AllBestEssays.com - All Best Essays, Term Papers and Book Report
Search

Business and Accounting Ethics

Essay by   •  June 27, 2011  •  Essay  •  2,947 Words (12 Pages)  •  1,418 Views

Essay Preview: Business and Accounting Ethics

Report this essay
Page 1 of 12

BUSINESS AND ACCOUNTING ETHICS

INTRODUCTION

Ethical values provide the foundation on which a civilized society exists. Without the foundation, civilization collapses. On a personal level, everyone must answer the following question: What is my highest aspiration? The answer might be wealth, fame, knowledge, popularity, or integrity. But if integrity is secondary to any of the alternatives, it will be sacrificed in situations in which a choice must be made. Such situations will inevitably occur in every person's life.

A 1987 popular movie portrayed the unscrupulous dealings of people involved in securities trading based on nonpublic (inside) information. A key character, portrayed by actor Michael Douglas, in a dramatic scene says, "Greed is good!" The implication is that greed is an acceptable motivation and that business people will do anything to make money, including engage in unethical behavior. In reality, greed is unacceptable, and unethical behavior will destroy a firm's ability to make money. Although the goal of any firm should be to increase its owners' wealth, to do so requires the public's trust. In the long run, that trust depends on ethical business practices.

In the United States and other free societies, people often have the freedom to make their own decisions about the "right" thing to do. Before the American Republic, a common belief was that where there was liberty, anarchy would result because people would be unable to govern themselves. Yet Americans were free and well behaved. How could this be?

The great English writer, G.K. Chesterton, observed that America was the only nation in the world founded on a creed. He said that creed was set forth with dogmatic and even theological lucidity in the Declaration of Independence. Chesterton was referring to the second paragraph of America's founding document: "We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable rights, that among these are life, liberty and the pursuit of happiness."

America's founders established a nation based on widely held ethical values. In George Washington's farewell address to public life, September 17, 1796, he said that the survival of freedom on American soil would have nothing to do with him, and everything to do with the character of its people and the government they would elect:

Of all the dispositions and habits which lead to political prosperity, religion and morality are indispensable supports.... In vain would that man claim the tribute of patriotism who should labor to subvert these great pillars of human happiness, these firmest props of the duties of men and citizens. The mere politician, equally with the pious man, ought to respect and cherish them. A volume could not trace all the connections with private and public felicity. Let it simply be asked where is the security for property, for reputation, for life, if the sense of religious obligation desert the others, which are the instruments of investigation in Courts of Justice?... [R]eason and experienceboth forbid us to expect that national morality can prevail in exclusion of religious principle.

In addressing the Massachusetts militia in 1789, John Adams, the second U.S. President, said, "We have no government armed with power capable of contending with human passions unbridled by morality and religion. Our Constitution was made only for a moral and religious people. It is wholly inadequate to the government of any other."

Whether a person derives ethical values from religious principle, history and literature, or personal observation and experience, there are some basic ethical guidelines to which everyone can agree. In the July 1992 issue of Management Accounting, James Brackner, member of the IMA Committee on Ethics, stated:

The universities are responding with an increased emphasis on ethical training for decision making. For the most part, however, they ignore the teaching of values. For moral or ethical education to have meaning, there must be agreement on the values that are considered "right."

Michael Josephson, in Chapter 1 of Ethical Issues in the Practice of Accounting, 1992, described the "Ten Universal Values." They were as follows: honesty, integrity, promise-keeping, fidelity, fairness, caring, respect for others, responsible citizenship, pursuit of excellence, and accountability.

In considering the impact of ethical values on a society, Chuck Colson made the following observation:1

Societies are tragically vulnerable when the men and women who compose them lack character. A nation or a culture cannot endure for long unless it is undergirded by common values such as valor, public-spiritedness, respect for others and for the law; it cannot stand unless it is populated by people who will act on motives superior to their own immediate interest. Keeping the law, respecting human life and property, loving one's family, fighting to defend national goals, helping the unfortunate, paying taxes--all these depend on the individual virtues of courage, loyalty, charity, compassion, civility, and duty.

When ethical values are falling, people often turn to government for help. However, there is little government, especially in a free society, can do when its citizens are unethical. Echoing the sentiment of President John Adams, Aleksandr I. Solzhenitsyn, in his 1978 address at Harvard University, stated the following:

Destructive and irresponsible freedom has been granted boundless space. Society has turned out to have scarce defense against the abyss of human decadence, for example against the misuse of liberty for moral violence against young people, such as motion pictures full of pornography, crime, and horror. This is all considered to be part of freedom and to be counterbalanced, in theory, by the young people's right not to look and not to accept. Life organized legalistically has thus shown its inability to defend itself against the corrosion of evil.

THE PURPOSE OF ETHICS

The purpose of ethics in business is to direct business men and women to abide by a code of conduct that facilitates, if not encourages, public confidence in their products and services. In the accounting field, the AICPA maintains and enforces a code of professional conduct for public accountants. The Institute of Management Accountants (IMA) and the Institute of Internal Auditors (IIA) also maintain a code of ethics. Professional accounting organizations recognize the accounting profession's responsibility to

...

...

Download as:   txt (18.3 Kb)   pdf (197.6 Kb)   docx (17.4 Kb)  
Continue for 11 more pages »
Only available on AllBestEssays.com
Citation Generator

(2011, 06). Business and Accounting Ethics. AllBestEssays.com. Retrieved 06, 2011, from https://www.allbestessays.com/essay/Business-and-Accounting-Ethics/4763.html

"Business and Accounting Ethics" AllBestEssays.com. 06 2011. 2011. 06 2011 <https://www.allbestessays.com/essay/Business-and-Accounting-Ethics/4763.html>.

"Business and Accounting Ethics." AllBestEssays.com. AllBestEssays.com, 06 2011. Web. 06 2011. <https://www.allbestessays.com/essay/Business-and-Accounting-Ethics/4763.html>.

"Business and Accounting Ethics." AllBestEssays.com. 06, 2011. Accessed 06, 2011. https://www.allbestessays.com/essay/Business-and-Accounting-Ethics/4763.html.