Ten ethical perspectives
Ethical perspective Summary of ideas Driving value Moral implications Accounting and
auditing application
Self-Interest
(Protagoras)
Society will be better
off if we pursue our
own self-interests
without interfering
with the rights of
others.
Perceived
personal
self-interest.
Self-serving
bias may color
weighting
of values.
Self-serving bias was at
the heart of the
recent debacles
involving Enron,
WorldCom, etc.
Utilitarian benefits
(Bentham and Mill)
A law or an act is
‘‘right’’ if it leads to
greater net social
benefits than social
harms.
Pursuit of the
greatest good
for the greatest
number.
Self-interests,
conflict, and
harm are difficult
to assess.
Long-term and short-term
benefits may be worlds
apart – and may
not have readily
apparent consequences.
Personal virtues
(Plato and Aristotle)
Individuals must adopt
a set of standards that
govern relationships
and that model
virtuous behavior.
Others are
owed proper
treatment.
Virtuousness
may be difficult
to both define
and attain.
Keim and Grant (2003)
suggest that key virtues
of courage and integrity
preserve auditing’s intent.
Religious Injunctions
(St. Augustine)
Compassion and
kindness must
complement honesty,
truthfulness, and
temperance.
Reciprocity
and compassion
build comm
unity
Religious
attainment of
excellence is
rarely achieved.
The Golden Rule,
identified as a key
religious construct, applies
to auditing intent.
Government
Requirements
(Hobbes and Locke)
Basic rules are
derived
from a central
authority that has
the ability to enforce
those rules.
Law representing
the minimal
moral standards
of society.
Rules and laws
are often inadequate
at articulating
ethical practices
or intent.
Governmental and
professional FASB standards
have traditionally been
rule-based in practice.
Universal Rules
(Kant)
Inspired rules govern
action resulting in
greater good for
society.
Rules that
eliminate the
self-interest of
those deciding.
Rules must be
applicable to
everyone.
Rules and principles
must intermesh to achieve
desired intent.
Individual Rights
(Rousseau and
Jefferson)
An agreed upon
list of guaranteed
rights ensure
freedoms.
Actions that
protect
individual
guaranteed
rights.
Eliminating the
decision maker’s
bias is not
possible.
Stakeholder rights may not
have been part of the measured
outcome but are becoming
more important.
Economic Efficiency
(Adam Smith)
Maximize the output
of needed goods and
services by setting
marginal revenues
equal to costs and
maximizing profits.
Economic
efficiency.
Basic rights
are meaningless
without core
essentials of food,
clothing,
and shelter.
Auditing must be thorough
enough to identify the
costs to society for financial
misrepresentations.
Distributive Justice
(Rawls)
Never take an action
that harms the least
among us in any way.
Disadvantaged
owed a Social
Contract.
The market may
unjustly distribute
goods and services.
Misreporting in financial
statements and audits may
harm society – evidenced
in the aftermath of
recent events.