
What is advocacy?
Acting for or against a position rather than being impartial
What is familiarity?
Allowing personal or business relationships to influence your judgement
What is intimidation
Allowing physical or other pressure to influence your activities
If safeguards are put in place what does this do?
Reduce and eliminate ethical threats to an acceptable level: 2 types
1) created by the professional, legislation or regulation
2) Within the work environment
How do you deal with conflicts?
1) Gather evidence
2) Analyse the evidence
3) Take action
