Introduction to Ethics and Ethics Framework 代写
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•Topic 1
Introduction to Ethics and Ethics Framework
•MAA350 Professional Ethics and Governance
•LEARNING OBJECTIVES
Describe and understand
•Ethics and values.
•Ethics framework and ethics of individuals, workplace and governing body
•Ethics expectations and ethics risks
•Professional judgment and ethical decision-making
•Corporations and ethical failure
•The need to restore credibility and trust
•Roles of other reviews and regulations
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•WHAT IS ETHICS?
•Ethics is about Choices: assessing alternatives, making the ‘right’ decision and acting on it in accordance with the decision, with courage
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•Ethics encompasses individuals, groups, organisations and society
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What is Ethics? – Joseph Desjardins
Joseph R. DesJardins is the Associate Provost and Academic Dean at the College of St. Benedict and St. John's University in Minnesota where he is also a Professor in the Department of Philosophy.
Click here to watch
http://www.youtube.com/watch?v=3fMLIMaPw0I
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•Ethics is concerned with the study of human character (values) and behaviour.
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•Overall, ethics prescribe what people ought to do and behave with an emphasis on doing good and avoiding harm.
•ETHICS AND VALUES
•Values provide a framework that supports sound choices, ethics is concerned with doing what is right. In turn, doing what is right is founded on good values.
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•A person’s values, is also referred to as their personal ethics.
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Ethics, values and behaviour (Figure 1.1, p. 5)
•THE STUDY OF ETHICS IS CONCERNED WITH:
1.Concepts of right and wrong
•provide the means by which decisions and actions may be judged as right or wrong
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•provides the roadmap by which we can make sense of deciding right from wrong
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2. The ‘other’
•concern with other people's interests, the interests of our community
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3. Actions/behaviour
•Knowing what is right has direct implication for, doing what is right
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•THE ETHICS FRAMEWORK
The market (the environment), the business entity and the regulatory regime
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- The market: competition, resources, opportunities and threats, social and environment – Topic 10
- The entity: a going concern in the interest of owners & stakeholders -Topics 2, 3, 4, 5, 7, 8, 9
- Regulatory regimes: compliance, support and oversight functions -Topic 6.
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Three levels of ethics framework
•Governing body (management) – Topics 2, 9
•Workplace – Topics 3, 7, 8
•Individual employees- Topics 4, 5
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1.Governing Body (Corporate Governance)
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•Governance conveys authority & control
- Corporate Governance relates to strategies, directions, methods and manners adopted by a group of people such as the CEO, the board etc.
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•Traditional focus: the ability to maximise shareholders’ value
•More recent focus: board composition; independence of directors/auditors; accountability to stakeholders; financial reporting disclosure etc.
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The ethics of the governing body:
•Provide and facilitate good corporate governance practices
•Management of stakeholders’ interests
•Meeting conformance and performance drivers
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2. Workplace
•Influenced by the governing body
•Implementation of governance policies and procedures
•Monitoring of “soft issues” – workplace practices, norms and cultures
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3. Individual employees
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•Influenced by cultures & values established by the governing body and the workplace
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•An individual’s ethical behaviour is made up of four interrelated components (Ethical sensitivity, Ethical priorities, Ethical judgement and Ethical courage)
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Ethics, values and behaviour (Figure 1.1, p. 5)
•PROFESSIONAL ETHICS
•Someone who is an authority on the subject in which they are practised and who is in a position to remedy the problems presented to them by their clients or employers.
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•Takes on an additional burden of ethical responsibility by adhering to the public interest.
•PROFESSIONAL ETHICS
Figure 1.2 Values and behaviour in professional ethics
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Audio recording - CPA Australia (students to listen in own time)
Dr Eva Tsahuridu, Policy Adviser Professional Standards and Governance, CPA Australia, and Professor Sally Gunz, of Professional Ethics and Business Law at the University of Waterloo in Canada and Director of the Centre for Accounting Ethics discuss:
http://www.cpaaustralia.com.au/professional-resources/ethics/toolkit/ethics-and-professional-identity
• ethical obligations
• professional trust
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CIMA ethics in three minutes
•CIMA has produced this animation to help guide members and students on ethical business practice. Are you upholding the highest ethical and professional standards?
http://www.youtube.com/watch?v=mD0jGiaeg9c
•ETHICS EXPECTATION
•Professional accountant may assume responsibilities in any part of the ethics framework
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•Must maintain objectivity, integrity, independence, ethics and competency of a professional person
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Consider accountants’ roles in commercial environments, professional practices and regulatory regimes
•The impact of competitive pressure and environmental concerns
•Questionable business practices
•Corporate collapses and scandals
•Decline in confidence and trust towards executives and professionals, especially accountants
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Ethics threats: the risk of failure to achieve a certain standard of expected behaviour
•Self-interest
•Incompetence
•Conflicts of interest
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•APPROACHES TO ETHICAL DECISION –MAKING IN PRACTICE
[The] process of identifying a problem, generating alternatives, and choosing among them so that alternatives selected maximise the most important ethical values while achieving the intended goal (Guy 1990, p. 39)
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1. A Commonsense approach
•personal insight, intuition, judgment and experience
•probably the most widely employed approach to decision making
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2. ‘Satisficing’
•making ‘adequate’ or ‘satisfactory’ decisions (decisions are characterised as less than optimal but satisfactory)
•easy-to-understand decision rules or rules of thumb
•E.g. ‘never accept the first offer’; ‘a business is worth two-times its gross revenue’; and ‘only frauds in excess of $100 000 should be reported to the police’.
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Limitations
1. Treating an ethical dilemma as a problem
•A problem has a single right response, whereas ethical dilemmas are irresolvable due to equally compelling arguments for each alternative
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2. Ethical sensitivity
•a person’s ability to recognise the moral dimension of a problem (stakeholders and values affected)
•research findings among business professionals and student counterparts finds that they do not perform well in moral sensitivity tests.
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•Hierarchy of ethical decision-making
•LEVEL 1: ETHICS AND THE LAW
•Decisions governed by legally binding rules
•Provides three advantages:
1. law provides a provides an ethical minimum
2. law embodies many of society’s common beliefs and values
3.the law consists of enforceable rules
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•However, lawful decisions are not always ethical
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•LEVEL 2: ETHICS AND CODES
•Professional duties are based on a professional and ethically binding commitment to the principles of professional conduct at the expense of self-interest.
•Should be the first checkpoint in any situation involving professional conflict.
•Code represent an attempt to deter unethical behaviour
•Extent of compliance is dependent upon the effectiveness of the code in achieving its objectives, which in turn is dependent on effective enforcement
•LEVEL 3: ETHICAL PRINCIPLES
•A principled-based decision is not about compliance with law, policy or codes of conduct; it is about actions, values and consequences based on principles of ethics.
–decisions are made within a defined sense of right and wrong based on moral values and philosophical reasoning (such as the normative theories of ethics - see Topic 4).
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–likely to produce a more systematic analysis enabling comprehensive judgment, clearer reasons and a justifiable and more defendable decision than would have otherwise been the case.
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•CORPORATIONS AND ETHICAL FAILURES
•The prevalence of materialism and self-interest behind scandals and collapses such as Enron, Arthur Andersen, HIH, Lehman Brothers, Worldcom etc
•Most visible area of concern for business ethics because of its impact on the community.
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•Management greed, failure to exercise good corporate governance practices, excessive remuneration to CEOs, record fees paid to analysts and accountants etc.
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•WHO’S TO BLAME?
Criticisms over corporate collapses have been directed at three groups of personnel with some justification:
(1)Chief Executive Officers and other senior executives
–for having benefited personally (bonuses and other forms of compensation)
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(2) Chief Financial Officers and accounting personnel
–for their failure to apply accounting standards and for contributing to the overstatement of earnings; and
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(3) External auditors
–for not having discovered and reported these failures and schemes
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•THE LOVE OF MONEY/PROFIT (GREED)
•Self-interest and egotistic attitudes are arguably at the heart of unethical behaviour.
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•The problem starts when money becomes a priority in life and people do anything to have it in their possession.
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•Pressure on executives to meet the performance expectations of investors and analysts, combined with executive remuneration tied to operating performance, means an ever-increasing focus on short-term results.
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Duska (2004) offers six simple rules to avoid unwitting self-reward.
1.Constrain self-interest––to pursue self-interest at the expense of others is selfish.
2.Don't be greedy––greed corrupts the pursuit of desirable ends
3.Keep worthwhile goals in mind–- without them life is shallow.
4.Avoid hubris––hubris is excessive pride.
5.Don't misplace loyalty––should not do what is unethical for the sake of helping the company.
6.Be professional––always work to the best of one's ability.
•CORPORATE ETHICS PROGRAMS
•Good corporate culture and corporate governance to guide its members in achieving the core organisational objectives.
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•Corporate ethics program:
–is a form of control over the behaviour of individual employees to ensure that employees refrain from misconduct
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–as codes of conduct aimed at communicating corporate values and ethical behaviour, workshops, hotlines and a system for dealing with complaints.
•ROLE OF GOVERNMENT & REGULATION
•To restore public confidence after the global financial crisis, governments worldwide introduced tough new regulatory systems, more disclosure, increased law enforcement and greater criminal convictions for the managers of disgraced companies.
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•Most notably, the Sarbanes–Oxley Act 2002 (SOX) in the US and CLERP 9 Act 2004 in Australia.
•Sarbanes-Oxley Act 2002
•The Sarbanes- Oxley Act (SOX) has created an international regulatory framework for corporations seeking access to the US capital markets and their auditors
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•SOX also established a new framework for the US accounting profession that replaces self-regulation by the profession with a Public Company Accounting Oversight Board (PCAOB)
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Key provisions of SOX concerning accountants and auditors are:
•The audit subcommittee of the board must be directly responsible for the appointment, compensation and oversight of the accounting firm employed
•Procedures must be in place to receive and address complaints including anonymous complaints and to approve non-audit services engagements with accounting firm(s)
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•All members of the subcommittee must be financially literate, be independent directors, and the auditors are to report to the audit subcommittee
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•Requirements for certification by CEOs and CFOs on the adequacy of internal control and financial reports
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•Any undue influence on the conduct of the audit is illegal
•A list of matters concerning accounting policies, alternative accounting treatments, review of and attestation of management assertions, and material weaknesses in internal controls, are all required to be reported by auditors to the audit subcommittee of the board
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•CLERP 9
•Following the development of the Commonwealth Law and Economic Reform Program discussion paper No. 9 (CLERP 9), the paper was subsequently passed into law
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•It became the CLERP 9 (Audit Reform and Corporate Disclosure) Act 2004 (usually referred as the CLERP Act 2004) and laid down certain requirements
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•Both accounting and auditing standards setting are now under the control of the Financial Reporting Council (FRC), a government appointed body – both areas previously controlled by the accounting profession
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•The FRC oversees audit independence and is required to report to the Australian Treasurer annually on audit independence matters
•Retention of audit working papers for 7 years
•Certain audit competency standards are to be established
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•A new audit liability framework is introduced
•Prohibition of conflict of interest situations and a list of non-audit engagements by auditors
•Four years waiting period for a retiring partner to join an audit client
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•Rotation of lead and review partners every 5 years, with a minimum cooling off period of 2 years before reassignment to the audit
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•Auditors are required to attend AGMs and to answer questions
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•Other reviews and regulations
•The Ramsay report
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•Establishment of an Auditor Independence Supervisory Board, a role since taken on by the FRC
•The Australian Security Exchange (ASX) Corporate Governance Council, has released its revised Corporate Governance Principles and Recommendations
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In general, the major legal developments in corporate governance include:
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–a majority of non-executive directors who do not have a relationship with the company on the board of directors
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–an independent audit committee with membership comprising a majority of non-executive directors
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–a code of ethics that is enforced (reflecting the increasing attention to ethics, compliance and cultural issues within organisations)
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–an effective system of internal controls to ensure compliance with financial reporting regulation and the protection of assets from misappropriation
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–a concern for the rights of stakeholders as well as shareholders.
•SUMMARY
This topic provided:
–The background to understanding ethics and ethical decision-making
–Context of professional and ethical behaviour in business (individual ethics, professional ethics and corporate governance best practice)
–The ethical expectations of stakeholder participants and the regulatory regime
–Accounting and finance professionals are the moral agent of the organisation to protect stakeholders’ interests
–Ethics, professionalism and corporate governance are interrelated concepts founded on doing good for others, and if they are overlooked the results can be devastating
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For the love of money is the root of all evil: which while some coveted after, they have erred from the faith, and pierced themselves through with many sorrows.
1 Timothy 6:10, Oxford Kind James Bible, 1769
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