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Ethics in business & accounting (Meaning of ethics (Business ethics,…
Ethics in business & accounting
Meaning of ethics
Common practices & customs
Greek term = manners
Peter Singer (1985) What we ought to do
? morally good & bad, right or wrong
Consequentialist view :star:
Ethical judgements are universalisable
Go beyond own personal point of view.
Business ethics
Subject to laws
Contract law (Unit 7)
company law
Regulations of country
UK memorandum & articles of association
Code of conducts & corporate governance voluntary
CSR such as environment, public health and animal welfare + labour, customer, suppliers.
Ethically appropriate in society
Fairtrade = local sustainability
Need for ethics in accounting
PLC Manage & control by managers for shareholders
Conflict of interest = agency problem
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Stakeholders
Customers
Suppliers
Employees
Investors
Creditors
Complying with accounting principles & regulations to true & fair view to the organisation condition
Approaches to ethics in accounting
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Individuals have to resolve ethical dilemmas
Code of conducts within organisation
IESBA code of ethics
Business are regulatory by bodies such as CIMA
Should be public interest when accounting & auditing
Code of ethics
Integrity = straightforward and honest
Objectivity = professional judgements not influence by others
Professional competence & due care = professional knowledge and skills levels in practice, legislation & techniques. Competent
Confidentiality = respect it, do not disclose information to 3rd parties without specific authority. Not use personal advantage
Professional behaviour = relevant laws and regulations.
Conceptual framework
Recommended by IFAC
Systematic approach
Identifying & understanding facts
Identifying ethical issues
Identifying fundamental principles
Considering internal procedures
Evaluating alternative course of action
Choosing an appropriate course of action
Five threats
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self-interest
Self-review
Advocacy
Familiarity
Intimidation