ACCG100 Lecture Notes - Lecture 2: Financial Statement
1 Sep 2018
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Professor
Week 2: Ethics
What is ethics?
"In broader sense, deals with human conduct in relation to what is morally good and bad,
right and wrong. It is the application of values to decision making. These values include
honesty, fairness, responsibility, respect and compassion." (institute of Global Ethics) -> what
you believe is important
Ethical theories
- Prescriptive principles or rules determining right from wrong
o Beliefs about how people 'should' behave
o Principles and methods are used as a guide for avoiding and resolving
ethical issues
- Two classifications
o Teleological/consequential ethics
▪ The consequences of a decision or action is the sole determinant of
what is right and wrong
▪ A morally correct action occurs when benefit outweigh costs
▪ How you get the result is less important than the outcome itself
▪ Eg telling a lie is OK if people benefit at the end of the day
▪ Limitation: tends to be a selfish approach to ethics. Emphasis is
placed on the individual or majority which may be unfair to the
minority or may abuse individual rights
o Deontological/non-consequential ethics
▪ Consequences are not important
▪ The intention to do the right thing is more important than the final
result
Document Summary
"in broader sense, deals with human conduct in relation to what is morally good and bad, right and wrong. It is the application of values to decision making. These values include honesty, fairness, responsibility, respect and compassion. " (institute of global ethics) -> what you believe is important. Prescriptive principles or rules determining right from wrong: beliefs about how people "should" behave, principles and methods are used as a guide for avoiding and resolving ethical issues. *audit = one accountant checks over another accountants work* *misstatement = when you make an error in your financial report, a wrong number: conflict of interest, of different stakeholders. Jenny, steven, shareholder of abc trading, audit firm, bank, creditors, potential investors. Stakeholders will think the business has a better inventory position than it actually has, as the inventory value is significantly overstated. This could affect the decision-making of stakeholders as they do not have reliable information.
