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Ethical Issues in Sales

 *Different Approaches to Ethics
• Ethics is a slippery word like ‘justice’
• Golden Rule- Treat others as you would like to
be treated
• Conventionalist Approach – Acts are OK as
long as it is legal or if every one is doing it
• Protestant Ethic – Do what you can defend to
a committee of peers

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 *Different Approaches to Ethics – Contd.

• Market imperative approach- The market will

determine what is right
• Libertine Approach- do what you want as long
as no one gets hurt
• Utilitarian Ethic- Do what has the best
outcome for all involved.

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 *Ethical issues related to ‘sale’
• Related to recognising revenue. When does a
‘sale’ take place ?
• Recording revenue too soon by :-
• Raising a bill without shipping goods
• Shipping goods to someone other than
customer
• Consignment sales
• Transfer to distributor is considered ‘revenue’
• Shipping incomplete or defective goods
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 *Ethical issues related to ‘sale’- contd.

• Shift current expenses to a later period

• Shift current income to a later period
• Shift future expenses to a current period