Transcript Ethics
Ethics Stanley E. Jenne, Ph.D., CPA, CFE 11/30/2016 1 Today’s Presentation Codes of Ethics Consider An three approaches to ethics approach to resolving ethical dilemmas Hypothetical scenarios 11/30/2016 2 Ethics – Hallmark of Professions Professions are held to a high standard Largely self-governing Expected to serve the public interest Auditing is considered a profession Many certifications are available Most sponsoring organizations have a code of ethics 11/30/2016 3 Auditor Ethical Expectations Integrity Objectivity Independent Professional mental attitude competence Confidentiality 11/30/2016 4 Three Approaches to Ethics Categorical Imperative Utilitarian Principle Generalization Argument 11/30/2016 5 Categorical Imperative Attributed to Immanuel Kant Moral requirements are based on rational standards All people should act in accordance with moral laws Moral laws do not consider the outcome of one’s actions http://plato.stanford.edu/entries/kant-moral/ 11/30/2016 6 Kant Quote “May you live your life as if the maxim of your actions were to become universal law.” http://www.brainyquote.com/quotes/authors/i/immanuel_kant.html 11/30/2016 7 Utilitarian Principle Decisions should consider the consequences The morally correct course of action is the one that results in the most good Utilitarianism maximizes the good of all concerned as opposed to self-maximizing egoism Everyone’s happiness or welfare counts http://plato.stanford.edu/entries/utilitarianism-history/ 11/30/2016 8 Generalization Argument Asks the questions What if everyone acted the way I wish to act? Would it produce the best outcome for society? Similar to Rule Utilitarianism 11/30/2016 9 Cases Robin Hood Steal from the rich and give to the poor. Motor Home Purchasing motor home in another state to avoid sales tax. 11/30/2016 10 Ethics and the Law The law provides a standard to judge right from wrong. Laws generally set minimal standards. Ethical considerations typically go beyond legal requirements. 11/30/2016 11 If only the choices were this clear! Ethics deals with moral duties. Ethical dilemmas exist when moral duties conflict. How do we resolve ethical choices? 11/30/2016 12 Sources of Guidance The law Employer policies & Code of Conduct Codes of Professional Ethics Other relevant professional codes Colleagues 11/30/2016 13 Approach From CFE Self-study 1. Determine the facts at issue. 2. Identify the alternative courses of action. 3. Evaluate the ethical problem. 4. Select a course of action. Ethical Theory for Fraud Examiners: ACFE.com 11/30/2016 14 Ethics Case #1 Skimming Not scheme the reason for your fraud investigation Jane skimmed receipts to make mortgage payments while husband was ill. Home Jane was saved, husband returned to work already had begun repaying the theft 11/30/2016 15 Ethics Case #2 Internal auditors under cover Assuming a false identity Fabricating cover stories 11/30/2016 16 AICPA Code of Ethics Revision Effective December 2014 Clarifies which rules apply to different types of engagements. Includes a conceptual framework 11/30/2016 17 Steps of the AICPA Conceptual Framework Step 1 Identify Threats Step 2 Evaluate Threats No Threats Proceed Threats not Significant Proceed Threats Not Acceptable Level…Stop http://aicpa.org/codeofconduct//ethics.aspx Step 3 Identify Safeguards New Existing Step 4 Evaluate Safeguards Threats at Acceptable Proceed Conclusion Ethical conduct is important in fraud examination Correct choices are not always clear Philosophers and professional organizations give guidance Don’t go it alone – seek help 11/30/2016 19