Introtoaccountingethics中山大学商业伦理

1、精选文档Topic 7: Introduction to Accounting Ethics1. Utilitarian ethicsTeleological 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 definit

2、ion 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 individu

3、al is to be given as much consideration as anybody else is. It should be pointed out that Bentham saw this 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 bet

4、ween 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 ow

5、n sufferings and underestimate somebody elses 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 ca

6、tegory 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 fairly accurate account of an acts potential consequences.Rule-utilitarianism is applied in a council reco

7、mmendation by the Institute of Chartered Accountants of Scotland issued in 1971 (quoted in Moizer, 1995, p. 422), which: recommends that members . should not disclose past or intended civil wrongs, crimes . or statutory offences unless they feel the damage to the public likely to arise from non-disc

8、losure is of a very serious nature.Rule-utilitarianism, however, can be shown to collapse into act-utilitarianism, if one follows the rule “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 bee

9、n solved. Since utilitarianism is to consider all consequences of an action, this includes not only consequences for yet unborn generations but also side effects the agent has not brought about actively, and these may well overshadow intended consequences. Intuitively, one would hesitate to blame a

10、moral agent on this basis.Utilitarianism in accountingUtilitarianism has two advantages over alternative ethical theories for application in business. It links self-interest with moral behaviour, and a company is per definition self-interested. Secondly, the calculation of benefit and harm is simila

11、r to profit and loss accounting and hence more likely to find acceptance with business practitioners than rival ethical theories. By default, utilitarianism is the most influential ethical theory in the business context.Most economic and finance concepts are implicitly or explicitly built on the ass

12、umption that individuals are interested in maximizing 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 information. Neutralists, like Solomons (1991), argue that it is no

13、t 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 emb

14、edded in social reality it is neither inexplicably given nor a straight reflection of social reality and in social conflict, its theory and methods inevitably favour one side of the conflict over another. Thus Lovell (1997) finds it problematic that accounting concepts are often presented as neutral

15、 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 Kohlbergs (1981) hierarchy o

16、f 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, override human laws. Where accounting control is assumed to work because people do not want their unde

17、rperformance to be detected, a stage one motivation exists. Linking acceptable performance to financial 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

18、the law, either respective state laws or the organisational “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. 2. Deontological ethicsDeontological ethics focuses o

19、n duty or moral obligation, deon being the Greek word for duty. There are various deontological concepts, such as “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 mor

20、ality 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 rea

21、ds (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 fulfil two criteria to become universally binding: first it has to be shown that the

22、 maxim can be universalized without contradiction. Breaking promises if the disadvantages outweigh the benefits is not universalisable, because if it was nobody could rely on anybody telling the truth anymore. Secondly, one has to show that a rational agent ought to will the maxim, i.e. that it actu

23、ally 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

24、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 several categorical imperatives, may clash; here the principle

25、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, whatever the gain to individuals or society. The link between morality and the will of the agent allows us to praise people for their intent

26、ions even if the results fall short of expectations. A deontological approach is also the most important basis for criminal law.Deontology in accountingA deontological perspective underlies much of the self-regulation in accountancy, see for instance the explicit requirement by the Auditing Practice

27、s Committee in the US on qualifying a companys 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. This clear, deonto

28、logical 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 considerin

29、g the consequences of a qualification, would want to give the company a clean account; the more since a qualification 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. BCCIs auditors Price W

30、aterhouse considered qualifying the accounts in April 1990 but reasoned that auditors “owe a duty to shareholders to consider very carefully the possible impact of their report” because a qualified report would have more dramatic consequences for a bank than for an industrial concern. BCCIs accounts

31、 were not qualified, and the bank was able to trade for another 14 months before it finally collapsed in July 1991. Moizer (1995, p. 430) concludes that the professions Code, which is based on either deontological or rule-utilitarian approaches, must be followed without regard to the particular situ

32、ation; auditors ought not to consider the consequences of their actions, “since they have already been evaluated for the profession as a whole”.Deontological ethics is uncompromising by definition, but the complete disregard for circumstances can lead to morally dubious requirements. Few would follo

33、w the Kantian notion that telling a lie should always be wrong, 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 mus

34、t 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. “One feels as an accountant”, said a participant in a study by Vyakarnam et al. (1996, p. 159) that “there are so many rules a

35、nd 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 ethicsIn contrast to the universal emphasis on moral duty in deontology and o

36、n general happiness in utilitarianism, Aristotle emphasizes the importance of a persons 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 flourishing and well-being. This highest g

37、ood is closely linked to the function of a human being, which is to obey reason, as this is the main characteristic to set humans apart from other living beings. As a good flautist plays the flute well or a good knife cuts well, Aristotle argues, so a good human is good at applying reason. Acting ac

38、cording to good reason is the distinguishing feature of virtuous behaviour. Reason helps to avoid both excess and deficiency; 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 ex

39、perience and habituation. Aristotle (1985, trans. Irwin) defines that “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

40、cannot make. Internal goods emerge from specific practices. They can only be experienced after a long engagement in the practice and their achievement benefits the whole of the community. External goods are not uniquely related to any practice; they are an individuals property and are objects of com

41、petition. Thus, when Turner revolutionised the painting of sky and clouds, he created an internal good, irrespective of the external goods, such as fame and income, he attained too (MacIntyre, 1985, p. 190f.). Four Cardinal Virtues1. Wisdom - 2. Justice - 3. Courage4. Self-Mastery Virtues and accoun

42、tingVirtue 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

43、. Virtue ethics, on the other hand, recognizes 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 conflicting duties and loyalties in a morally appropriat

44、e way because they provide the inner strength of character to withstand pressures that might otherwise overwhelm and negatively influence professional judgment in a relationship of trust. He sees two virtues as having particular importance for the accounting profession, integrity, which enables the

45、auditor to maintain objectivity under competitive pressure and trustworthiness, which ensures public confidence 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 (Solomon

46、s, 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 conflicting, and whe

47、re the individual needs to develop a social selfconsciousness for transcending conflicts. 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!F

48、rancis (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 benefits of retaining a client. Secondly, the organisation of accounting into a sm

49、all 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 p

50、ractical wisdom, which differs from the routine application of rules, such as those by the professional bodies. Furthermore, 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 (Hart

51、man, 1994). Aristotles definition 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 dist

52、inguished 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 definitions of community, which lead to diverging conceptions of the required virtues. A management accountant may take her employer to be her c

53、ommunity 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 already give concrete advice. The focus on character also neglects power distribution in organisations;

54、 it may actually disguise power structures and prevent change. The rich language of virtue ethics also lends itself for PR exercises.4. Ethics of careThe ethics of care has been developed as a feminist critique of the traditional moral philosophy on the basis of rights and rules. Traditional ethics

55、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 conflict. The moral responsibility arising from both rights and rules is universal; it binds all moral agents equally (cf. the principleo

56、f utilitarianism or Kants 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 reflects male dominance in western society and thought. Gilligan (1

57、982) 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 w

58、ith others (Noddings, 1984). Instead of bargaining between rational agents and rule-based settlement of conflict, an ethics of care focuses on respect for others; maintaining the relationship is valued higher than scoring a victory or exercising ones right. Ethics of care and accountingAn ethics of

59、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 “it exhibits caring behaviour consistent with firm policy”. A company is here seen as a secondary caring agent, dependent on the primary caring actions of its organisational members. Liedtka (1996) finds that much of the present rhetoric about car