Lecture 2

Question 1

What is goal of accounting?

What does accounting decisions involve? 5 steps

Answer 1

• make decisions about the information available to existing and potential investors so they can decide whether they want to invest in it or not.
• accounting decisions involve?
  1. Goal
  2. Identifying alternatives
  3. Evaluation
  4. Choice
  5. Action

Question 2

The conceptual framework list two factors that are necessary for high quality information
What is it?

Answer 2

1. Information must be RELEVANT. As it predicts and confirms.
2. Must be FAITHFULLY REPRESENTED as it reports economic phenomenon.

Question 3

What is ethics of duty?

What is ethics of virtue?

Answer 3

Ethics of duty = responsible make technical decisions

Ethics of virtue = responsible to identify and deal with moral issues that arise in decision making process.

Question 4

What is role of moral philosophy in accounting ethics?

What is 4 philosophical traditions? ( mention this before) in detail now

What does each tradition consider the decision maker to be

Answer 4

1. Introduces philosophical traditions to help the accountant to make her own ethical decisions

Philosophical traditions
1. Utalitarism :
- promotes hapiness
- “rightness” of choice relies in result
- everyone should be treated fairly
- consider a rule to help them in decision making process

2. Deontology :
   - based on core principle
   - “rightness” based on moral principle not the result of the decision.
3. Virtue of ethics:
   - focuses on quality of character
   - “rightness” is answered by question
4. Social contract theory
   - moral agents act as citenzen within specific type of society
   - society is formed through voluntary choices
   - “rightness” is based on explicit awareness of his social duties.

Each traditions considers the decision maker to be A MORAL AGENT - a person who decides how to act in a particular situation.
- moral agents find themselves in confusing situations.

Question 5

What are the resources moral agents have?

3 resources

Answer 5

1. Character traits
2. Virtues gained through experience
3. Resources external to indivual