Discuss The Ethical Choices In Each Situation

Discuss The Ethical Choices In The Situations Below In Each Instance

Discuss the ethical choices in the situations below. In each instance, describe the ethical dilemma, determine the alternative courses of action, and tell what you would do.

Paper For Above instruction

The following paper examines five distinct ethical dilemmas faced by professionals in the fields of accounting and auditing. It explores the nature of each dilemma, considers potential courses of action, and provides a reasoned stance on what the ethical decision should be, grounded in professional standards and ethical principles.

1. Confidentiality and Personal Relationships in Payroll

The first scenario involves a payroll accountant who is approached by a friend requesting information about another employee’s hourly wage. The core ethical dilemma centers on confidentiality and the professional obligation to maintain employee privacy. A payroll accountant has access to sensitive compensation data, and sharing that information, even with a friend, violates confidentiality agreements and professional ethics established by accounting and human resource standards. The alternative courses of action include revealing the information, which would breach confidentiality, or refusing to disclose it, thereby upholding integrity and privacy. I would prioritize confidentiality, explaining that sharing employee payment details is unethical and possibly violates company policy. Upholding trust and fairness within the workplace is fundamental, and breaching confidentiality could damage professional integrity and organizational credibility (AICPA, 2014).

2. Misuse of Reimbursement Funds

The second case concerns an accountant who uncovers that receipts submitted by a branch manager for reimbursement appear to be personal expenses rather than legitimate business costs. The ethical dilemma revolves around honesty, integrity, and professional responsibility. Submitting false reimbursement claims constitutes fraud and violates policies, ethical standards, and legal obligations. The accountant faces the choice of reporting the misconduct, risking conflict or concealment, or ignoring it, which would compromise ethical standards. I would advocate for reporting the issue to the appropriate internal authority or compliance officer, emphasizing the importance of accuracy and honesty in financial reporting (IFAC, 2018). Addressing such misconduct preserves organizational integrity and aligns with ethical principles of honesty and accountability.

3. Gifts from Suppliers and Bribery Concerns

The third scenario involves an accountant discovering a gift—an expensive ham—from a supplier, during contract deliberations. This presents an ethical dilemma related to conflicts of interest and potential bribery or influence peddling. Accepting gifts from suppliers can be construed as accepting inducements that might sway business decisions, compromising objectivity and integrity. The alternative courses include accepting or declining the gift. Given the potential for ethical conflicts and violation of anti-bribery standards, I would decline the gift and document the incident, adhering to organizational policies and professional ethical guidelines aimed at preventing conflicts of interest (CFA Institute, 2019). Transparency and integrity must guide ethical decision-making here.

4. Time Management and Honesty in Audit Performance

The fourth case involves an auditor who is unable to complete a designated audit task within the allotted time due to insufficient experience. The ethical dilemma pertains to honesty, transparency, and professional competence. Working late to complete the work without informing others might temporarily conceal the issue but risks substandard audit quality. Conversely, admitting the limitation could lead to resource reallocation or additional support, aligning with ethical standards of due care and professional competence. I would advocate for honesty, informing supervisors about the limited experience and requesting additional time or assistance. Upholding integrity and transparency is vital to maintain trust and ensure that audit work meets professional standards (AICPA, 2015).

5. Personal Investment and Conflict of Interest

The final scenario involves a CPA with a small inheritance of stock in a company now a client of their firm. The ethical dilemma centers on conflict of interest and disclosure obligations. The potential for bias exists, especially if the client’s success or failure could significantly impact the value of the inherited stock. The ethical course involves full disclosure of the ownership interest to the firm’s management and adherence to independence standards. Ignoring this investment may violate ethical guidelines, including those outlined by the AICPA, which emphasize transparency and objectivity. I would disclose the stock ownership, recuse myself from any engagement related to the client if necessary, and adhere to professional independence standards to prevent any bias (AICPA, 2015).

Conclusion

Each of these professional scenarios underscores the importance of transparency, integrity, confidentiality, and adherence to ethical standards. Ethical decision-making involves evaluating the potential impact of each action, consulting relevant codes of conduct, and choosing the course that best upholds professional integrity and public trust. Upholding these principles not only aligns with legal and professional requirements but also sustains the credibility and reputation of the individual and organization involved.

References

  • American Institute of Certified Public Accountants (AICPA). (2014). Code of Professional Conduct. New York, NY: AICPA.
  • International Federation of Accountants (IFAC). (2018). Handbook of the International Code of Ethics for Professional Accountants.
  • CFA Institute. (2019). Standards of Professional Conduct. Charlottesville, VA: CFA Institute.
  • American Institute of Certified Public Accountants (AICPA). (2015). Clarified Statements on Auditing Standards. New York, NY: AICPA.
  • Loeb, S. (2017). Ethical Decision Making in Accounting. Journal of Business Ethics, 142(3), 477-490.
  • Beard, D., & Burrowes, P. (2019). Ethical Challenges in Contemporary Accounting Practice. Advances in Accounting, 45, 100-110.
  • Albrecht, W. S., Albrecht, C. C., & Albrecht, C. O. (2020). Fraud Examination. Cengage Learning.
  • Crusoe, D., & Salama, A. (2016). Ethics and Integrity in Financial Reporting. Journal of Management & Governance, 20(4), 857-872.
  • Power, M. K. (2018). Ethical Decision Making in Auditing: An Integrated Framework. Auditing: A Journal of Practice & Theory, 37(2), 247-263.
  • Wiley, J. (2020). Professional Ethics for Accountants. Wiley Publishing.

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