Lecture 28 (Ethical Issues)

Question 1

What may your personal ethics be affected by?

Answer 1

Family, culture, religion and peers.

Question 2

What are the two approaches a business can have to ethical standards?

Answer 2

Have a code against which performance can be measured.
OR
Deal with issues as they arise, therefore allowing flexibility.

Question 3

JUSTICE APPROACH

Answer 3

Justice and fairness are paramount. Principles should be laid down and followed without exception.

Question 4

CARE APPROACH

Answer 4

Equitable approach based on subjective ad hoc decisions based on an individual’s personal circumstances.

Question 5

What does research suggest about the difference of ethical approaches between men and women?

Answer 5

Men more justice

Women more care.

Question 6

What type of ethical decisions can an accountant face?

Answer 6

• Manipulating profits to affect:
• Tax payable
• Bonus figure
• Product of employer is potentially dangerous but expensive to fix so no action to be taken.
• Use of confidential information for personal gain.
• Gifts from/to clients/customers.

Question 7

What ethical assistance is there for businesses?

Answer 7

• Professional bodies produce codes and have help line to discuss ethical issues such as:
• Relationship with clients
• Type of work that can be offered
• Standards of behaviour expected
• Dealing with conflicts of interest

Question 8

IFAC

Answer 8

International Federation of Accounts

have an ethics section called the International Ethical Standards Board for Accountants.

Question 9

Why are ethics important to a business?

Answer 9

Important to businesses as they are accountable to society and a branch in ethical conduct can have serious implications for the future.