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Discussion Questions:Do you think it is the same to act in your own self-interest as it is to act in a selfish way? 1. A common ethical dilemma used to distinguish between philosophical reasoning methods is the following. Imagine that you are standing on a footbridge spanning some trolley tracks. You see that a runaway […]

The following two statements about virtue were made by noted philosophers/writers: Discussion Questions 1. A common ethical dilemma used to distinguish between philosophical reasoning methods is the following. Imagine that you are standing on a footbridge spanning some trolley tracks. You see that a runaway trolley is threatening to kill five people. Standing next to

Application of Ethical Reasoning in Accounting In this section, we discuss the application of ethical reasoning in its entirety to a com- mon dilemma faced by internal accountants and auditors. The case deals with the classic example of when pressure is imposed on accountants by top management to ignore mate- rial misstatements in financial statements.

However, isn’t this situation one in which an exception to the rule should come into play for humanitarian reasons? Whenever we are confronted with a moral dilemma, we need to consider whether the action would respect the basic rights of each of the individuals involved. How would the action affect the well-being of those individuals?

Ethical Reasoning: Implications for Accounting If you are an egoist, you might conclude that it is in your best interests to go along with the firm’s position to support the client’s presumed interests. After all, you do not want to lose your job. An enlightened egoist would consider the interests of others, including the investors

Ethical Reasoning Method Bases for Making Ethical Judgments Teleology Deontology Justice Virtue Ethics Egoism Enlightened Egoism Utilitarianism Rights Theory   Ethical Judgments Defines “right” behavior by consequences for the decision maker Considers well-being of others within the scope of deciding on a course of action based on self-interest. Evaluates consequences of actions (harms and benefits)

Virtues and Ethical Obligations of CPAs Aristotle’s Virtues Ethical Standards for CPAs Trustworthiness, benevolence, altruism Integrity Honesty, integrity Truthfulness, non-deception Impartiality, open-mindedness Objectivity, independence Reliability, dependability, faithfulness Loyalty (confidentiality) Trustworthiness Due care (competence and prudence) min622IX_ch01_001-053.indd 21min622IX_ch01_001-053.indd 21 09/08/13 4:46 PM09/08/13 4:46 PM     22 Chapter 1 Ethical Reasoning: Implications for Accounting resolve ethical

Modern Moral Philosophies The ancient Greeks believed that reason and thought precede the choice of action and that we deliberate about things we can influence with our decisions. In making decisions, most people want to follow laws and rules. However, rules are not always clear, and laws may not cover every situation. Therefore, it is

Virtue, Character, and CPA Obligations Traits of character such as honesty, integrity, and trustworthiness enable a person to act with virtue and apply the moral point of view. Kurt Baier, a well-known moral philoso- pher, discusses the moral point of view as being one that emphasizes practical reason and min622IX_ch01_001-053.indd 20min622IX_ch01_001-053.indd 20 09/08/13 4:46 PM09/08/13

The Public Interest in Accounting Following the disclosure of numerous accounting scandals in the early 2000s at companies such as Enron and WorldCom, the accounting profession and professional bodies turned their attention to examining how to rebuild the public trust and confidence in financial reporting. Stuebs and Wilkinson point out that restoring the accounting profession’s