Professional Ethics Exam 1 Verified 100% Correct!

Integrity fundamental trait of character that enables a CPA to withstand client and competitive pressures that might otherwise lead to the subordination of judgement -person will do what is right, they act on principle-a conviction that there is a right way to act when faced with an ethical dilemma Integrity -acts with truthfulness, courage, sincerity, and honesty -have to have the courage to stand by your principles even in the face of pressure to bow to the demands of others Principle a conviction that there is a right way to act when faced with an ethical dilemma Ethics -Accepted standards of behavior -Practices of those in a profession -Laws -Code of Conduct -Expectations of society -Discerning right from wrong behavior -The living out of a religious faith Ethics derived from Greek word ethikos (character), deals with concepts of right & wrong; standards of how people ought to act. Morals derived from Latin word moralis, deals with manners, morals, character. Values are basic & fundamental beliefs that guide or motivate attitudes or actions -concerned with how a person behaves in certain situations and is predicated on personal beliefs that may or may not be ethical, whereas ethics is concerned with how a moral person should behave to act in an ethical manner Stakeholders effects of actions on others A person of goodwill honors and respects the rules and laws and is willing to go beyond them when circumstances warrant Ethical Relativism the philosophical view that what is right or wrong and good or bad is not absolute but variable and relative, depending on the person, circumstances, or social situation -holds that morality is relative to the norms of one's culture -If correct, there can be no common framework to resolve any moral disputes between different societies -Societies may differ in their application of fundamental moral principles but agree on the principles. Situation ethics a term first coined in 1966 by an Episcopalian priest, Joseph Fletcher, is a body of ethical thought that take normative principles-like the virtues, natural law, and Kant's categorical imperative that relies on the universality of actions-and generalizes them so that an agent can "make sense" out of one's experience when confronting ethical dilemmas -Theory that recognizes the existence of certain principles but questions whether they should be strictly applied as rules or used as guidelines Problems: it can be used to rationalize actions such as cheating & the Penn State scandal It can lead to a focus on ones own self-interest Geert Hofstede conducted one of the most comprehensive studies of how values in the workplace are influenced by culture 1. Power Distance 2. Individualism 3. Masculinity 4. Uncertainty Avoidance 5. Long-term Orientation five cultural dimensions that can be used to describe general similarities and differences in cultures around the world Long-term orientation initially called Confucian dynamism Individualism focuses on the degree that the society reinforces individual or collective achievement and interpersonal relationships -people are supposed to look after themselves and their direct family, while in collectivists societies, people belong to "in-groups" that take care of them in exchange for loyalty Uncertainty Avoidance cultural value that has important implications for workplace behavior, as it describes the tolerance for uncertainty and ambiguity within society -such society is likely to institute laws, rules, regulations, and controls to reduce the amount of uncertainty Power Distance foucses on the degree of equality between people in the country's society -high level indicates inequalities of wealth and power have been allowed to grow within society Long term orientation -high scores reflect the values of long-term commitment and respect for tradition, as opposed to low scores in countries, such as the United Kingdom and US, where change can occur more rapidly -time can often be a stumbling block for western-cultured organizations entering the China market -length of time it takes to get business deals done in China can be two or three times that in the West Norms -Ethical decision-making entails following certain well established norms of behavior -Does not describe the way people do act -Deals with the way people should act -Prescriptive (normative) not descriptive Values -Basic beliefs that guide or motivate attitudes or actions -Values of a profession (i.e. Accounting) are embedded in its codes of ethics -"Golden Rule" prescribes that we should treat others the way we want to be treated The Law -Existence of specific laws prohibiting certain behaviors will not stop a person who is unethical from violating those laws -create a minimum set of standards that ethical people usually go beyond (i.e. ethics often follows spirit rather than the letter of law The Gray Area -What to do when facts unclear & legal issues uncertain This is when a process to evaluate an ethical situation becomes extremely important: -Be willing to take action not in ones best interests (self-interest). -Look beyond self-interest & consider all perspectives involved. -Decide on a course of action that is more important than achieving the immediate end goal Virtues attitudes, dispositions, or character traits that enable us to be and to act in ways that develop this potential 1. Trustworthiness 2. Respect 3. Responsibility 4. Fairness 5. Caring 6. Citizenship Josephson Institute of Ethics Six Pillars of Character: Trustworthiness being honest, acting with integrity, being reliable, & exercising loyalty in dealing with others 1. Honesty 2. Integrity 3. Reliability 4. Loyalty 4 traits of trustworthiness: Honesty most basic ethical value & means that we should express the truth as we know it & without deception Integrity strength & courage of ones convictions Reliability following through with ones promises/commitments Loyalty not violating confidence placed in us Respect treating every individual with dignity. The golden rule encompasses respect for others through notions such as civility, courtesy, decency, dignity, autonomy, tolerance & acceptance Responsibility the ability to reflect on alternative courses of action, persevere & carry out moral action diligently Fairness treating others equally, impartially, & openly. Michael Josephson points out, "fairness implies adherence to a balanced standard of justice without relevance to one's own feelings or inclinations." Caring The essence is empathy. Empathy is the ability to understand, be sensitive to, & care about the feelings of others. Caring & empathy support each other & enable a person to put herself in the position of another. This is essential to ethical decision making Citizenship Josephson notes that "citizenship includes civic virtues & duties that prescribe how we ought to behave as part of a community." An important part of good citizenship is to obey the laws, be informed of the issues, volunteer in your community, & vote in elections Reputation overall quality or character in the opinion of the public towards a person or group or organization. It is an important factor in many professional fields, including accounting Accounting & the Public Interest -Honoring public trust -Acting with integrity in performance of professional services -Being independent of clients -Making decisions objectively -Exercising due care in the performance of services Teleology an act is considered morally right or acceptable if it produces some desired result such as pleasure, the realization of self-interest, fame, utility, wealth, and so on. -assess the moral worth of behavior by looking at its consequences, and thus moral philosophers often refer to these theories as consequentialism 1. Egoism 2. Enlightened Egoism 3. Act Utilitarianism 4. Rule Utilitarianism 4 ethical judgments of teleology Egoism defines right or acceptable behavior in terms of its consequences for the individual Egoism problems with implementation fails to consider interests or those affected by the decision Egoists believe that they should make decisions that maximize their own self-interest, which is defined differently by each individual laissez-faire economic system enables the selfish pursu