Ethical Theory

Managerial Auditing Journal Emerald Article: On ethical theory in auditing Lutz Preuss Article information: To cite this document: Lutz Preuss, (1998),†On ethical theory in auditing†, Managerial Auditing Journal, Vol. 13 Iss: 9 pp. 500 508 Permanent link to this document: http://dx. doi. org/10. 1108/02686909810245910 Downloaded on: 25-11-2012 References: This document contains references to 47 other documents Citations: This document has been cited by 2 other documents To copy this document: [email  protected] com This document has been downloaded 2432 times since 2005. *Users who downloaded this Article also downloaded: * Gary Pflugrath, Nonna Martinov-Bennie, Liang Chen, (2007),†The impact of codes of ethics and experience on auditor judgments†, Managerial Auditing Journal, Vol. 22 Iss: 6 pp. 566 – 589 http://dx. doi. org/10. 1108/02686900710759389 Beverley Jackling, Barry J. Cooper, Philomena Leung, Steven Dellaportas, (2007),†Professional a ccounting bodies' perceptions of ethical issues, causes of ethical failure and ethics education†, Managerial Auditing Journal, Vol. 22 Iss: 9 pp. 928 – 944 http://dx. doi. org/10. 1108/02686900710829426 Douglas E.Ziegenfuss, Anusorn Singhapakdi, (1994),†Professional Values and the Ethical Perceptions of Internal Auditors†, Managerial Auditing Journal, Vol. 9 Iss: 1 pp. 34 – 44 http://dx. doi. org/10. 1108/02686909410050433 Access to this document was granted through an Emerald subscription provided by ASTON UNIVERSITY For Authors: If you would like to write for this, or any other Emerald publication, then please use our Emerald for Authors service. Information about how to choose which publication to write for and submission guidelines are available for all. Please visit www. emeraldinsight. om/authors for more information. About Emerald www. emeraldinsight. com With over forty years' experience, Emerald Group Publishing is a leading independent publi sher of global research with impact in business, society, public policy and education. In total, Emerald publishes over 275 journals and more than 130 book series, as well as an extensive range of online products and services. Emerald is both COUNTER 3 and TRANSFER compliant. The organization is a partner of the Committee on Publication Ethics (COPE) and also works with Portico and the LOCKSS initiative for digital archive preservation. Related content and download information correct at time of download. On ethical theory in auditing Lutz Preuss Lecturer, Heriot-Watt University, Edinburgh, UK This article discusses ways of giving support to auditors in addressing moral dilemmas. Codes of Ethics are very important in this context but are in the ? nal analysis insuf? cient devices, because their necessarily generalised form has to be translated into the speci? c situation and thus requires acceptance rather than merely adherence. Codes have to be complemented with developed ethical r easoning of accountants.Hence, individual ethical principles are discussed which have been applied to accounting in the recent literature, i. e. utilitarianism, deontology, virtue ethics and ethics of care. Unsurprisingly, none emerges as giving completely satisfactory solutions. Yet eclecticism can be avoided by using compound models, which combine individual principles to provide reasonably comprehensive cover of decision-making in a business context. As in any other profession, practitioners of accounting, be they public accountants, management accountants or internal auditors, may face moral dilemmas in their work.In mapping out the ? eld of potentially con? icting interests, the Institute of Chartered Accountants of Scotland (1997, p. i), the oldest professional body in the UK, stipulates: The primary duty of the Institute of Chartered Accountants of Scotland is to the public. This principle determines its status as a professional body . The ICAS (1997, p. vii) requires that: I n addition to the duties owed to the public and to his or her employer, a member of the Institute is bound to observe high standards of conduct, which may sometimes be contrary to his personal self-interest.The author would like to thank Professor Gerald Vinten, editor of Managerial Auditing Journal, and Stephen Morrow, Department of Accountancy and Finance, Heriot-Watt University, Edinburgh, for their helpful suggestions. Managerial Auditing Journal 13/9 [1998] 500–508  © MCB University Press [ISSN 0268-6902] The public accountant is the con? dential agent of the community at large, but the public does not (re)appoint auditors (for speci? c moral dilemmas facing external auditors, see Gunz and McCutcheon, 1991; Moizer 1995; Finn et al. , 1994).Management accountants and internal auditors are employees of the corporation; hence their employment position may collide with their professional values. They too have a responsibility to society – comparable to an engineerâ €™s concern for public safety – and are required by the Institute of Chartered Accountants in England and Wales to observe â€Å"the same standards of behaviour and competence as apply to all other members† (Statement 1. 220, quoted in Maurice, 1996, p. 184). Ethical dilemmas tend to be complex and only hazily de? nable.In accounting, moral agency often becomes a question of causation (Moizer, 1995, p. 425f. ), as the content of an audit report may not have an obvious link with a speci? c result: if an auditor quali? es a company’s accounts, has he actually caused an ensuing bankruptcy? Furthermore, the very subject matter of accounting is such that two equally objective accountants may reach different results. The most visible response by all professional accountancy bodies has been to set up codes of ethics, e. g. by the Institute of Internal Auditors in 1968.Their very existence sets limits for immoral behaviour and offers guidance in ambiguous situations . Studies of members of the Institute of Internal Auditors (Siegel et al. , 1995; Ziegenfuss and Singhapakdi, 1994) found that a clear majority do use the code of ethics in their work. It is seen primarily as an instrument for giving guidance in moral dilemmas (64 per cent) rather than a means to enhance the profession’s public perception (16 per cent). Research by Dittenhofer and colleagues offers an insightful longitudinal perspective nto changing moral beliefs of internal auditors in the light of the IIA Code of Ethics. In 1982 Dittenhofer and Klemm (1983) presented a random sample of IIA members with 20 vignettes, each describing morally contentious issues, and asked respondents to indicate their reaction, ranging from dismissal of the person to doing nothing because no ethical problem is perceived to exist. In 1994 Dittenhofer and Sennetti (1995) repeated the survey, again sampling IIA members. In many cases the authors found signi? cant changes, with IIA members having become more critical and supporting harsher action.So the proportion of respondents who claim they would dismiss an internal audit supervisor who engaged in insider dealing (situation 4) has risen from 50. 1 to 63. 0 per cent, with particularly large increases for trainees/journeymen (+70 per cent), in the category staff status, and insurance (+40 per cent) in the category employer’s activity . However, some cases – arguably less severe ones – have shown little change over the decade or even a decline. In any case, there were no signi? cant differences in terms of gender or age groups.Most astonishing, so Dittenhofer and Sennetti claim, was the fact that for each scenario almost the complete spectrum of attitudes was represented, which indicates that there is no consensus among internal auditors as to what is right or wrong. Codes of ethics are not sufficient to resolve moral dilemmas. For a start, violations of codes have persisted (Finn et al. , 1994; Loeb, 19 71; Pearson, 1987). A distinction has to be made between acceptance of a code and mere adherence to it (Loeb, 1971), which may stem from a strong organisational climate or a fear of being penalised.Furthermore, codes in their universalised form, cannot cover all eventualities. Analysing Dittenhofer and [ 500 ] Lutz Preuss On ethical theory in auditing Managerial Auditing Journal 13/9 [1998] 500–508 Klemm’s (1983) research, Vinten (1996, p. 56) found a two-fold problem: for some scenarios – clearly morally contentious ones – it was unclear exactly which article of the IIA Code applied and also what response the Code required. Swanda (1990) and Vyakarnam et al. , (1996) found that accountants isplay a tendency to revert to technical knowledge when facing ambiguous moral situations. Hence Mintz (1995) argues that accountants need both technical and moral expertise as well as the intention and ability to act against self-interest if morality requires doing so . Vinten (1990, p. 10) sees three types of codes: 1 a regulatory code, such as the Ten Commandments. It establishes a complete overlap between behaviour and code, which is furnished with such a compelling ethical imperative that further discussion is neither necessary nor asked for.It does, however, not recognise shades of grey . 2 an aspirational code, such as the wisdom literature in the Jewish Scriptures. It provides the standard a person should aspire to but recognises that full compliance may rarely be possible. Yet it provides little help in weighing up alternative courses of action. 3 an educational code: this holds rules and regulations to be unhelpful if not damaging and instead stresses the importance of the individual conscience in a professional situation.The unsatisfactory nature of codes of ethics, Vinten suggests, may stem from the predominance of the regulatory model. It emerges that de? ning ethics as â€Å"the rules of conduct recognised in the human life departme nt of the practice of professional accountancy† (Maurice, 1996, p. 9) is too limited. Codes of ethics have to be reinforced with moral development of accountants. Thus researchers have studied the status quo of moral development in the profession (Finn et al. , 1994 of certi? ed public accountants, Ziegenfuss et al. , 1994, of internal auditors and management accountants).Some authors have then discussed possible improvements of moral development within Lawrence Kohlberg’s framework for cognitive moral development (Lovell, 1995, 1997; Sweeney and Roberts, 1997). Others have sought to clarify how far individual ethical theories and principles are applicable to accounting dilemmas, although the discussion has often been limited to utilitarianism and deontology (Maurice, 1996; Moizer, 1995). Only over the last few years have alternative ethical theories been applied to accounting (Mintz, 1995; Francis, 1990; Oakes and Hammond, 1995; Reiter, 1996, 1997).The aim of this arti cle is to draw the discussion of these ethical theories and principles together into a comprehensive system, where the advantages and disadvantages of individual principles are highlighted. Following Hartman (1994) ethical theories shall be understood less as prescription for action than as tools for understanding complex situations. 1. Utilitarian ethics Teleological or consequentialist ethics judges the rightness or wrongness of an act by its consequences. The most elaborate consequentialist theory is that of utilitarianism, as propagated by Jeremy Bentham (1789/1962).In the de? nition of his disciple John Stuart Mill (1861/1962, p. 257): Utility, or the Greatest Happiness Principle holds that actions are right in proportion as they tend to promote happiness, wrong as they tend to produce the reverse of happiness. Utilitarianism is a strongly democratic theory as every individual is to be given as much consideration as anybody else is. It should be pointed out that Bentham saw thi s principle not as a watertight moral theory but as a tool for political decision making. Utilitarianism faces obvious practical problems in its moral arithmetic.Mill introduced a distinction between higher and lower pleasures, yet it is still far from clear how different pleasures of different intensities can be summed up, how a strong immediate desire compares with a life-long moderate one, etc. Agents may lack sufficient time to calculate all the consequences or may overestimate their own sufferings and underestimate somebody else’s happiness. This kind of criticism can partly be averted by applying the principle of utility not to single acts, act-utilitarianism, but to classes of acts, rule-utilitarianism.Under rule-utilitarianism an act is morally obligatory if it falls into a category of acts, which in their collectivity tend to produce more happiness than pain. It is no longer necessary to know all the implications of an action; one can rely on past evidence to get a f airly accurate account of an act’s potential consequences. Rule-utilitarianism is applied in a council recommendation by the Institute of Chartered Accountants of Scotland issued in 1971 (quoted in Moizer, 1995, p. 422), which: †¦ recommends that members †¦ hould not disclose past or intended civil wrongs, crimes †¦ or statutory offences unless they feel the damage to the public likely to arise from non-disclosure is of a very serious nature. [ 501 ] Lutz Preuss On ethical theory in auditing Managerial Auditing Journal 13/9 [1998] 500–508 Rule-utilitarianism, however, can be shown to collapse into act-utilitarianism, if one follows the rule â€Å"in situations of type x, do y or whatever else maximises utility† (Smart, 1967). Also, the difficulty or perhaps impossibility of a moral calculation has not been solved.Since utilitarianism is to consider all consequences of an action, this includes not only consequences for yet unborn generations but al so side effects the agent has not brought about actively, and these may well overshadow intended consequences. Intuitively, one would hesitate to blame a moral agent on this basis. Utilitarianism in accounting Utilitarianism has two advantages over alternative ethical theories for application in business. It links self-interest with moral behaviour, and a company is per de? nition self-interested. Secondly, the calculation of bene? and harm is similar to pro? t and loss accounting and hence more likely to ? nd acceptance with business practitioners than rival ethical theories. By default, utilitarianism is the most in? uential ethical theory in the business context. Most economic and ? nance concepts are implicitly or explicitly built on the assumption that individuals are interested in maximising short-term self-interest. A resulting intellectual parenthood of accounting theory and methods in utilitarianism becomes important in the debate over the neutrality of accounting informati on.Neutralists, like Solomons (1991), argue that it is not the task of accountancy to be an agent of change in society Accountants should merely convey . unbiased information, on which users can then base their decisions. Radical accountants, such as Tinker (1991), have questioned whether accounting information can actually be neutral. As accounting is embedded in social reality – it is neither inexplicably given nor a straight re? ection of social reality – and in social con? ict, its theory and methods inevitably favour one side of the con? ict over another. Thus Lovell (1997) ? ds it problematic that accounting concepts are often presented as neutral or even as morally correct, without pointing out their roots in utilitarian thought. There is evidence (Gray et al. , 1994; Lovell, 1997; Ponemon, 1992) that accounting and other means of organisational control compress moral reasoning within the lowest stages of Lawrence Kohlberg’s (1981) hierarchy of cognitive moral development. Kohlberg sees moral development progressing from an instrumental use of other persons via the acceptance of a social order to abstract principles which, if necessary, over- ride human laws.Where accounting control is assumed to work because people do not want their underperformance to be detected, a stage one motivation exists. Linking acceptable performance to ? nancial bonuses assumes a stage two motivation. At stage three a person performs as required because she wants to win or maintain the respect of colleagues, a stage four motivation shows in a belief that the law, either respective state laws or the organisational â€Å"laws†, are to be obeyed for their own sake (Lovell, 1997, p. 155). On the other hand, inasmuch as it prevents illegal or immoral practices, accounting control does have a moral quality . . Deontological ethics Deontological ethics focuses on duty or moral obligation, deon being the Greek word for duty There are various deontological con. cepts, such as â€Å"Do unto others as thou wouldst have them do unto you†, but the most rigorous version was developed by Immanuel Kant (1785/1898). He sees a sharp difference between self-interest and morality and proposes that an action only has moral value if it is performed from duty Kant proposes his . Categorical Imperative (1785/1898, p. 38). Act only on that maxim whereby thou canst at the same time will that it should become universal law.A different version of the Categorical Imperative reads (1785/1898, p. 47) . So act as to treat humanity, whether in thine own person or in that of any other, in every case as an end, never as means only . A maxim, a rational principle, which underlies an action, has to ful? l two criteria to become universally binding: ? rst it has to be shown that the maxim can be universalised without contradiction. Breaking promises if the disadvantages outweigh the bene? ts is not universalisable, because if it was nobody could rely on an ybody telling the truth anymore.Secondly, one has to show that a rational agent ought to will the maxim, i. e. that it actually creates conditions which are conducive to human life. Some actions, however, are universalisable but nonetheless seem wrong: a religious fundamentalist may reason it necessary to treat opponents in horrendously brutal ways and accept that he would be treated in the very same fashion if he were in the opposing camp. Other cases are not universalisable but do not seem morally wrong; universal contraception would bring humanity to an end but to most people it does not seem wrong in individual cases.Furthermore duties, imposed by [ 502 ] Lutz Preuss On ethical theory in auditing Managerial Auditing Journal 13/9 [1998] 500–508 several categorical imperatives, may clash; here the principle offers no further solution. On the other hand, Kantian morality links with popular conceptions of morality, e. g. that some actions simply are never permissible, whateve r the gain to individuals or society . The link between morality and the will of the agent allows us to praise people for their intentions even if the results fall short of expectations.A deontological approach is also the most important basis for criminal law. Deontology in accounting A deontological perspective underlies much of the self-regulation in accountancy, see for instance the explicit requirement by the Auditing Practices Committee in the US on qualifying a company’s accounts on a going concern basis (Moizer, 1995, p. 424): The auditor should not refrain from qualifying his report if it is otherwise appropriate, merely on the grounds that it may lead to the appointment of a receiver or liquidator. rong, even if it prevented a major disaster; witness the protracted debate on the evaluation of whistleblowing (Vinten, 1994), where accountancy bodies for a long time held that concerned employees may raise their concern to superiors but must not under any circumstances report to outsiders without authorisation. A strong deontological emphasis has the disadvantage that compliance with rules is taken to be moral. â€Å"One feels as an accountant†, said a participant in a study by Vyakarnam et al. (1996, p. 159) that â€Å"there are so many rules and regulations that anything outside is acceptable. A consensus to work just above the required minimum can lead to a situation where the minimum becomes expected and pressure increases to drop standards further. 3. Virtue ethics In contrast to the universal emphasis on moral duty in deontology and on general happiness in utilitarianism, Aristotle emphasises the importance of a person’s character for morality He suggests that the highest . human good is happiness, not in a crude material sense, but in a comprehensive meaning which carries connotations of ? ourishing and well-being.This highest good is closely linked to the function of a human being, which is to obey reason, as this is the mai n characteristic to set humans apart from other living beings. As a good ? autist plays the ? ute well or a good knife cuts well, Aristotle argues, so a good human is good at applying reason. Acting according to good reason is the distinguishing feature of virtuous behaviour. Reason helps to avoid both excess and de? ciency; so the virtue of courage shows the healthy mean between cowardice and rashness. To acquire this kind of virtue, people need practical wisdom, which can only be acquired by experience and habituation.Aristotle (1985, trans. Irwin) de? nes that â€Å"the virtue of a human being will †¦ be the state that makes a human being good and makes him perform his function well† (1106a20-24). Virtue ethics distinguishes between internal and external rewards, a distinction utilitarianism cannot make. Internal goods emerge from speci? c practices. They can only be experienced after a long engagement in the practice and their achievement bene? ts the whole of the co mmunity External goods are . not uniquely related to any practice; they are an individual’s property and are objects of competition.Thus, when Turner revolutionised the painting of sky and clouds, he created an internal good, irrespective of This clear, deontological view is necessitated by the public role of the accountancy profession which requires it to place above any other the public interest in being informed of the auditors doubts about the ability of the company to continue trading. There may be individual cases where an auditor, after considering the consequences of a quali? cation, would want to give the company a clean account; the more since a quali? cation is only a weak indication of business failure.The case of BCCI, Moizer (1995, p. 429) argues, has shown the danger in taking such an act-utilitarian approach. BCCI’s auditors Price Waterhouse considered qualifying the accounts in April 1990 but reasoned that auditors â€Å"owe a duty to shareholders to consider very carefully the possible impact of their report† because a quali? ed report would have more dramatic consequences for a bank than for an industrial concern. BCCI’s accounts were not quali? ed, and the bank was able to trade for another 14 months before it ? nally collapsed in July 1991. Moizer (1995, p. 30) concludes that the profession’s Code, which is based on either deontological or rule-utilitarian approaches, must be followed without regard to the particular situation; auditors ought not to consider the consequences of their actions, â€Å"since they have already been evaluated for the profession as a whole†. Deontological ethics is uncompromising by de? nition, but the complete disregard for circumstances can lead to morally dubious requirements. Few would follow the Kantian notion that telling a lie should always be [ 503 ] Lutz Preuss On ethical theory in auditing Managerial Auditing Journal 13/9 [1998] 500–508 he external goods, such as fame and income, he attained too (MacIntyre, 1985, p. 190f. ). Virtues and accounting Virtue ethics considers both intention and outcome, where duty-based ethics and utilitarianism only see one; it also links morality with self-interest. Principle-based ethics rarely ever gives unambiguous advice; it faces counter-examples, sometimes its conclusion runs counter to moral intuition. Virtue ethics, on the other hand, recognises that there are no easy answers and stresses the importance of practical wisdom in dealing with a moral dilemma.Mintz (1995, p. 259) argues that: virtues enable accounting professionals to resolve con? icting duties and loyalties in a morally appropriate way because they provide the inner strength of character to withstand pressures that might otherwise overwhelm and negatively in? uence professional judgment in a relationship of trust. He sees two virtues as having particular importance for the accounting profession, integrity, which enables the auditor to maintain objectivity under competitive pressure and trustworthiness, which ensures public con? ence in a professional service. The notion of virtuous behaviour in accounting is again linked to the discussion of the neutrality of accounting information. The neutralist perspective (Solomons, 1991) sees a clear distinction between the accountant as accountant and as citizen, and only in the latter capacity can the person legitimately express concern over social issues. Tinker (1991, p. 305), however, sees a social world where roles are inextricably intertwined and con? icting, and where the individual needs to develop a social selfconsciousness for transcending con? cts. The same accounting individual often appears on several sides in the same dispute, and without self-awareness about her role interdependencies, may ultimately contribute to her own repression and exploitation! wisdom, which differs from the routine application of rules, such as those by the professional bodies. Fur thermore, the use of computer-aided decision models does actually remove the possibility of developing virtuous behaviour. The main drawback of virtue ethics lies in its relativism (Hartman, 1994).Aristotle’s de? nition of virtue as a mean between two extremes makes sense to all communities, but only in a formal way The communities decide . what the two extremes are, and by this what the mean is. Hence, there is no neutral objective standpoint from which a good community can be distinguished from bad ones. Most humans belong to a number of communities, the community of their employer, their family, a sports club. There can be diverging de? nitions of community, which lead to diverging conceptions of the required virtues.A management accountant may take her employer to be her community and rate loyalty to it higher than loyalty to the general public. There are also practical problems with virtue ethics. Stressing the importance of character and practical wisdom does not alread y give concrete advice. The focus on character also neglects power distribution in organisations; it may actually disguise power structures and prevent change. The rich language of virtue ethics also lends itself for PR exercises. 4. Ethics of care The ethics of care has been developed as a feminist critique of the traditional moral philosophy on the basis of rights and rules.Traditional ethics is grounded in a view of others as potentially dangerous; thus rights become an important means to underscore claims against others and rules are needed to settle con? ict. The moral responsibility arising from both rights and rules is universal; it binds all moral agents equally (cf. the principle of utilitarianism or Kant’s Categorical Imperative) but makes the individual person replaceable without any loss to the ethical principle. Feminist authors have contended that the ethics of rights is essentially a male perspective and re? cts male dominance in western society and thought. Gi lligan (1982) argues that female morality does not centre on abstract principles but contextualises moral responses by drawing on personal experiences. It focuses on adequate responses to the needs and concerns of close individuals. Feminist philosophers see the self as being determined by its relationship with others Francis (1990) sees three main obstacles for more virtuous accounting. First, the relationship between internal and external rewards is slanted heavily towards the latter. The virtue integrity may be compromised by the bene? s of retaining a client. Secondly, the organisation of accounting into a small number of large private companies may hamper the development of virtuous professional norms. Under the prevailing competitive pressure the profession has demonstrated a lack of solidarity which has manifested itself particularly in auditor switching. Thirdly, virtues require the application of practical [ 504 ] Lutz Preuss On ethical theory in auditing Managerial Auditin g Journal 13/9 [1998] 500–508 (Noddings, 1984). Instead of bargaining between rational agents and rule-based settlement of con? ct, an ethics of care focuses on respect for others; maintaining the relationship is valued higher than scoring a victory or exercising one’s right. Ethics of care and accounting An ethics of care has been applied both directly to the accounting profession and in the concept of a caring organisation. Burton and Dunn (1996, p. 139) suggest that a company could be said to care if â€Å"it exhibits caring behaviour consistent with ? rm policy†. A company is here seen as a secondary caring agent, dependent on the primary caring actions of its organisational members. Liedtka (1996) ? ds that much of the present rhetoric about caring for customers or employees is just â€Å"care-talk† but suggests a caring organisation can be built. Apart from having caring employees, organisational support is crucial, because the organisation largely shapes the person’s role within it and must also provide the resources for caring. Employees would be seen as central, because they are the people who deal directly with customers and thus ultimately determine the success or failure of the business. Reiter (1996) suggests that caring is a valuable trait for employees, especially in the service sector.A caring ? rm could enjoy a competitive advantage in capability-driven markets, because it engenders trust and reduces transaction costs. Reiter (1997) claims that an ethics of care can foster a better understanding of the underlying principles of the accounting profession, such as auditor independence. This independence is to be achieved by a number of detailed rules which determine the relationship between auditor and client, yet true mental separation from the client would require the auditor to work in a social vacuum, and the rule-based approach can be seen as arbitrary The contextual perspective . f the ethics of care, Reit er suggests, provides the alternative metaphor of interdependence. This allows de? ning an appropriate balance of interests, on which users of accounting information could rely more than on the appearance of independence. Such thinking in? uenced the framework approach by the ICAEW (Maurice, 1996, p. 43). In accounting education, an ethics of care provides an important balance to rightsbased approaches. Reiter (1996, p. 48) discusses training material compiled by the American Accounting Association and Arthur Andersen and ? ds a â€Å"tendency of the AAA approach to frame con? icts as moral dilemmas where the choice is between resignation and hopeless compromise of integrity†. A win-win-situation, and above all a positive learning effect for accounting students, may be more likely to come from a care perspective, which â€Å"focusses on understanding others’ situations and points of view and determining what can be done to maintain appropriate relationships between th e self and others† (1996, p. 48). An ethics of care can also impact on accounting research (Oakes and Hammond, 1995), e. g. y challenging the possibility of a disinterested neutral scholar and thus asking how the researcher’s experiences and perspective in? uence the choice of research question. The interconnectedness of accountant and society raises the question of how current accounting practice affects the lives of people, especially the economically disenfranchised. This in turn challenges the assumptions regarding economic behaviour. The contextual approach of an ethics of care introduces a relativist element. This is not merely a practical problem for the accounting profession, in that accounting information may become less comprehensible to outside users.It indicates a deeper philosophical ? aw in the application of an ethics of care to economic life. Burton and Dunn (1996, p. 142) considered the dilemma of a company wanting to dispose of lead acid batteries. Sho wing care for those that are close – its local community – the ? rm decides to recycle the batteries rather than dumping them. The dangers involved in handling the batteries suggest they are better not handled by workers in the US, again the company displays care for close stakeholders. But would recycling in Taiwan be a moral alternative? Burton and Dunn attempt to rescue the model by introducing â€Å"A hybrid approach, ecommending that special attention be given to the least advantaged members of the moral community†, e. g. that the ? rm applies the same employee protection measures in Taiwan as it would in the US, even though this is not mandatory However, exempting the least . advantaged stakeholder shifts the burden onto the second least advantaged, until they turn into the least advantaged and get exempted, etc. The relativist problem leads to a further paradox: if others are all important in the de? nition of the self, then the self does not exist indepe ndently of these others.Wicks et al. , (1994, p. 483) de? ne a company as â€Å"constituted by the network of relationships which it is involved in†, yet as Burton and Dunn (1996) observed, this is close to the view of transaction cost economics. [ 505 ] Lutz Preuss On ethical theory in auditing Managerial Auditing Journal 13/9 [1998] 500–508 5. Compound models of ethics So far ethical theories have been considered in isolation from each other. Unsurprisingly in view of the complex nature of moral issues, none offers a completely satisfactory solution to moral problems in accounting.However, an unsystematic application of ethical principles carries the danger of eclecticism, of a pick-and-mix ethics, where an agent could select the ethical approach most suitable to furthering his own aims. A more secure theoretical foundation can be found in compound models. Brady (1985) suggested a â€Å"Janus-headed† model of ethics, further developed in Brady and Dunn (1995), which combines deontological and utilitarian requirements and proposes that an action should only be carried out if it violates neither.Kantian deontology and utilitarianism should be seen as complementing each other; Moizer (1995) found them to be the two dominant ethical theories in accounting rule making. A particular advantage of this compound model lies in its capability to capture both the universality of a situation, in the universalisability of Kantian deontology, and the particularity, via the utilitarian principle, for which, in order to calculate the greatest good of the greatest number, one must know the particulars of the situation (Brady nd Dunn, 1995, p. 394). Cavanagh et al. (1981) suggest a different version of a compound model, where an act would be unethical if it violated any of the following principles: (a) to optimise utility for all stakeholders involved; (b) to respect the rights of the individuals concerned; and (c) to be consistent with norms of justice. L ater work by the three authors (1995) enlarged this model by asking (d) whether the act arises from an impulse to care, to a utility-rightsjustice-care model.The decision-maker should also take account of clashes between principles, as well as of overwhelming or incapacitating factors, which would â€Å"justify overriding one of the ethical criteria† (1981, p. 370). Cavanagh et al. (1995, p. 399) argue that the advantage of their model lies in its practicality; it does not require business decisionmakers to handle abstract ethical principles but translates them into familiar norms, which then can be applied to concrete situations. Both models have had considerable in? uence in the business ethics debate; they have been applied in case studies and business ethics textbooks.The utility-rights-justice model was even chosen by Arthur Andersen for its business ethics programme. The two teams of authors have spent a great deal of energy arguing the practical applicability or captur ing distinction of their respective models. However, the main problem lies in the legitimation of selecting components. The very existence of competing models and the enlargement of one (the authors also considered the inclusion of a ? fth element of virtue) raises doubt whether any universally acceptable composition of a compound model can be achieved at all. Cavanagh et al. 1981) made important concessions when they allowed for mitigating circumstances for decision-makers who are not fully in control of the situation. Furthermore, decision-makers, who have â€Å"strong and reasonable doubts about the legitimacy of an ethical criterion, can legitimately be excused from adhering to that criterion† (1981, p. 371). None of the two teams offers advice on how to resolve clashes between principles. Cavanagh et al. , (1981, p. 370) note that there are â€Å"no well-de? ned rules† for such clashes, they â€Å"can be resolved only by making a considered judgment concerning wh ich of the con? cting criteria should be accorded the most weight in the given situation. † While the necessity of making such caveats is perfectly understood, nonetheless, a certain amount of arbitrariness may result in the application of compound models. On the other hand, both models secure a reasonably complete â€Å"coverage of the ethical terrain in business decision-making† (Brady and Dunn, 1995, p. 386). Eclecticism in the selection of compound models still guarantees a comprehensive range of ethical principles, which would not be the case for eclecticism in the selection of individual ethical principles.It should also be noted that the utility-rights-justice-care model allows for only one criterion to be set aside, having â€Å"reasonable doubts† about more than one would not longer qualify as legitimate. 6. Conclusion The discussion set out from a realisation that Codes of Ethics in accounting are an important but in the end insufficient device for addr essing moral con? ict, thus stressing the need for moral development of the person. Individual ethical theories and principles have been discussed of which none emerges as an all-round favourite for giving advice in moral dilemmas.Yet between the Scylla of offering no advice at all and the Charybdis of eclecticism in the selection of ethical principles, a safe course can be steered under the guidance of compound models. These are composed of a number of competing principles and the conciliation of these in the [ 506 ] Lutz Preuss On ethical theory in auditing Managerial Auditing Journal 13/9 [1998] 500–508 person of the decision-maker assures a moral quality to the decision. In contrast to a trialand-error approach, the decision-maker would at least have a reliable starting point for the search for ethical guidance.References Aristotle (1985), Nicomachean Ethics, translated by Terence Irwin, Hackett Publishing, Indianapolis, IN. Bentham, J. (1789/1962), â€Å"Introduction to the principles of morals and legislation†, in Warnock, M. (Ed. ) Utilitarianism, Fontana, London. Brady, F. N. (1985), â€Å"A Janus-headed model of ethical theory: Looking two ways at business/society issues†, Academy of Management Review, Vol. 10 No. 3, pp. 568-76. Brady, F. N. and Dunn, C. P. (1995), â€Å"Business metaethics: an analysis of two theories†, Business Ethics Quarterly, Vol. 5 No. 3, pp. 385-98. Burton, B.K. and Dunn, C. P. (1996), â€Å"Feminist ethics as moral grounding for stakeholder theory†, Business Ethics Quarterly, Vol. 6 No. 2, pp. 133-47 Cavanagh, G. F. , Moberg, D. J. and Velasquez, M. (1981), â€Å"The ethics of organizational politics†, Academy of Management Review, Vol. 6, pp. 363-74. Cavanagh, G. F. , Moberg, D. J. and Velasquez, M. (1995), â€Å"Making business ethics practical†, Business Ethics Quarterly, Vol. 5, pp. 399-418. Dittenhofer, M. and Klemm, R. J. (1983), Ethics and the Internal Auditor, Institute of Internal Auditors, Altamonte Springs, FL. Dittenhofer, M. nd Sennetti, J. (1995), â€Å"Ethics and the internal auditor, phase II. A comparison of the 1983 and 1994 surveys†, Managerial Auditing Journal, Vol. 10 No. 4, pp. 35-43. Finn, D. W. , Munter, P. , McCaslin, T. E. (1994), â€Å"Ethical perceptions of CPAs†, Managerial Auditing Journal, Vol. 9 No. 1, pp. 23-28. Francis, J. R. (1990), â€Å"After virtue? Accounting as a moral and discursive practice†, Accounting, Auditing & Accountability Journal, Vol. 3 No. 3, pp. 5-17. Gilligan, C. (1982), In a Different Voice, Harvard University Press, Cambridge, MA. Gray, R. , Bebbington, J. and McPhail, K. 1994), â€Å"Teaching ethics in accounting and the ethics of accounting teaching†, Accounting Education, Vol. 3 No. 1, pp. 51-75. Gunz, S. and McCutcheon, J. (1991), â€Å"Some unresolved ethical issues in auditing†, Journal of Business Ethics, Vol. 10, pp. 777-85. Hartman, E. (1994), â€Å"Virtues and rules: a response to Robert C. Solomon†, in Donaldson, T. and Freeman, R. E. (Eds), Business as a Humanity, Oxford University Press, New York, NY. The Institute of Chartered Accountants of Scotland (1997), Professional Conduct for Members of the Institute of Chartered Accountants of Scotland, ICAS, revised September 1997.Kant, I. (1785/1898), â€Å"Fundamental principles of the metaphysics of morals†, translated by Abbott, T. K. in Kant's Critiques of Practical Reason and Other Works on the Theory of Ethics, Longmans, Green and Co. , London (5th ed). Kohlberg, L. (1981), Essays on Moral Development, Vol. I, The Philosophy of Moral Development: Moral Stages and the Idea of Justice, Harper and Row, San Francisco, CA. Liedtka, J. M. (1996), â€Å"Feminist morality and competitive reality: a role for an ethic of care? †, Business Ethics Quarterly, Vol. 6 No. 2, pp. 179-200.Loeb, S. E. (1971), â€Å"A survey of ethical behaviour in the accounting profession†, Journal of Accounting Research, Vol. 9 No. 2, pp. 287-306. Lovell, A. (1995), â€Å"Moral reasoning and moral atmosphere in the domain of accountin†, Accounting, Auditing & Accountability Journal, Vol. 8 No. 3, pp. 60-80 Lovell, A. (1997), â€Å"Some thoughts on Kohlberg’s hierarchy of moral reasoning and its relevance for accounting theories†, Accounting Education, Vol. 6 No. 2, pp. 147-62. MacIntyre, A. (1985), After Virtue, 2nd ed. , Duckworth, London. Maurice, J. 1996), Accounting Ethics, Pitman, London. Mill, J. S. (1861/1962), Utilitarianism, Warnock, M. (Ed. ), Fontana, London. Mintz, S. M. (1995), â€Å"Virtue ethics and accounting education†, Issues in Accounting Education, Vol. 10 No. 2, pp. 247-67. Moizer, P. (1995), â€Å"An ethical approach to the choices faced by auditors†, Critical Perspectives on Accounting, Vol. 6 No. 5, pp. 415-31. Noddings, N. (1984), Caring: A Feminine Approach to Ethics and Moral Education, University of Ca lifornia Press, Berkeley, CA. Oakes, L. S. and Hammond, T. A. 1995), â€Å"Biting the epistemological hand: feminist perspectives on science and their implications for accounting research†, Critical Perspectives on Accounting, Vol. 6 No. 1, pp. 49-75. Pearson, M. A. (1987), â€Å"Auditor independence de? ciencies and alleged audit failures†, Journal of Business Ethics, Vol. 6, pp. 281-7. Ponemon, L. A. 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Management Method of Jack Ma

Management Method of Jack Ma Summary Jack Ma is a wonderful leader, he use his talent create Alibaba this successful company . This article is about Jack Ma and his management methods ,it is mainly focus on 4 parts : target ,system of values , mission and teamwork . Jack Ma use his special management skill create a new era . This article will show us how important management and leadership are , also tell the rules for manage company and employee . What can those skills bring us and how to use them in our daily life . Content page Summary2 Content page3 Introduction4 Target4 System of Values5Mission5 Teamwork6 Conclusion†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ 7 Reference8 Introduction Jack Ma is a legend , he is the leader of Alibaba , the founder of the world first E-commerce platform. Jack create a miracle , his c ompany use to be a small company with only 500000 yuan's capital , now it's market capitalization become more than 20 billion dollar . Jack know less about technology information , but he proficient in management , in his opinion , if you have enough management skill layman also can manage the expert .He believes , a good leader must be versatile ,in his understanding, the relationship between leader employee customer and owner is really important , good management method can help you to solve all these questions . In the following article I will introduce some Jack Ma's management skill and talk about the reason of his success . Target Nowadays there are always more choices for a us, but this may not be a good thing for a company , so the leader should have a clearly target , their work is not finding new opportunity but say no to useless things to them .Leader should find out the most correctly way for his company , make sure they will run on a normal track . Jack Ma use a story t o explain this point of view : if there are 10 rabbits , which one should you catch ? Too much choices will made you feel dazzle , the person who wants to catch all the rabbits must be the loser , cause they can not concentrate on one thing , and can make decision . So iust seize the opportunity which is best for you . Jack Ma believes ,A company who wants to be successful must concentrate on one target , too many goals will disrupt morale , employees not knowing which course to follow .Jack Ma raised that , ALibaba should be a longevity company , he proposed a goal for long and directional , he said this kind of goal can do good on the development of his company . Because of this kind of goal derives a series Alibaba ‘s related system and culture . Of course , the reason why Jack can notice the specific importance of a concentrated target is : When the company was found , Jack use to attract plenty of enterprise ‘s MBA to his company by big amount of funds , but 12 seni or manager except him was overseas staff , so the company did not run well because of their different management methods and goals.This gives him a lesson , so he knows that , staff who have dreams and willing to pay for the company is much better that a staff just used to work in a big company , the latter are technical-oriented , they are not stable and have their fixed pattern , if they work together , they must imped each other . Alibaba needs staff who have dreams for their team , they working for Alibaba ‘s dream , a long life company , in their first venture period they only use one month to turn their company from world ranking 8000 to 2000 .Now it become a world famous company , so we can know the importance of the target . System of Values Jack Ma used to talk about the importance of culture to a company in his lecture , just like company ‘s DNA , system of values is the nuclear of organizational cultural . System of values is a judgment of the importance of th ings , the system of values of a organization is a decision factors of development . What is the important things to Alibaba , Jack Ma summed up as six pats : customer first , integrity , dedication , change ,passion and teamwork .Jack Ma put customers in the most important part , staffs should become customer service to their instinct . Jack knew that , nowadays concept is very indistinct , what the customers need are genuineness service . The nuclear is made their product according to the market and listen to customers attentively . As a E-commerce platform , Alibaba use the world ‘s original creation B2B system , after exchange their idea to customers , they found the main problem that over 87% company worry about is integrity , so Alibaba first provide Trustpass service .Jack Ma ‘s opinion is provide good service so that we can have more customers . After B2B system , Alibaba then create B2C and C2C system and new trading platform like Zhifubao . Jack Ma considered t hat short term passion is worthless , only lasting passion can make money . But what is lasting passion ? Now Alibaba is ! 0 years old , the average age of their staff is 26 , Alibaba is still in childhood , after 10 years the company become 20 , their staffs are 36 years old , they are in prime of life and have boundless prospects .Jack leave more chance for the young people , cause they can last the passion of the company , Jack Ma ‘s management method tell us we should give more chance to young people , they are the fresh bloody for a company , they can always inject passion to their work and make good use of their competition . Mission Mission is a kind of identity , for business occupation is staff ‘s mission . Mission is the eternal power for staff . Jack's third management method is based on training staff ‘s mission , make staff work for them wholeheartedly .Looking at the world-renowned enterprises , their success is inseparable from the mission . As a E-c ommerce platform , Alibaba use the world ‘s original creation B2B system . After B2B system , Alibaba then create B2C and C2C system and new trading platform like Zhifubao and Aliwangwang . Jack found a college for cultivate the business ability of college students . They also provide training lessons for their own staff so that they can improve themselves . They departure from the fundamental , provide more chance for young businessman .Except for providing quality service , Alibaba also undertake social responsibilities initiativly . Jack Ma treat his own business career as a public property. During the period of WeiChuan earthquake in 2008 , Alibaba donated 5000000 , after that they established a special fund of 25 million . Because of this kind of mission and dedication for clients and customers , made Alibaba become a reliable company . Teamwork In Jack ‘s opinion , CEO means customer , employee and owner . He also think that the biggest fortune for a entrepreneur i s his employee , they are a team , a team provide chance for the hole company's success .One piece of log creates a small fire, adequate to warm you up, add just a few more pieces to blast an immense bonfire, large enough to warm up your entire circle of friends; needless to say that individuality counts, but team work dynamites. said Jack Ma . Businesses of today are largely concerned about their profits. They are taking every possible step to increase their turnover. The most important aspect that has a very substantial and positive impact on any business is teamwork. Effective teamwork is very significant for a company to use employee potential to the fullest.Teamwork is not only used in the corporate world to achieve targets on time, but also in the world of sports. If a team works towards a goal collectively, no one can stop it from reaching its goal. Due to the importance of teamwork in business, employers prefer to hire employees who are good team players . For becoming a goo d and effective team player in your company, you are required to have a particular set of skills and capabilities said Jack Ma You most importantly should have a good listening skill.This surely proves to be useful in listening to ideas, views, suggestions and conceptions of other employees or subordinates. You should be able to discuss the ideas and strategies suggested by your colleagues. Encourage the participation of every member in the team for a collective effort to achieve a goal. You also need to be able to share knowledge and understanding among the team members. A not to be missed skill is to give respect to others. If you want to be a good team player, you should learn to respect people and their ideas.These are just a few essentials that are required for becoming a good team member. Why is Teamwork Important in Business? Jack Ma Said there are several reasons Achieving Goals It is a widely understood concept, that united we stand and divided we fall. Same is in the case of a team in a business. Collective team activities are very important if the company or a process wants to reach its goal. There are some tasks that cannot be done individually, but can be easily accomplished by working in a team. Increasing Individual LearningIn simple terms, a team is a group of people who have come together for achieving a common objective. Therefore, in a group of people, there are many intelligent minds and brains working. When team members work together as a team, they can learn the skills and capabilities of each other and advance their knowledge. This certainly can be beneficial in your professional as well as personal life. Resolving Conflicts There are many types of conflicts that may arise in the company, which may in turn have an adverse effect on the collective output.In order to resolve business conflicts; the knowledge, understanding and expertise can be used efficiently for determining solutions to the problems. This significantly helps the business to grow. Good Communication Communication is an inevitably important factor in teamwork. When employees work in a team, they are able to pass on their ideas clearly. This rules out the possibilities of miscommunication due to complex hierarchy in the company. And due to ideas and concepts passed clearly, there is no scope for misunderstanding.Generating New Business Improvement Ideas If a manager encourages team members to participate in collective decision making, he will be able to reach a good strategy by considering views and suggestions from all members. The business can also think of incorporating ideas suggested by the team members. Employee participation in the management is a very effective tool in meliorating business strategies. Those in the team leadership should conduct team building activities for letting employees know each other better, and work in a team effectively.Conclusion Jack use his special management method create a new era for both him and his company . Al ibaba now the world famous company bring us lots of successful experience that worth to learn . A successful leader should know how to manage his company , good management method can bring us not only profit but also plenty of potential wealth . Reference PuZhu 2008 10-01 Jack Ma Talks about Management HaiTian publishing house Teamwork(2010),baidu,[online],availablefrom http://www. buzzle. com/articles/why-is-teamwork-important. tml Jack,Ma'sManagement,(2008)xinlang,,availablefrom http://ilove07ad. blog. 163. com/blog/static/1272196572009931391948/ Leadership or Alibaba ,(2010),xinlang,available from http://blog. sina. com. cn/s/blog_4c6c39790100096a. html Jack Ma talk about Management (2008),xinlang,available from http://ishare. iask. sina. com. cn/f/21979664. html Leadership challenges (2009),baidu available from http://www. linkedin. com/answers/international/internationalization-localization/INT_INZ/56289-8296586

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People, Profit and Price Essay Example | Topics and Well Written Essays - 1500 words

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Outpatient civil commitment Essay Example | Topics and Well Written Essays - 500 words

Outpatient civil commitment - Essay Example This paper will focus on involuntary civil commitment. Outpatient civil commitment raises ethical and legal issues for the mental health practitioner. Ethical principles require that the decision to commit a patient requires that the clinician balance factors favoring commitment. Such factors include the patient’s welfare and safety, treatment to relieve pain, and the welfare and safety of others. Factors opposing commitment, for instance, individual liberty, patient privacy and the uncertainty of predicting future harm should also be considered by the mental health officer (Schopp, 2003). Ethical principles state that mental health officers who manage suicidal patients need to know the standards and procedures of civil commitment, whether inpatient or outpatient. In cases where commitment laws are strict and commitment is not easy to obtain, other management options must be pursued to obtain adequate treatment for a patient and to reduce the patient’s danger of experiencing more suffering (Schopp, 2003). Mental health officers are bound to be responsible for wrong decisions made. Whenever a clinician is in doubt, he or she should seek judicial review about the commutability of a potentially dangerous action towards the patient. The society defines the role of the clinicians in terms of professional responsibilities to patients. The clinician’s first duty is to do no harm to the patients. They can avoid harming patients by showing respect for their autonomy. Respect of autonomy may be manifested when the patient is allowed to make his/her own decision whether to reject or accept medical care that has been recommended by a medical officer. Acting without the patient’s approval is unethical. Clinicians are also bound by their professional obligations to help patients; doctors are required to provide patients with services that are geared towards benefiting them (Schopp, 2003). On the contrary, there are

Why should Donuts be banned Research Paper Example | Topics and Well Written Essays - 500 words

Why should Donuts be banned - Research Paper Example However, their taste is not enough to keep the supporters of the ban quiet. They say that donuts should be banned. They should disappear from the bakeries. They should not be present in bakeries that are located outside the hospitals because patients must be stopped from consuming the unhealthy food. For example, the Capital Health banned donuts in bakeries outside hospitals in Tim Hortons. The idea behind was to enable the staff of the hospital and patients to make healthier choices when it came to their eating habits. In 2009, deep fryers were also banned in the hospitals’ cafeterias for the same reasons. Obese people are also at a chance of catching more obesity if they will continue to eat donuts. Also, since kids are so much attracted to this round delight, they consume a lot of them which fills their stomachs with empty calories not providing them sufficient energy and nutrients. This also makes them obese if they do not consume donuts in balance. So, the whole concept r evolves around promoting a healthier lifestyle where people are at least risk of catching diseases associated with sugary food. On the other hand, the opponents of donut ban also have to say something to save some delight for their taste buds. They say that banning something to eat is of no sense. They state that alcohol is also banned for under-eighteen people but this only increases the fantasy. Banning donuts will also increase the demand for them. According to them, a sensible step is to discourage people from eating them. People should be made familiar with the healthier choices they can make. Patients should be taught the drawbacks of eating donuts so that they stop buying them. Patients always know what they have to eat. If they go for donuts, it is their choice. People opposing the ban say that donuts are not the only sugary substance in the market that needs a ban then. The need is to create awareness rather than making eatables disappear