Week 2_Ethics - ACCT 3563 - IFRA Business Ethics Week 2...

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1 ACCT 3563 - IFRA Business Ethics Week 2 Richard Morris Lecture Plan 1) Ethics in Accounting 2) Teleological and deontological theories of Ethics 3) Aristotle’s Nichomachean Ethics .
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2 Ethics in Accounting • Presented by: Assoc. Prof Richard Morris • In preparing these lectures on ethics, I have benefited much from the assistance of, and discussions with, Dr Peter Birrell, School of Psychology, UNSW. Ethics in Accounting • Why look at ethics in this subject? • HIH Royal Commissioner , Justice Owen said in his Report (April, 2003): •“ The educational system – particularly at tertiary level – should take seriously the responsibility it has to inculcate in students a sense of ethical method.
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3 Ethics in Accounting Recent corporate failures have highlighted weaknesses in business ethics. Increased regulation will not solve all the problems Ethics : “ The science of human conduct as known by natural reason. It is a normative science because it determines principles of right and wrong in human behaviour .” Ethics in Accounting • Everyone has an in-built mechanism for distinguishing right from wrong –our conscience. • The conscience can develop well (become sensitive) or badly (become blunted) during our lives. • Ethical theories try to explain how that happens - how we distinguish right from wrong.
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4 • Ethical systems fall into two broad groups: –Teleological theories - where behaviour is ethical if it results in desirable consequences –Deontological theories – where a person is ethical if they do their duty or follow the rules/laws. – The two categories are not perfectly exact. Theories of Ethics Teleological ethical theories (Consequentialism) Ethical egoism act so as to maximise your own “good” (self-centred) : – Hedonists – seek pleasure – Epictetus - seek contentment, and avoid conflict, anger, or concern – Homo economicus (economic man) rational self-interest maximisation (as in PAT) – Milton Friedman’s variation: the objective of business is to maximise profits within the law and accepted codes of behaviour
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5 Theories of Ethics Other Teleological Ethical Theories Utilitarianism: – (Jeremy Bentham 1748-1832; JS Mill 1806- 1873) Maximise utility – the greatest good to greatest number of people – An important teleological theory – Utilitarianism underlies welfare economics – In utilitarianism it would be OK to toss someone out of the lifeboat to save the rest. But is it really OK to do that? Theories of Ethics Other Teleological Ethical Theories • Ethical elitism – maximise the welfare of elite groups in society, eg. The King, the Nobility, the rich, the ruling party, or military leaders • Ethical parochialism – maximise the welfare of your “in-group”. Examples of “in groups”: family, profession, country, gender, employer company, favourite football team
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6 Theories of Ethics Deontological ethical theories – Are heavily duty-based or rule-based – Some religions have deontological ethical
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This note was uploaded on 05/02/2010 for the course ACCT 3756 taught by Professor Leung during the Three '09 term at University of Sydney.

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Week 2_Ethics - ACCT 3563 - IFRA Business Ethics Week 2...

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