MFR

Introduction to Professional Values, Ethics, and Attitude Part 1

Accounting Scandals: Then and Now

• Enron
o Known for their grand scheme of fraud performed by professional accountants
• Wirecard
o Financial technology company based on Germany
o Philippines is involved because Wirecard declared that they have financial instruments
in some Philippine banks which was denied by these banks

Ethics

• branch of philosophy that involves defining, developing, defending and recommending concepts
of what is right and wrong
• "Ethos" means character (Greek)
• "Moralis" means customs (Latin)
• we behave in conformity in what we think is right and avoid what is wrong
• personal ethics: own notion of what is right and wrong.

Branches of Ethics

• Normative Ethics
o Dwells on the question what should be right and wrong conduct?
o there are three approaches in normative ethics:
▪ outcome (cost savings)
▪ agent or the person (owner of the business and his values)
▪ relationships of the agent (duty of the agent to his stakeholders)
• Metaethics
o What is meant by “good”?
o If normative ethics is the rules, then metaethics is the foundation
o foundation and definition of the rules
o dilemma of Socrates: euthythro (is the pious loved by the gods because it is pious or is it
pious because it is loved by gods?)
▪ is the thing good because of a higher being tells us that it is good? (referent)
▪ or is the thing good in itself that's why its I loved by the higher beings?
(inherent)
• Applied Ethics
o Focuses on how to resolve controversial issues
o bioethics, business ethics, and accounting ethics
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Ethical theories

• Utilitarianism
o Focuses on the most benefit for the greatest number of people
o Straightforward approach that focuses on the outcome
▪ Act utilitarianism
➢ Examines the act itself if it will be beneficial to the greatest number of
people
▪ Rule utilitarianism
➢ Choose the action that conforms to the general rule
• Deontology
o Focuses on the duties or obligation of a human being to others
▪ Rule Deontology
➢ Treats duty as a general rule
▪ Act Deontology
➢ Treats duty as an act only
• Virtue Ethics
▪ Focuses on what is in line with the good character (principle based)
▪ agent-centered, meaning that goodness is not in the act but in the person: we
judge whether the agent is by habit and by character a good or virtuous person.
➢ Primary/ Cardinal virtues
✓ Wisdom/ prudence – charioteer of all the virtues
✓ Courage
✓ Temperance - trying to weigh what is the appropriate action for
a specific decision
✓ Justice