PHIL 350
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44 questions
| 🇬🇧 | 🇬🇧 |
| External Controls | Are market driven |
| Internal Controls | Revolve around executive compensation |
| Principal - Agent problem | When there is a conflict of interest between the principal and the agent |
| Agent | A person or entity that represents the interest of another party (managers and executives) |
| Principal | A rule or entity that is first ranked in importance or level of ownership (shareholders) |
| Monitoring | The constant flow of information so that shareholders are able to view the current state of a corporation. mechanisms are in place to oversee managers and evaluate their performance |
| Corporate Governance | Controls put in place to ensure that a corporation is running in a ethical, legal, and and transparent manner that is in the best interest of the shareholders |
| Bowie + Duska propose what criteria concerning personal responsibility? | - the extent of the need - the proximity of person (s) in need - the capacity to assist - others availability and likeliness to render assistance |
| What counts as genuine cases of whistleblowing | - solid/serious issue with evidence - other less harmful options must be exercised and unavailable - it is in the publics best interest to know - blowing the whistle must solve the problem |
| Two considerations when going through criteria of whistle blowing | - public interest must be threatened by a policy or procedure - employees have tried to fix the issue |
| What are the two types of whistle blowing | Internal - which is reporting the issue through a different channel of authority but still within the organization. External - which is outside of the organization but reporting to a senior authority, and/or media exposure. |
| Whistleblowing | Making public matters that organizations have ignored or wish to keep hidden but which constitute a significant wrong or an immediate danger |
| Why does the culture of an organization matter with whistleblowing | Hierarchical cultures perceive loyalty in terms of silent compliance and disloyalty as overt criticism. If an organization encourages consultation, silence is viewed as disloyalty. |
| Negative Advocacy | When the attention is directed onto the whistle blower attacking their credibility to divert attention away from the issue being exposed |
| Consequences of blowing the whistle | - Exposing injustice does not rid you from the potential adverse consequences - potential job loss, bankruptcy, marriage failure, murder, jail - the focus is directed onto the whistler blower while the attention is diverted away from the people keeping silent ~ scapegoating |
| What are some objections to whistle blowing | - Cause distrust within the organization - Person may have a grudge against the organization - Not all whistleblowers have a moral motive - Person may not have all the information therefore resulting is negative consequences - The information exposed is owned by the company - Act breaks employees contact - The employee has a duty to report to superiors |
| Professional Codes | Established set of rules that are followed by professions and sets the standards for practitioners |
| Alternatives to ethical empowerment are not good and lead to: | - stagnation - inefficiency - managers are unable to exercise good judgement |
| Business Code | Established set of rules that are followed by individual businesses |
| Industry Code | Established set of rules that operate at an industry level and set the standards for firms and employees within the industries |
| Ethical Empowerment | The delegation of authority for ethical decision making |
| Advantage and benefits of a code of conduct | - creates uniformity - takes the stress off of employees and helps the organization with respect to the public trust |
| Disadvantages of accountability | Not able to create and nurture good judgement |
| Advantages of accountability | Allows for managers to see what employees are doing, and what they should be doing |
| Accountability | - Is related to the code of conduct - Focuses on rules and regulations instead of judgment which responsibility does. |
| Code of ethics | A formal statement of principle that have to be interpreted and applied to particular situations |
| Code of conduct | Established set of specific and enforceable prescriptions, which eliminate uncertainty, variability, and the necessity of judgment and discretion of a code of ethics |
| Any statement with "ought" or "should" is a | Prescription |
| De Jure value system | Is formally codified |
| A code of conduct forces us to think | About what our values are |
| "what kind of person should I be" | Code of ethics |
| "what should I do" | Code of conduct |
| De Facto value system | That exists in actual fact and is followed and acted upon in good faith, even if it is not officially codified |
| Why is the code of ethics important in running a good business | - way to avoid external regulation - effective way of advertising - gains public trust |
| How does the code of ethics bring de facto and de jure into alignment? | - creates an even playing field - it is an instrument for accountability and responsibility |
| How can a conflict of interest be managed | Transparency - one should be as transparent as confidentiality and prudence allows |
| Identify the 6 principles of professional codes of ethics | - Confidentiality - Integrity - Independence - Diligence - Objectivity - Public interest |
| Harms that arise from conflicts of interest | - They can damage the notion of fiduciary duty in a professional relationship - Trust in a profession can be damaged by practitioners - Can cause/give rise to a wider distrust in society |
| Describe the key features of a profession | Most professions are categorized by a strong sense of Independence which is: - they are not prejudice by the power/influence of those who stand to gain by a specific outcome - Independence is necessary for accountants to act ethically and with integrity |
| 2 Views of Professionalism | - the publics best interest (first priority) - regulation and law are the appropriate constraints |
| Issues faced by accounting professionals | - tax evasion - manipulating financial statements - confidentiality - using insider information for personal gain - integrity in admitting ones mistakes - conflicts of interest |
| Conflict of Interest | When interests conflict and affect a person, regardless of whether the conflict has any effect on that person |
| Constitutive rules | - are rules that define a practice - determines what the practice amounts too |
| Regulative rules | - are rules used external to the practice - regulates practitioners |