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Seminar 3 Professional Ethics and Judgement Part 1 - Coggle Diagram

- - - - deals with consequences/outcomes of actions
        
        Generally, if benefits of a proposed actions outweigh the costs, then the decision is considered morally correct
        
        Most important theory of teleological ethics - Utilitarianism
        
        ethical decision making should maximise the greatest good for the greatest number.
        
        This involves an assessment of costs and benefits, not only in economic terms but also in terms of human costs and benefits. Therefore, it involves a value judgment and needs to consider all the stakeholders who will be affected by a decision. The outcomes are measured both in economic terms and in psychological terms, such as pain and happiness. Therefore, measuring and assigning a numeric value to the consequences of an action is often difficult
    - - based on duties and rights
        
        Duties are obligations and are actions that a person is expected to perform, while rights are entitlements and are actions that a person expects of others
        
        These duties and rights are set down in rules that must be followed regardless of the consequences. Hence, deontological ethics are also sometimes called non-consequential ethics
    - - concerned primarily with integrity, which is an essential characteristic of an auditor
        
        Virtue ethics focus on the person undertaking the action. Virtues are personal qualities that enable us to do what is ethically desirable, and generally include traits of character such as courage, fairness, honesty, integrity, loyalty, courtesy and fidelity. Virtue ethics emphasise what makes up a morally good person, but do not necessarily make it clearer what should be done to solve an ethical conflict
- - - - may serve several purposes. It may:
        
        make explicit those values that may be implicitly required
        
        indicate how members should act towards one another and permissible forms of advertising
        
        provide an objective basis for sanctions against people who violate the rules. Allows a member’s behaviour to be judged. An established code of ethics is a mechanism of self-regulation.
  - - - public interest is defined as the collective wellbeing of the community of people that the members serve
        
        Therefore, the auditing profession’s ‘public’ consists of clients, credit providers, governments, employers, employees, investors, the business and financial community and others who rely on the objectivity and integrity of the auditor. The public interest principle recognises that conflicts occur between the various stakeholder interests and that when such conflicts occur, the auditor’s primary responsibility is to the public interest, not to himself or herself or to the client
- - - - This perception is partly responsible for the credibility of the auditor's report
        
        Users will not derive any assurance from the auditor's work unless they believe the auditor is independent
  - - - factors that contribute to an independent of mind are integrity, objectivity and strength of character
  - - - created by the profession, legislation or regulation
        
        e.g. education, professional standards, monitoring and disciplinary processes, and inspections and reviews
      - within the work environment
        
        e.g. firm-wide safeguards, such as policies and procedures to implement and monitor independence and quality control, and engagement-specific safeguards, such as having a member who is not a member of the assurance team review the assurance work or rotating senior assurance team personnel