Faculty of Commerce
Faculty of Commerce - Accounting & Finance Working Papers
University of Wollongong Year
Accounting Theory and Practice: the Ethical Dimension
University of Wollongong, michael gaﬃkin@uow.edu.au
This working paper was originally published as Gaﬃkin, M, Accounting theory and practice: the ethical dimension, Accounting Finance Working Paper 07/04, School of Accounting Finance, University of Wollongong, 2007. This paper is posted at Research Online. http://ro.uow.edu.au/accﬁnwp/2
University of Wollongong
School of Accounting & Finance
Accounting Theory and Practice: the Ethical Dimension
Working Papers Series
School of Accounting & Finance University of Wollongong Wollongong NSW 2522 Australia Tel +61 (2) 4221 3718 Fax +61 (2) 4221 4297 eMail firstname.lastname@example.org www.uow.edu.au/commerce/accy/
Accounting Theory and Practice: the Ethical Dimension Michael Gaffikin It has often been suggested by some that the expression business ethics is an oxymoron – it employs contradictory terms because business seeks to optimise or maximise gains from its operations while ethics implies a very different basis for business practices. However, although the more cynically minded would seriously subscribe to this view, there has been a very dramatic upturn in an interest in ethical considerations by business leaders and professional business organisations partly as a result of the demands of societies which have had to bear the cost of spectacular corporate collapses and the unscrupulous business activities of a minority of business practitioners. In fact the subject has become an industry with several books on it being published, several courses, seminars, workshops and lectures devoted to the subject, numerous models promulgated and an ever increasing number of comments and debates in the public media. All people have some inner understanding of what constitutes ethical behaviour but when it comes down to defining ethics this is found to be extremely problematic as it is shaped by personal, cultural, societal and professional values all of which are difficult to specify. Some people will stress the importance of the society’s interests others will stress the interests of the autonomous individual. These conflicting viewpoints have dominated discussion of ethics for a long time. Most are agreed that ethical belief systems emerge from a community – a social or cultural context or what Blackburn has called “the surrounding climate of ideas about how to live” (2001. p 1) Basic Moral Considerations When examining the issue of ethics there are some basic moral considerations on which to reflect. They involve questioning the extent to which the following affect attitudes to determining what constitutes moral behaviour and how this impacts on an understanding of ethics: 1 Religion – divine command theories 2 Conscience 3 Selfishness 4 Respect 5 Rights 6 Utilitarianism 7 Justice 8 Virtue Many people believe that ethical behaviour is shaped by moral principles laid down in religions – there is an authoritative code of instructions on how to behave. However, while this sounds well and good, history has demonstrated that in most religions the determination of theses principles has been subject to considerable debate and even has resulted in practices which seem, to an outside observer, to have little connection with
Accounting Theory & Practice: the Ethical Dimension, p 2
moral behaviour. For example, one of the commandments said to be at the base of Christianity is thou shalt not kill yet societies throughout history have rationalised this away in times of war, the burning of witches and capital punishment generally. Christianity of course is not alone in this! Hinduism is built around a caste system which subjects certain groups to what outsiders see as extreme forms of prejudice and disadvantage. Islam has a penal code with what seems to outsiders as...
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