Ethics and Code
ETHICS
Introduction
The behaviour of the practicing management accountant is prescribed and regulated by the management accountant 's personal code of ethics, the code of ethics of the employer, societal norms, and the law. In addition members of the Society are regulated by the Society 's code of ethics. As more organizations adopt codes of ethics, management accountants will increasingly be asked to design systems to control, evaluate, interpret or apply ethical judgement. The following develops the basis for forming ethical judgements. The management accountant fulfils four broad roles concerning ethics: 1. to ensure that management has developed and installed a comprehensive and internally controlled code of ethics. 2. to verify that the code of ethics and its controls are comprehensive and that everyone in the organization understands and complies with it. 3. to report to management any deviation from the code of ethics and its control systems. The Board of Directors may ultimately have to address any failures in the code or its controls. 4. to act in accordance with the code of ethics in making personal decisions.
What are Ethics and Morals?
Ethics are the rules people use to define and regulate moral behaviour. Morals distinguish right from wrong. Descriptive ethics are codes of ethics as actually practiced. Descriptive ethics provide no value judgements. Normative ethics, or moral reasoning, develops statements about whether a practiced ethical system is good or bad and suggests how ethical dilemmas, which are conflicts between individual systems of ethics ought to be resolved. Metaethics questions the meaning and universality of ethical statements. There is wide agreement that there is no basis for making universal normative ethical statements. A popular, but not universal, view is that ethics are the principles that people would agree should constrain inter-personal behaviour if they understood that these principles would be used to regulate all
Introduction
The behaviour of the practicing management accountant is prescribed and regulated by the management accountant 's personal code of ethics, the code of ethics of the employer, societal norms, and the law. In addition members of the Society are regulated by the Society 's code of ethics. As more organizations adopt codes of ethics, management accountants will increasingly be asked to design systems to control, evaluate, interpret or apply ethical judgement. The following develops the basis for forming ethical judgements. The management accountant fulfils four broad roles concerning ethics: 1. to ensure that management has developed and installed a comprehensive and internally controlled code of ethics. 2. to verify that the code of ethics and its controls are comprehensive and that everyone in the organization understands and complies with it. 3. to report to management any deviation from the code of ethics and its control systems. The Board of Directors may ultimately have to address any failures in the code or its controls. 4. to act in accordance with the code of ethics in making personal decisions.
What are Ethics and Morals?
Ethics are the rules people use to define and regulate moral behaviour. Morals distinguish right from wrong. Descriptive ethics are codes of ethics as actually practiced. Descriptive ethics provide no value judgements. Normative ethics, or moral reasoning, develops statements about whether a practiced ethical system is good or bad and suggests how ethical dilemmas, which are conflicts between individual systems of ethics ought to be resolved. Metaethics questions the meaning and universality of ethical statements. There is wide agreement that there is no basis for making universal normative ethical statements. A popular, but not universal, view is that ethics are the principles that people would agree should constrain inter-personal behaviour if they understood that these principles would be used to regulate all
References: Texts Bird, Frederick, Jeffrey Gandz, and James Waters, Good Management: Business Ethics in Action, Prentice-Hall, 1991. Blanchard, Kenneth and Norman Vincent Peale, The Power of Ethical Management, William Morrow and Company Inc., 1988. Merz, C. Mike and David F. Groebner, Toward a Code of Ethics, National Association of Accountants, 1981. Rawls, John, A Theory of Justice, 1971. Articles Andrews, Kenneth R., "Ethics in Practice", Harvard Business Review, September October 1989. Nielsen, Richard P., "Alternative Managerial Responses to Ethical Dilemmas," November Planning Review, 1985. Robin, Donald, Michael Giallourakis, Fred R. David, and Thomas E. Moritz, "A Different Look at Codes of Ethics," Business Horizons, January - February 1989. 18