DO NOT TYPE
Cover page image ©2010 PhotoDisc/Getty Images
Copyright © 2010 by John Wiley & Sons, Inc.
All rights reserved.
No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning or otherwise, except as permitted under Sections 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, website www.copyright.com. Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 070305774, (201)748-6011, fax (201)748-6008, website http://www.wiley.com/go/permissions. To order books or for customer service, please call 1(800)-CALL-WILEY (225-5945). Printed in the United States of America.
After studying this module you should be able to:
Understand the importance of ethics
Know the history of ethics in accounting
Incorporate ethics into your decision process
Know ethical standards for accounting professionals
Understand ethical implications of the U.S. transition to IFRS Appreciate lessons learned from recent business scandals
SECTION 1 — THE IMPORTANCE OF ETHICS
Ethics is an important part of your accounting education and it will play an increasingly important role in all aspects of your professional life. This module is intended to give you an overview of the study of ethics. It is a
starting point for the discussion of ethics that
will continue throughout all of your accounting studies. We will begin with a definition of ethics and then review some ethical theories that provide a framework for developing ethical standards for accounting students and
professionals. Finally, we will discuss why ethics is important to you as you prepare for a career in accounting.
DEFINITION OF ETHICS
What exactly is ethics? According to Webster’s Dictionary ethics is “a discipline dealing with good and evil and moral duty, and with moral principles and practice.” Accounting ethics basically involves applying moral principles to accounting and business decisions. Business ethics is a more general form of applied ethics that relates moral principles to business situations. Business ethics examines behavior toward the outside world considering ethical principles and business codes of ethics.
Ethical Decisions in Accounting | 1
Simply put, ethics is doing the right thing. It is not easy to define ethics because ethics can be different for different people. You have your own personal values and these values are very important in the decisions you make. When you are in business you will be required to follow codes of conduct that are established by your company and by any professional associations that you belong to. Following the ethical standards of these organizations is important, but you should always bring your own personal values into your business model.
Philosophers have developed many theories to provide a framework for making ethical business decisions. These theories provide a point of reference for developing codes of conduct for companies and professional associations. Most ethical codes in business are based on the following moral theories: Rights theory. The moral choice is the choice that best protects and respects the moral rights of those involved with a decision. This theory suggests that humans have a dignity that is based on their human nature and their ability to freely choose what they do with their lives. Therefore they have a right to be treated as ends and not merely as means to other...
Please join StudyMode to read the full document