Exploring ethical Obligations and Decision Making in Accounting



Understanding ethics or moral philosophy allows people to deepen their appreciation on the ultimate questions of life, whether this particular act is right or wrong or good or bad (Gensler, 1998). Inability to comprehend the implications of moral philosophy in ordinary circumstances and situations has the potential to ruin society and the moral foundation to which it was originally built. Ethics also has the potential to bring people's perspective on a higher level surpassing the temporal and earthly considerations of everyday existence. Moral issues are therefore given more weight in the face of difficult choices and options (Jonsen & Toulmin, 1988). Accounting as an information system has been commonly defined as, "… the process of identifying, measuring and communicating the economic information of an organization to its users who need the information for decision making" (Tulsian, 2006, p.1). Thus, what was learned inside the halls of learning as academic theories of accountancy are now put into actual practice through accounting. From the 12 advantages of accounting (Tulsian, 2006) and in relation to the subject of ethics, its role in assisting management is the most relevant. In any business organization the role of management and the assistance provided by accountants is critical especially in the areas of planning and controlling. Wrong information provided by accountants can have negative repercussions on the overall operation of the company. And it is to this end that accounting has been regarded to influence the greater sector of social and institutional practice. Hopwood and Miller (1994, p.11) in reference to this social and institutional aspect mentioned, "… that accounting is, above all, an attempt to intervene, to act upon individuals, entities and processes to transform them and to achieve specific ends."


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This paper will discuss ethics and ethical obligations as they relate to individuals and organizational operations specifically decision - making and their implications to the accounting profession using the four perspectives of ethics. To set the direction of this research paper, the researcher first defined its three components namely: accounting, ethics and ethical obligations and decision-making. Accounting is both an essential practice and a vital profession in the economically developed world today (Sarlak, 2008). It is a necessary and vital practice because the increasingly globalizing economic system cannot stand and exist without it. A distinguishing characteristic of accounting as a profession is how it accepts, though not necessarily embraces, responsibility to the general public. Society imposes high expectation to its members and that is why we have standards to start with.

Society provides yardsticks by which to measure its members and help them become the "ideal." But it does lay higher expectations on professionals. People need to have confidence in the quality of the complex services provided by professionals. So their services, especially financial statements should be highly competent, reliable, and objective (McDonald & Donleavy, 1995). The accountants must not only be well qualified but must also possess a high degree of professional integrity. A professional's good reputation is one of his or her most important possessions. So ethics in accounting is of utmost importance to accounting professionals and those who rely on their services (Sarlak, 2008). For accountants, most people believe that they are people who simply do the math - they do not make decisions. They only make sense of what is handed out to them and deliver what is asked of and from them. However, that is not really the case. Accountants also call the shots and when they do they have to consider the gravity of their decisions. Will their decisions destroy a company's name? Will it imperil a family's mortgage plan? Will it put a child's education on hold? Will it deprive a married man a stable income for his wife and his soon to be born twins?

The term ethics refers to rules and principles that define right and wrong conduct (Robbins & Coulter, 2008). Ethics is also defined as the set of the moral choices a person makes based on what he/she ought to do (Dubrin, 2009). Ethics is grounded on a person's beliefs about what is right or wrong, good or bad. Ethics, however do not end with knowing that something is moral or immoral, ethical or unethical. Contrary to this, ethics is considered as a vehicle that converts and translates values into action. Take for example, a person values a clean environment; the corresponding ethical behaviour is to plant more trees that has the ability to absorb carbon dioxide which is one of the most dangerous pollutants. The controversial large scale financial scandals in business during the onset of the new century have intensified and solidified the recognition of the role and importance of ethics in the global economy. The ethical or non - ethical behaviour of accountants in an organization exerts a major influence on how outsiders and insiders alike will perceive the firm. If the behaviour, attitudes and actions of an accounting personnel is blatantly unethical and violates the law, such can lead to outside intervention and an external person getting into the organization (McDonald & Donleavy, 1995). This scenario can lead to in - depth scrutiny, which leads more often than not to unreasonable demands even blackmailing and other unwanted and widely avoided manoeuvres.

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The four perspectives of business ethics include the utilitarian view of ethics, the rights view of ethics, the theory of justice view of ethics and the integrative social contracts theory (McDonald & Donleavy, 1995). The utilitarian view of ethics states that ethical decisions are made solely on the basis of their outcomes or consequences. This view uses a quantitative method in coming up with ethical decisions. The question that this approach tries to answer is, "How many people will be benefitted with this decision?" If the answer is the greater number, or at least the majority, then the decision will be carried out. Utilitarianism encourages efficiency and productivity and is consistent with the goal of profit maximization (McDonald & Donleavy, 1995). However, the same view has the tendency to have biased allocation of resources, especially when the parties affected lack the number. This view can also lead in the ignoring of some rights of stakeholders (Alam, 1999)

Another ethical perspective is the rights view of ethics, which is concerned with respecting and protecting individual liberties and privileges such as rights to privacy, freedom of conscience, free speech, life and safety and due process (Robbins, 2008). This perspective is very focused in individuals that it somehow fails to consider the bigger picture - the organization itself. It poses obstacles to high productivity and efficiency, which are the very ideas that support the existence and operation of businesses by creating an environment that is more concerned with protecting individuals than getting things done. This view also has the tendency to pamper organizational members to the extent that the goals are set aside and personal interests are fulfilled.

The theory of justice view of ethics states that rules are to be imposed and enforced fairly and impartially. This approach seeks to apply laws across the board and without prejudice to those who occupy higher positions or positions which carry more prestige than others (Alam, 1999). The justice view, unlike the utilitarianism view protects the interests of the minority or those stakeholders who may be underrepresented or have no significant influence to pull strings in their direction (Dubrin, 2009)

The last ethics perspective is the integrative social contracts theory, which proposes that ethical decisions should be based on empirical (what is) and normative (what should be) factors (Robbins, 2008). This is hinged on the integration of the two "contracts" namely the general social contract which permits businesses to operate and defines the acceptable fundamental rules, and a more specific contract among its members that addresses acceptable ways of behaving. Basically this approach considers the present state of the business to what it aspires to become (McDonald & Donleavy, 1995).

Ethical obligations refer to the duties that accountants or any professional should realize. However, given the competitive environment that most accountants find themselves in today, most accountants seem to have vowed to do anything and everything to please their clients and establish their name as reliable but not necessarily ethical and law - abiding (Ferrell & Fraedrich, 1994).

Individuals at all levels and in all areas of organizations make decisions. That is, they make choices from two or more alternatives (Robbins, 2008). For example, a top level manager makes decisions about their organization's goals - how such will be attained, how to motivate employees to work to contribute to the realization of the group's objectives, what to do in the face of challenges and problems and other similar concerns. Middle and low - level managers make decisions about setting weekly or monthly production or distribution of goods and services and a handful of middle range goals. But making decisions is not something that only managers or executives do. All members of an organization make decisions that affect not only their jobs in the individual level but also the fate of their organization in a wider setting.

How are decisions reached? Scientifically speaking, decisions are made by undergoing a series of steps more commonly known as the decision - making process. The decision making process is a set of eight or more or less eight steps, depending on the model used, which aids individuals regardless of the positions they hold in an organization to arrive at a sound and rational decision.

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Identification of a problem

Identification of

Decision Criteria

Allocation of

Weights to Criteria

Development of


Analysis of Alternatives

Selection of an Alternative

Implementation of

the Alternative

Evaluation of Decision Effectiveness

Figure 1 Eight - Step: The Decision - Making Process (Robbins, 2008)

The decision - making process begins with the existence of a problem or, more specifically, a discrepancy between an existing and a desired state of affairs (Robbins, 2008). As an example, the decision to purchase a laptop or not can be a burdensome issue. This is considered a dilemma because while there exist a disparity between the current individual's status, not owning a laptop of his own and the need to get things done at anytime and anywhere - without having to worry about availability of units in computer shops, wake up early in the morning to finish assigned work and plead with the instructors to extend the deadline. The situation is quite simple, the answer even simpler and some may even consider it a problem which requires very little - common sense. Buy the laptop, end the problem. Or so we think. Unfortunately, daily life experience today does not tell much about how people in the corporate world, specifically accountants identify problems. In the real world, most problems do not come in very obvious packages - with neon signs saying "potential problem, please address." Most, if not all, come as very plain financial statements that need to be reviewed then signed for execution, but are actually complex - complicated unbalanced accounts with no records to support them. Problem identification though subjective because one accountant might consider a specific client's case as a problem, but another might not, is neither simple nor insignificant and can be skipped (Hosmer, 2000).

The second step involves identifying the decision criteria or the standards that define what is relevant in a decision (Robbins, 2008). Whether they are expressly stated or implied, every decision maker has criteria that guide his or her decision. In the globalizing and increasingly changing face of corporate world, ethics is an integral part of this guide. It is in this step that the four different perspectives of ethics diverge: extend benefit to the most number of people (utilitarian view), protect individual rights at the expense of the organization (rights view), do the right but not necessarily the most beneficial thing the most (justice view), propose necessary changes to achieve what should be (normative) and transcend what is (empirical) even with opposition coming from others.

The third step focuses on allocating weights to the criteria. The criteria defined in step two do not have the same degree of significance that is why there is a need to assign values to each. Step four involves developing alternatives that could resolve the problem. Next step focuses on analyzing the list of alternatives. Each alternative is now carefully studied and scrutinized against the criteria established in the third step. Step six is the choosing of an alternative. While step seven refers to the implementation of the alternative or the conveying of a decision to those affected and getting their commitment to it. The last step is the evaluation of the decision's effectiveness, which necessarily answers the question, was the objective attained at the end of the day? (Robbins, 2008). The most common approach followed starting from step three is the utilitarian view - that is to give more importance to the demands of the client even if it means foregoing the explicit and unwritten codes of the profession than to keeping one's actions in check and within the bounds of the codes and the law. But why is the utilitarian view the most used and adhered to approach to ethical decision - making? This is because it is the theory that is consistent with the universally - accepted business goals of efficiency, productivity and profits.

To illustrate the decision - making process involving accountants in line with the ethical considerations that they face everyday, consider a rather common accounting problem. A wife of an executive of a company seeks the services of an accountant because she doubts that the expenses incurred by her husband go way beyond what they can afford. However, when she got a copy of said expenditures they were stated in very conscientious amounts. She now asks that the accountant review the said document. However, she cannot access the bank record of her husband as he used his personal account to pay for his purchases. Moreover, she does not have the receipts as evidence for her hunch. In spite of the expertise of the accountant consulted, without the needed files, he cannot possibly help the wife. Here is a case of a problem that has been singled out but cannot be categorized as such because the accountant has no chance to address such; he has no resources to start with. The more important question is, how does ethics come into play in this scenario? The accountant as a last recourse can use his connections to access the files he needs. He can bribe the bank officers and the financial personnel in the establishment where the purchases have been made - all these in pursuit of the truth that the wife firmly believes.

Values in the workplace. Values refer to stable, long - lasting beliefs about what is important in a variety of situations that guide decisions and actions (McShane & Glinow, 2008). Values bring the person not simply to work, but to work outstandingly and without reservations.

How then should organizations address these rather divergent values? There is no hard and fast rule of doing this. But some suggestions include the concept of shared values - the pool of common values upheld by a team, department, organization, profession even the entire society, the creation of an appealing organizational culture- values, beliefs, attitudes and perspectives that reflect the organization's way of doing things and getting things done and lastly, through an organizational structure which refers to the formal framework by which jobs, tasks are divided, grouped and coordinated (Robbins & Coulter, 2008). Shared values are not a result of same perceptions but more of accommodation - accepting rather than rejecting different values and finding a common ground. Part and parcel of the suggestion on organizational culture is to let members undergo organizational socialization or the process that employees, whether top - level managers or field workers go through to adapt to an organization's culture. Ways of realizing such include: holding seminars and workshops, sponsoring team building activities and camping out. The above mentioned seem ordinary but time and again, they have been proven to meet the objectives satisfactorily (Dubrin, 2009).

It is a universally - accepted fact that all organizations have cultures. However, not all cultures have an equal and uniform impact on employees' decision, action and behaviour. Strong cultures - cultures in which the key values are deeply held and widely shared possess and pose a greater influence on employees that weak cultures do (Robbins, 2008). How do we know which culture is stronger? The more employees accept or adhere to the organization's key values and the greater their sense of commitment and responsibility is to those values, the stronger the culture is. What are the possible connections of a strong organizational culture and ethics? The strength of an organization's culture has a significant influence on how ethical accountants will be. If the culture is strong and supports and upholds high ethical standards, then it is expected to have a powerful and rather positive influence on the accounting personnel's behaviour, actions and decisions. On the other hand, in a comparatively weak organizational culture, the norms and yardsticks of work groups and departments will more strongly influence ethical behaviours (Adler, 2002). This translates to tainted actions and attitudes as the standards which has a direct effect to the accounting officers are those of their immediate environment - their boss and superiors. Despite the hierarchy of offices, there is an implied risk in weak cultures as personal interests and gains are always present and human nature dictates that these must first be realized and achieved before anything else.

As for organizational structure, it provides the context by which the employees will act. It provides as well as contains the activities that are and can be done. Under this suggestion, a perceived change or development of the organizational structure is also considered a possibility. This process more commonly known as organizational design, or the process that involves decisions about six key elements: work specialization, departmentalization, chain of command, span of control, centralization and decentralization, and formalization. Work specialization describes the degree to which tasks in an organization are divided into separate jobs. Its essence is that an entire job is not done by one individual but instead is broken down into steps, and each step is completed by a different person. Work specialization delineates the task to avoid encroaching. Departmentalization refers to how jobs are grouped together. Every organization has its own specific way of classifying and grouping work activities. Chain of command is the continuous line of authority that extends from upper organizational levels to the lowest levels and clarifies who reports to whom. The three components under which are: authority, the rights inherent in a position to tell people what to do and to expect them to do it, responsibility, the obligation or expectation to perform and unity of command, preserves the concept of a continuous line of authority and states that a person should report to only one superior. Span of control is concerned with the number of employees a manager can efficiently and effectively manage (Mc Shane and Glinow, 2008). Centralization describes the degree to which decision making is concentrated at a single point in the organization. It is also known as top - down decision making wherein the top - level executives make the decision and simply pass them on for implementation to the ground - level workers. Decentralization states the degree to which the lower - level employees provide input or actually make decisions. It is also referred to as bottom - top decision making wherein the lower - level personnel are empowered and allowed to flesh out decisions for the organization. Lastly, formalization, which is the degree to which jobs within the organization are standardized and the extent to which employees behaviour is guided by rules and procedures (McShane & Glinow, 2008).

All these are claimed to help establish values in the workplace as they all develop and cement certain values. These values are expected to serve as anchors of all organization's activities - especially those which are concerned with accounting or the bookkeeping methods involved in making a financial record of business transactions and in the preparation of statements concerning the assets, liabilities, and operating results of a business. Work specialization teaches acknowledgment of one's and other's capabilities and adherence to limits and boundaries. Departmentalization, centralization and decentralization inculcate cooperation and unity and encourage participation for the attainment of the set goals. Chain of command and formalization train employees to respect persons in authority as well as rank and file personnel and the organization's rules and laws. Span of control edifies responsibility and efficiency, defined as getting the most output from the least amount of input (Robbins, 2008).

Objectives of the Study

This paper discussed ethics and ethical obligations as they relate to individuals and organizational operations specifically decision - making and their implications to the accounting profession using the four perspectives of ethics. First, the researcher considered and studied three philosophical criteria for making ethical decisions and realizing ethical obligations. Second, the researcher described major and threatening ethical problems. Third, the researcher presented and suggested a guide to ethical decision making especially for accountants. Fourth, the researcher described and defined the role of organizations, focusing on accountants, in promoting an ethically responsive culture.

In the process of answering these questions, the researcher likewise delved into the changing treatment of ethics in the decision - making process in the accounting profession.

The researcher asserted that:

Ethics is becoming increasingly important in the accounting profession. Recent controversies involving large business and accounting firms have paved way for the call for an across the board added ethics subject for future accountants and accounting professionals. The globalization of the accounting profession also contributes to the close watching of practitioners by the academe, the consumers, the government and established accounting firms.

The Ethical Philosophical view that most accountants and accounting firms follow is the utilitarian view as this is the most compatible with the business goals of efficiency, productivity and profit maximization.

The business mantra of pursuing business goals at all cost undermines the very moral fiber of the profession - as accounting is transformed into a money - oriented profession rather than an ethical and socially responsive practice.

To crystallize the claim that ethics is becoming an increasingly important factor in the process of reaching decisions for accountants it is important to scan the literature for similar studies that was conducted in the past.

Literature Review

Is it ethical for an accountant to bribe a bank officer to alter a check that has already been issued to save the company he works for from being subjected to government tax reviews for tax evasion? Would it make any difference if by doing so, he will save a thousand more employees other than himself from becoming suddenly unemployed? Is it ethical for an accountant to remove certain provisions from the financial statement to save the manager from a lifestyle check due to personal expenses passed on to the company? How about letting the big bosses find out the manager's practice and endanger his upcoming promotion, which he had been waiting for 10 years?

Ethics is a critical factor in the accounting profession especially in the present world economic order where technical and intellectual capabilities as well as integrity and reputation are becoming the core of competition. Like in any other profession, there exists a code of ethics for accountants although not as explicit and well -structured as the Doctors' Hippocratic Oath. The most primary rule for accounting professionals is to provide competent, accurate and reliable service to those who seek their expertise (Mathison, 1988).

Several factors are correlated with ethics and ethical obligations in decision - making in accounting such as values, motivation, organizational culture and organizational structure (Dubrin, 2009; McShane & Glinow, 2008; Robbins, 2008). In the present paper, the role of the abovementioned factors especially values, organizational culture and organizational structure are investigated. It is hypothesized in this paper that 1) that ethics is becoming increasingly important in today's corporate world; 2) that the utilitarian view of ethics which favors the majority is the most commonly used approach when dealing with ethical decisions and obligations; 3) that the continuous pursuit of business goals which include efficiency, productivity and profit undermine the ethical grounding of the accounting profession.

In a research article published about Tom's Maine (Robbins, 2008), it was found out that employees work and perform best when encouraged to pay attention not only the corporate goals but also to their values. According to Tom Chappell, the co - founder of the company, "It's management by values and objectives, not just management by objectives." Chapell elucidates that while objectives are the domains of the mind, values are the domains of the heart and soul. He further stated that what they employ are not merely the minds of the employees but also their mind and soul - their integrity, character and commitment to the company's goals. Values are so important for Tom's Maine that the co - founders even went as far as contributing and supporting the establishment of Saltwater Institute, a foundation that helps CEOs, entrepreneurs and accounting professionals integrate their personal values with their workplace activities and professions (Gandz & Hayes, 1988).

In another study conducted at Coles Myer (Robbins, 2008), it was found out that values bind the company together and affect not only their individual performance but the reputation of the company as well. A set of coherent values, which come from both the employees themselves and the company plays a vital role in how employees act on a particular situation or condition. This set of values propels them to evaluate their actions and look after their co - workers. Seeing how such values affect the work force, Cole Myers, invested in seminars and trainings to ensure that the values are integrated in the organization's culture and eventually becomes an extension of the employees' personality.

Values serve as the foundation of any organization - especially with the more sensitive positions such as accounting officers and personnel. They are perceptions about what is good or bad, right or wrong (Mc Shane & Glinow, 2008). Values tell people what they "ought to" or "should" do. They serve as a moral compass that directs not only our motivations or reasons behind, and potentially and ideally, people's decisions and actions. Values greatly define individuals and as members of an organization. But, is having a set of core values enough? Not quite, because people arrange values into a hierarchy of preferences or what people call value system. There is an inherent risk that values which must take primary consideration is reduced to secondary spot due to some practicality and "for the good of the company" issues. Clashes such as conformity against surpassing challenges and generosity and versus frugality are always present and which may result to some compromises (Fleckenstein, 1997). It takes more than willingness to align irreconcilable values for each person has a unique and distinct value system. Especially because such value systems are ingrained and reinforced regularly through socialization from parents, religious institutions, friends, personal experiences and the society in which one lives. What could be the possible implications of this? This is quite simple in theory but possess a far reaching effect. A person's hierarchy of values is well-founded, stable and for long-term. For example, one study found that value systems of a sample of adolescents were remarkably similar 20 years later as adults (Mc Shane & Glinow, 2008).

These studies affirm the hypothesis that ethics is becoming increasingly important and that professionals, not only accounting practitioners are realizing the essence of strengthening ethics through values formation in individuals and in the whole organization alike. Several best selling management books conclude that Tom's Maine and other successful companies have a deeply entrenched and long - lasting set of core values - their anchors and their guide in doing business. To be successful like these well -established organizations, executives have been careful to identify, communicate and uphold a set of core values in their own backyard so as not to send a wrong message to their employees.

Next, in 1999, the company Digital Music Express received a proposal from Darien Dash to wire inner cities to provide them digital services, which the company offers. In the process of deciding, the upper level managers asked their financial and accounting offices to estimate the revenues they are likely to reap from the venture and compare it with the foreseen expenses. The concerned offices came up with a report stating that the company's proposal although compatible with their commitment to bring digital services to urban communities is irreconcilable with the company's highest priority - rake in profit. Moreover, the report stated that the company cannot and will not commit to a project that does not hold a promising future to the institution and its employees. It is after all, the company's responsibility to ensure continued employment to its members. As such it cannot risk its financial resources and capital to a proposal which will only affect and benefit a small number of people - those of the inner cities. Dash's proposal was repeatedly rejected for the said reason. Not in any way discouraged that his plan is feasible at the same time profitable, Dash established his own company, the Digital Mafia Entertainment. His top priority was to expand the hardware and software infrastructure of minority communities. Today, DME is a known total internet service company based in New Jersey. Its employees not only provide network design, e - commerce and website maintenance, it is also a top provider of advertising for companies such as HBO, the New York Knicks and other prominent companies. It has successfully evolved into a well - rounded Information Technology company - a venture that Digital Media Express considered a waste of time and resources some years back. Digital Express is not the only company which took cover in the face of doing what is noble when the price to pay is a probable bankruptcy or very little returns. Most companies stick with a business plan that ensures profit maximization and increased popularity.

This finding supports the last two hypotheses that in making ethical accounting decisions, most accounting professionals adhere to the utilitarian view which supports the decision which benefits the majority or at least a larger number of people; and that the pursuit of business goals undermine the ethical grounding of decision - making. However, given the decision of Dash, it can also be claimed though it would need further affirmations, that some actually held fast to their principles and would rather take on a risky decision as long as there is a noble reason behind. Companies, regardless of their nature, businessmen claim are put up not to serve as charitable institutions but as means to garner profit and support the workers that contribute to its growth and expansion. The spirit of capitalism - that is profit maximization will always be at work. The prospect of accumulating wealth is what encourages people to shell out and part ways with their hard earned money. The thought of gambling to gain more is what keeps businesses in operation and drives economic expansion.

Despite these findings, the researcher believes that such perspectives and beliefs need to change because of the increasing importance of accounting professionals in the global corporate world. Present trends toward individual rights, social justice and community standards - especially social responsibility mean that accountants need ethical standards based on non - utilitarian criteria, or at least moving away from criteria such as efficiency and profitability (Robbins, 2008). The result of course, is that accountants will find themselves struggling with ethical dilemmas concerning not only the new set of criteria with which their decisions will be hinged; but also their possible drawbacks to their personal and professional growth (i.e. less clients and less accounts).

Findings and Analysis

It is always argued that sound and good accounting decisions are products and outputs of "valued and principled" accountants (Mathison, 1988) These accounting professionals do not simply make decisions out of convenience or whim, but consider the good of the company and the other stake holders such as the people who rely on the company - both inside like the executives and rank and file employees; and outside such as the consumers. The increasing number of reported unethical practices have also resulted to more calls clamoring for the inclusion of ethics in the college curriculum of accounting to prepare and orient future accountants to an ethically - based profession (Brinkmann & Sims, 2001). This proposal is aimed at teaching business ethics across the board, to all business practitioners - not only accountants because ethics is not only useful to accountants in particular. The question however of teaching or not to teach has not been resolved since a lot of objections have been raised. How can business thrive if it will stick to ethical ways, which are at present necessarily legal, of conducting business? What happens to goals set and the business concepts of efficiency, profitability and sustainability? Will they now be replaced with righteousness, uprightness and social responsibility and responsiveness? If not, how will we try to meet both ethical standards and business goals? Is there a way of reconciling these rather opposing concepts? Proponents of ethical business operations think and firmly believe that the only way to do business is the ethical way. According to them sooner or later, businesses will have to adopt ethical standards because clients look at reputation and society expects professionals to be responsible, competent and possessing integrity. Moreover, in a globalized economy, no accountant or accounting firm can risk being prohibited from practicing their profession and from running business due to be brazenly unethical and illegal practices.

Lastly, no matter what ethics perspective one uses, it cannot be denied that all propose a certain standard of what is right or good (Geva, 2000). Be it the utilitarian view that favors the majority, the rights perspective that upholds individual rights or privileges, the justice view which proposes an impartial and fair implementation of rules or integrated social contracts theory which takes into consideration what is and what should, they all have prescriptions as to what and how ethical business should be done.


It is now apparent that ethics in accounting is very important if accounting as a discipline and as a profession should prosper. The survival and integrity of an organization or a company rests on the shoulders of accurate, fact-based and error-free information provided by accountants for use by stakeholders in whatever purpose it may serve them. Accounting can therefore impact the kind of social reality people inhabit, the type of world people live in as well as influence the way people organize processes that can impact their lives and the lives of others (Hopwood & Miller, 1994). For example an omitted zero in the balance sheet may mean millions of dollars lost or millions of shares of stocks wasted down the drain because shareholders totally placed their fate and trust on the numbers provided them by the accountants.

Certified Public Accountants (CPA) and similar professionals must be aware of these responsibilities they have for the people and organizations, which need their services and advice. Not only must they be professionally qualified in terms of technical knowledge and skills but must also possess a high degree of integrity, reliability and objectivity. This boils down to having a good reputation and a clean name untarnished by unethical and illegal activities. It is for this same reason that the code of ethics for accountants must be followed religiously by every accountants and similar professionals not only because of themselves but more importantly for the integrity of the whole profession in general. The lessons of Enron are still fresh in everybody's mind where lives were destroyed and dreams shattered. It is just hoped that the next generation of accountants will be true to their professions and that they must look beyond the temporal and into the realm of morality and justice too.