Transcript Ethics in Accounting

Ethics in Accounting
Dr. Bailey, ACCT 7310
7/20/2015
Agenda
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What are ethics?
Ethical considerations
Professional codes of ethics
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Institute of Management Accountants (p. 16)
Ethics Defined
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What are ethics?
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Imply a connection with actions
Concern what’s “good” or “right” to do
Two philosophical approaches
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Duty-based
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Consequences or outcome
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Absolute laws (axioms)
Utilitarianism (Teleological; effects)
Ethical Considerations
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Decision making - factors
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Legal
Profitable
Ethical
Ethical Considerations
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Decision making - trade off
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right versus wrong
right versus right
costs, benefits
4-Component Model
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What leads to ethical behavior? James
Rest proposed a 4-component model:
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Moral sensitivity to interpret situation
Moral judgment to decide what’s best
Moral motivation or degree of commitment
Moral character or courage to overcome
temptation, etc.
Professional Ethics
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Accountants have traditionally ranked high in
public opinion surveys of the ethics exhibited
by members of different professions.
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The Accounting Profession
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Accounting profession is changing
 from information processor to consultant
 Competitive advantage- INTEGRITY
AICPA Code of Professional Conduct
IMA Statement of Ethical Professional Practice [visit website]
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The Institute of Management Accountants (IMA) is the
largest association of management accountants in the
United States.
It provides a program leading to the Certified Management
Accountant (CMA) certificate.
Is Written Code “Good”?
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What message does it send?
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Is it sufficient?
Compare to rules vs. principles in GAAP
Who originated the specific code?
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Motive?
Enforceability?
Summary
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Ethics are internalized moral
principles
Increasing importance in business
IMA Code of Ethics
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One basis
Guides CMAs, other IMA members
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Provides a basis to deal w/ conflicts