Ethics and the Individual Flashcards
What influences our personal values?
- Religion and political values
- Social values (how we interact with others)
- Socialisation (family and peers)
- Aethetic values (what we consider beautiful)
All of these can change over time.
What is Moral Reasoning?
Moral reasoning is concerned with how individuals arrive at decisions as opposed to whether the decision itself is right or wrong.
One type of moral reasoning is Pigaet’s stages of cognitive development. What are they?
- Sensorimotor stage: Birth to the aquisition of language
- Pre-operational stage (2-7): Child can reason and grasp concept
- Concrete operational stage (7-11): Child can sort, identify and recognise logic
- Formal operational stage (from adolescence): person can use logic to make conclusions
What is Kohlberg’s model?
How is it structured?
Kohlbergs model explains the process of how moral reasoning is applied.
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Level 1: External rewards, punishment and self interest
- Lower plane: Will I be punished/rewarded for my actions?
- Higher plane: Accepting the behaviour of others if they support me
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Level 2: Conventional: the expectations of others
- Lower plane: Considering the expectations of family & friends
- Higher plane: Behaving in accordance with social and culturel norms
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Level 3: Post conventional: decisions based on what we believe to be rightwrong
- Lower plane: Behaviour reflects basic values in society
- Higher plane: Behaviour considers wider ethical principles such as justice
Steere explained ethical decisions through Moral DNA, what does it consist?
- Principle conscience
- decision comes from an individual’s notion of fairness
- derived from deontology
- Social conscience
- individual considers end results of actions
- dervied from teleology
- mostly affect decisions at work and in the community
- Compliance
- abiding by the rules which govern actions
- leads to consistent behaviours
- discourages thinking for ourselves
What’s the difference between an ethical dilemma and a conflict of interest?
- Ethical dilemma: situation with many possible courses of action - no outcome will be totally statisfactory
- Conflict of interest: e.g. we may have a personal interest in a client transaction. The decision positively affects one client but negatively affects another client
What are the sources of conflicts of interest?
- Self-interest: Individual has a financial interest in the transaction
- Self-view: Client reviews the work of others (e.g. audit) they should be independent of the transaction
- Familiarity: Personal/family relationship between the firm and client
- Advocacy: Firm is called upon to support a client
- Intimidation: Client threatens litigation against the firm
What ethical frameworks are there?
- Molyneaux
- Tucker
- American Accounting Association
- IFAC
What steps can firms take to resolve conflicts of interest?
- Create written policies on confidentiality, security & disclosure
- Implement disciplinary measures when breaches occur
- Disclose the conflict to the client asap
- Decline business if necessary
- Limit access to info
- Use confidentiality agreements
- Impose chinese walls/segregate people in areas where conflicts may arise
How steps should be taken to solve an ethical dilemma?
- Apply first principles: consider the various viewpoints (deontology etc.) and contrast the conclusions from each viewpoint
- Apply logic: start by considering basic logic and common sense with regards to the dilemma
- Apply a framework: choice of framework is arbitrary
- Make a decision
Define the steps in the American Accounting Association Framework
- What are the facts?
- What are the ethical issues?
- What are the norms, values and principles involved?
- What are the alternative courses of action?
- What are the consequences of each option?
- What is the best option?
- Decision.
