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ACCT 2010

Personal Ethics and Financial Reporting

By Sergio Lopez-Peralta

Ethics is a concept that I would argue is no easily defined. It is dependent heavily on

external factors that influence it. By definition, ethics is the moral principles that govern a

person's behavior or the conducting of an activity, the hard part about this concept is the

concept of moral and who defines what is morally acceptable. Ethics in business is defined as

the ...proper business policies and practices, so a set of rules that would be considered

acceptable yet still unclear as to who defines what is proper. More importantly, who

defines proper when faced with a decision that might contradict what is personally proper, and

professionally proper? In philosophy, ethics is concerned with questions of how people

ought to act. So more of a case by case basis influenced by external cultural factors?

Is a vaguer approach to what would be acceptable assuming external circumstances or

environment a proper way to define ethics? These key questions and terms are not easily

defined or answered. One thing is certain, ethics, is heavily influenced by region, religion,

circumstances, laws, and other social factors. I would argue that at times we accept a reality of

ethics as it is socially constructed whether by our colleagues, superiors, law makers, or others

whose definition of proper or moral might oppose our own personal definition of those


Factors that have influenced my own definition of ethics revolve around my upbringing.

The cultures and environments that I have been exposed to have influence how I personally
judge what is morally acceptable and what is not. The first of these environments being my LDS

faith where morality and ethics is defined under the magnifying glass of what God would deem

right and wrong. The argument is that your life depends a lot more on the principles that you

choose to follow than the external circumstances of your life. (Bishop Gerald Causse) These

principles involve honesty, integrity, charity, and humility to name a few. They are a way that I

have been able to personally make choices that are in line with what I would deem as ethical

behavior. Pair this with the Latin American culture of my upbringing involving hard work,

creativity, fun and family, and you have an interesting mix. I use these principles to determine

what is moral and proper in any circumstance. Though I would argue it is easier said than done

when faced with circumstances where what is moral or acceptable is blurred by rules and

regulations established by others whose viewpoints may differ in these areas.

This is no different in the financial realm. What is ethically acceptable in different

circumstances has been outlines by a diverse group of people over an extended period of time.

Individuals in the financial world must accept this way of thinking or at least follow the rules

and regulations in this environment. Depending on the principles you choose to adhere to this

might be a difficult task. Even when following what is considered acceptable or proper you

might not be following religious, or social norms for what is moral and acceptable. This is clear

when faced with a decision to follow what a superior has asked you to do in reporting or follow

you own personal moral compass. It might be a decision between feeding ones family who

hasnt eaten for some time, or following what is personally moral. Even then this example is a

poor representation of a clearly defined ethical decision separating what is

personally/professionally right and wrong, youre faced with personal and professional

principles on both fronts that might contradict one another.

Though I would like to highlight one important thing in this debate regarding morals,

principles, what is right, wrong, and who draws these lines in the sand. Certain principles, I

would argue, are personally acceptable as right. Honesty is a clear example of this, if an

individual in the financial realm values the principle of honesty, both personally and

professionally he will be honest in his dealings with other adhering to principles that are

acceptable in the financial realm. The question in the financial industry should be what

principles and individual is choosing to adhere to. The task then becomes drawing a clearly

defined line in the sand. The goal then is to avoid blurring that line and maintaining

consistency in following what is ethical behavior.