Ethical Issues

Ethical Issues

Issue

Universally applicable accounting conventions and standards dictate that accounting information must be recorded and presented in a thorough, fair and honest manner. The misrepresentation of accounting data is considered to be a serious criminal offense and it is punishable by imprisonment. Since the CEO of the small rural bank has asked me to overlook certain conventions in the recording and presentation of accounting data, I am confronted with a serious ethical dilemma where I have to decide whether to do what is ethically justifiable or what I have been instructed by the CEO.

Rule

Four classical ethical theories have been used to assess the ethicality/unethicality of the action:

Categorical Imperative

Immanuel Kant founded this philosophy and established that the validity or claim of any moral law which is absolute and unconditional for all agents does not depend on ulterior motives (Vesilind & Gunn, 1998). Hence, categorical imperative is starkly different from hypothetical imperative which is mainly associated with human desire.

Utilitarianism

Utilitarianism is an ethical theory that essentially assumes three proposals - what is intrinsically valuable for individuals, the best state of affairs is one in which the sum of what is valuable is as high as possible, and what we do is that which gets the best state of things according to this (Vesilind & Gunn, 1998). Thus, the morality of any action or law is defined by its utility for sentient beings together. Utility is a word that refers what is intrinsically valuable to each individual. In neoclassical economics, utility is called preference satisfaction in moral philosophy, means happiness, regardless of the way in which this is understood (Vesilind & Gunn, 1998).

Veil of Ignorance

The original position is a hypothetical situation developed by the philosopher American John Rawls as a thought experiment in his theory of justice, and seeks to accurately reflect the principles of justice (the liberty and equality) would be the manifestation of a democratic society, based on free and fair cooperation between citizens, including respect for freedom, and interest in reciprocity (Scott, 2009). In order to nullify the effects of specific contingencies which put men in unequal situations and then negate the temptations of exploiting natural and social circumstances to their own advantage, Rawls assumes that in the original position the parties are placed under a veil of ignorance so that they remove their personal biases and prejudices when making the decision (Scott, 2009).

Aristotle's Golden Mean

This particular ethical theory emphasizes that ...