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Ethic Case

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The analysis will proceed in the perspective of utilitarianism. Bentham's theory of utilitarianism states that the highest principle of morality is to maximize the greatest good for the greatest number of people (Bentham 1988). He raises the view that human beings are all governed by "two sovereign masters", feelings of pleasure and pain. In addition, he illustrates that by utility it means the balance of pleasure over pain, happiness over suffering. Therefore, maximisation of the greatest good could be reached by maximising the overall pleasure over pain. In this case, Betty's exposure to personal risk could equate to personal pain, while the benefits of producing true and fair report to the public could be equivalent to pleasure of a community. Logically, the pleasure could be outweighed due to its satisfaction of the majority. What's more, according to act utilitarianism by Rawls (1955), the aim of action should concentrate on obtaining favourable consequence which means to satisfy the interests of majority. For Betty to make the right decision in this situation no strict application of accounting rules would benefit the using public, the client and her audit firm, meanwhile it only harms Betty's personal interest. According to utilitarianism theory mentioned above, the majority's interest is achieved and this may be considered to be the favourable result in this dilemma. Betty ought to be supported for following the company practice from the normative perspective of accounting ethics. Since strict application of accounting rules could be misleading to the using public and damaging to the company, resulting in loss of contracts and jobs, Betty should not insist her original thought only due to her personal interest. According to Kantian theory of deontological ethics, making ethical decisions should focus on the moral obligation and the act itself, irrespective of the consequences of the action (Armstrong, 1990). Moreover, decisions need to be made on the principle of reasoning, which is thought to act the same way in different contexts in a particular field regardless of the consequence of the action (McPhail and Walters, 2009). This is called by Kant as categorical imperative, which means every person would behave the same way in a specific situation and it is a universally feasible action (Ibid). For auditors, as the reason of accounting act, presenting true and fair financial report to the public is of moral worth and therefore the right thing to do (Warren et al. 2008). They are required by their duty to behave like that ignoring the possible consequence of losing audit qualification (Kant, 1785). In this case, not only Betty but also the senior partner, as well as other auditors would follow the same practice facing this dilemma. Therefore, it is morally ethical practice for Betty not to strictly apply the particular accounting rule.



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