How does virtue theory apply to both the decision maker and the act under consideration by that party? Explain.
14. Distinguish between ethical rights and obligations from the perspective of accountants and auditors.
15. Assume in the DigitPrint case that the venture capitalists do not provide additional financing to the company, even though the accrued expense adjustments have not been made. The company hires an audit firm to conduct an audit of its financial statements to take to a local bank for a loan. The auditors become aware of the unrecorded $1 million in accrued expenses. Liza Doolittle pressures them to delay recording the expenses until after the loan is secured. The auditors do not know whether Henry Higgins is aware of all the facts. Identify the stakeholders in this case. What alternatives are available to the auditors? Use the AICPA Code of Professional Conduct and Josephson’s Six Pillars of Character to evaluate the ethics of the alternative courses of action.
36 Chapter 1 Ethical Reasoning: Implications for Accounting
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16. IFAC, the global organization for the accountancy profession dedicated to serving the pub- lic interest, issued IFAC Policy Position Paper #4, titled A Public Interest Framework for the Accountancy Profession, on November 4, 2010 . In that paper, IFAC identifies three criteria for the accounting profession serving the public interest: • Consideration of costs and benefits for society as a whole • Adherence to democratic principles and processes • Respect for cultural and ethical diversity
Review the policy statement and any changes since it was first issued and explain how these three criteria might enable us to assess whether or not (and the degree to which) a policy, action, process, or condition is in the public interest. 80
17. The 2011 National Business Ethics Survey, Workplace Ethics in Transition, issued by the Ethics Resource Center (ERC), reports the following results 81 : • The percentage of employees who witnessed misconduct at work fell to a new low of 45 per-
cent, compared to 49 percent in 2009 and well below the record high of 55 percent in 2007. • Those who reported bad behavior reached a record high of 65 percent, up from 64 percent in
2009 and the record low of 53 percent in 2005. • Retaliation against whistleblowers rose, with 22 percent who reported misconduct saying]\