Ethical Issues in Accounting

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Virginia Danko

BUS670 – Legal Environment

Ethical Issues in Accounting

Dr. Dixon

October 1, 2012

Ethical Issues in Accounting

Business Ethics is the study of proper business policies and practices regarding potentially controversial issues, such as corporate governance, insider trading, bribery, discrimination, corporate social responsibility and fiduciary responsibilities. Business ethics are implemented in order to ensure that a certain required level of trust exists between consumers and various forms of market participants with businesses (

Business ethic theories include the moral principles or codes a company implements to ensure that all individuals working in the company act with acceptable behavior. Business owners and managers can use ethics theories that are appropriate for use in their operations. A few different business theories exist, rights theory, justice theory, utilitarianism, and profit maximization. Each theory includes specific traits or characteristics that focus on specific ethical principles that can help companies correct business issues (Mallor, Langvardt, Bowers, Langvardt, 2010).

Rights ethical approach identifies certain interests or activities that one’s behavior must respect. Each person has a fundamental right to be respected and treated as a free and equal rational person capable of making their own decision. The principle states: “An action or policy is morally right only if those persons affected by the decision are not used merely as instruments for advancing some goal, but are fully informed and treated only as they have freely and knowingly consented to be treated"(Velasquez, Andre, Shanks, S.J., Meyer, 2010).

The justice ethical approach is where all humans are treated equally through society, regardless of rank, position, class, creed, or race. This is also known as the fairness approach in business ethics theories. If people are not...