Introduction
Ethics are defined in the field of accounting and finance as the generally agreed code of conduct in the society. It is conventions in a society whose breach can result to a firm or an individual be segregated from the other stakeholders as their behavior would be viewed as being inappropriate (Baiada, & Garmilis, 2014). While many entities have a general understanding of what constitutes ethics, defining ethics is not always easy as what is perceived to be ethical in one society differs from what is viewed as being ethical in another. Therefore, the accounting and finance profession has to adopt a definition of ethics that surpasses societal differences. In this particular case, the focus will be on utilitarian ethics and deontological ethics. Utilitarian ethics indicates that actions that increase happiness and pleasure among individuals are ethical. It thus does not consider the effect of such behavior on other stakeholders other than the doer. In deontological ethics, the emphases are on individuals abiding by their duties. They can thus be defined as duty-based ethics. The main focus of this study is on these two theories as employed in the accounting and finance profession. It is worth noting that utilitarianism would be too myopic in the field of accounting and finance as it disregards the interests of other stakeholders, a weakness that is addressed through the use of the deontological ethics.
Evaluation of ethics dimensions
Utilitarian ethics
Utilitarianism is a normative form of view on ethics whose locus of behavior and individual activity is based on the outcome. It recognizes the role that pain and pleasure play in human life. Good is associated with pleasure while bad behavior is associated with pain. Nevertheless, the theory has been viewed as one that lays low emphasis on consequences of behavior and the theory may be used to justify immoral acts (Hasan et al 2013).
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Organizational culture in accounting
The utilitarian theory in accounting has some merits when it comes to organizational culture in accounting. For instance, accountants and auditors need to ensure that financial statements are well developed and would not be erroneous, something that would attract reproach from finance managers, shareholders, and the government. At the same time, utilitarian ethics requires that the organizational culture in accounting should not result to displeasure or pain in the future. Consequently, it would be important to ensure that the accountants develop accounting information that is truthful.
In spite of the above positive elements in utilitarian ethics, it is evident that this approach can be exploited to the disadvantage of the accounting culture. Individuals may opt to enhance pleasure by misreporting accounting data to increase their bonuses or avoid reproach from human resource department due to over performance. Top management may be tempted to increase their pleasure by misreporting when the entity is poorly performing to avoid a decline in stock prices or their bonuses (Hasan et al. (2013).
Christian worldview on ethics
The Christian ethics is based on theological and biblical underpinnings. What is good is what is said to be good as indicated in the bible. The Bible clearly indicates what is wrong and what is right. The eternal order of morality is thus viewed as the best bases of ethics. The utilitarian approach to ethics tends to be in line with Christian view in some limited ways but largely does conflict with it. For instance, people should not hurt others to derive pleasure. Accountants should not engage in misreporting to enhance their bonuses or share prices. The utilitarian approach to ethics indicates the need for individuals to focus merely on pain and pleasure. While some things must be painful, people are obligated to do them as it is their duty. It would be pleasurable to hurriedly prepare financial statements and go for an outing. Nevertheless, it is the duty of accountants to act diligently and with highest levels of professionalism. The utilitarian approach to ethics thus conflicts in a big way with the Christian approach to ethics (Martinov-Bennie, & Pflugrath 2008).
Deontological theory
Deontological theories are based on duty, where individuals are expected to adhere to the duties assigned to them . The focus of this approach to ethics is how right or wrong an action is rather than how right or wrong the consequences of such actions are. Actions are thus not to be justified by the consequences. Kant developed some of the most prominent theories in ethics of duty. For instance, people have a duty to respect the rights of others.
Organizational culture in accounting
According to the culture of accounting entities, the ethics of duty are very applicable. Accountants are expected to operate in a manner that conforms to the accounting provisions as well as accounting code of conduct. The accountants have the duty to act with the high level of respect to the interest of the stakeholders, act in an accountable as well as transparent manner. According to the accounting code of conduct, accountants, as well as financial officers, are expected to exhibit professionalism in the manner in which they prepare financial data and in reporting (Baiada, & Garmilis, 2014). Failure to act in these ways would thus lead to unprofessional accounting and misreport, something that utilitarianism may treat as being right as long as they derive pleasure. The ethics of duty reminds the accountants on the importance of remaining committed to the code of conduct, as well as what is reasonably viewed by humanity as being ethical. When an organization develops a culture where everyone is honest, transparent and acts with high level of professionalism and integrity, the organization is likely to develop good work environment and receive minimal backlashes from the stakeholders since their needs would have been consistently met ( Ogbonna, & Ebimobowei 2011).
Christian worldview on ethics
Under the Christian worldview, there can never be better morality than that explained in the bible. As some philosophers indicate, just as humans have not been able to develop another sun or humans among other natural elements so can they not be able to develop moral guidelines that surpass the morals and ethical values that are advocated for in the New Testament. Moreover, matters of the morality and spirit surpass such physical examples as they have eternal potential. The ethics of duty are thus very relevant when it comes to its application in accounting and congruence with the world Christian view. Just like the morals from the Christian view, deontological theories of ethics calls on individuals to act in a manner that respects the rights of other people in the society. Through acting in a manner that is consistent with professionalism, honesty, integrity, and transparency, the deontological theories propagate what is already entrenched in the Christian view on ethics. From the American Institute of Certified Public Accountants calls for individuals to act in a manner that is consistent with this view of ethics (Su, et al. 2010).
Just like the Christian view on ethics, and the ethics of duty, the American Institute of Public Accountants requires that the members should act in a manner that is consistent with a sound professional as well as moral judgments. The code of conduct indicates that the professionals have clear roles and duties that they ought to play in the society. The codes also require that accountants consider the public interest in the execution of their accounting tasks. Just like the Bible indicates, people should love one another as they love themselves. The Christian view offers individuals with one of the strongest commandments of love. This rule is supported by the AICPA codes of conduct when the codes indicate a need for the players in the accounting profession to care about the interest of other stakeholders as opposed to purely focusing on self-interest. The codes equally require that individuals enhance their integrity while dealing with accounting information as well as accounting stakeholders. Through such a move, the public confidence in their actions will be enhanced, enabling them to perform all professional tasks with high level of integrity. It is through operating with integrity that public trust would end up being enhanced (Su, et al. 2010).
Conclusion
From the above presentation, it’s clear that ethics is an important element in the accounting profession. From the above ethics theories, it is evident that the deontological theory of ethics is a superior source of information for accountants and the accounting profession. Utilitarianism has the potential of influencing professionals in accounting to subordinate public interest to their interest. As a result, though they may end up deriving pleasure for themselves, other people would end up suffering. Deontological ethics indicates a need for professionals in accounting to remain committed to their duty of respecting other people, honesty, transparency, integrity, and objectivity in their operations. The implications are that they would end up carrying out their duties in a manner that is consistent with the Christian view of ethics, where people are expected to act in a manner that is mindful of the interest of the other stakeholders in the society. In a nutshell, the deontological ethics of duty is the most reliable and effective model that can be relied on by accountants in their day to day operations.
References
Baiada, L., & Garmilis, G. (2014). Accounting professional’s ethical judgment and the institutional disciplinary contact L: A French-US comparison. Journal of Business Ethics , 10(1), 1-10
Hasan, A. et al. (2013). Ethics and ethical theories from an Islamic perspective. Journal of Accounting 4(1), 1-13
Martinov-Bennie, N., & Flugrath, G. (2008). The strength of an accounting firm’s ethical Environment and the quality of auditors’ judgments. Journal of Business Ethics, 87(1), 237–253.
Ogbonna, G., & Ebimobowei, A. (2011). Ethical compliance by the Accountant on the quality of Financial Reporting and Performance of Quoted Companies in Nigeria. Asian Journal of Business Management 3(3), 152-160
Su, et al. (2010). Cross-cultural differences and accounting ethics: An empirical study for accounting students. International of Organizational Innovation , 2(3), 161–185
