A Virtue Ethics Perspective Philosophy Essay
Deontological perspective is a rules based perspective where you would determine if an action was ethical or "right" by looking at it as if it were a universal rule and asking if that is something you would want to be done on a large scale. A good accountant from a deontological perspective would think about what they are doing and see if it is something that they would want the entire accounting industry to be doing. If they decided that it would be ok for the accounting industry to do then that particular action is most likely ethical. If they decided that it would not be good for the entire industry to do then it probably is not an ethical action or decision. For example, when Andersen was approving Enron’s Special Purpose Entities (SPEs), the accountants should have thought about what they were doing in the terms of would it be good for the accounting industry or businesses in general to allow these SPEs? They should have realized no it would not be good as an industry standard so it should not be good for an individual firm or business. Finally, what would a good accountant be under a virtue ethics perspective?
A virtue ethics perspective removes the focus away from how an individual follows societal laws and places the focus on the individual’s character. If the individual’s character is perceived to be good then his actions and choices would also be considered good. So a good accountant would be one that a majority of people perceive to be of good character meaning that their actions or choices would be considered good or ethical even if they did not conform to societal laws. The real question comes with what constitutes good character. Obviously everybody has their own opinion about a person’s character but for a good accountant to have good character would probably mean they are well respected based on their extensive knowledge of the profession and have not made many extreme or risky decisions that could get them into trouble. (http://www.ethicsmorals.com/ethicsvirtue.html)
The libertarian perspective prefers less government interference and the freedom of choice. Under libertarianism equality is not the goal but people free to choose how they want to live and act and that will ultimately affect their quality of life. The role of an accountant in a libertarian perspective supporting a "fair and just" society would want the freedom to complete the work for their client as they feel fit and would want less government restrictions on how the work needs to be done and what an accountant can and cannot provide for the client. This would change the current role of an accountant from having a duty to the public who use the financial statements of the businesses the firm represents to the role under the libertarian perspective as having a duty mainly to the business they are auditing. The accountant would have the freedom of choice to determine what would be considered right and wrong with what their client has been reporting. Since libertarianism does not go for individual equality, it may not seem "fair and just". However it does not limit the freedoms of people to make their own choices
The Egalitarian perspective follows the idea of equality where everyone is considered equal. An egalitarian society prefers that everyone is treated equally, reducing economic inequalities. The role of an accountant in an egalitarian perspective supporting a "fair and just" society would be one of equality throughout the entire profession. There would probably not be what is considered the "Big 4" meaning most of the accounting firms would be of a similar size or power due to the push for equality. As far as a "fair and just" society, since egalitarianism is big on equality an accountant would be giving the same (best) advice to all his clients and not just to one or two clients because they pay the most money for accounting services. Also, unlike libertarianism, egalitarianism needs more government "interference" to help make sure that everything remains equal.
Starting with Rawls’ theory of justice, to determine ones actions, he needs to view the outcome of all the possible people those actions could affect and see what it would be like to be affected by those actions. Moving on to what Robert Montgomery stated that "an accountant has one duty to his client and to the public, and that is to disclose to him or for him ‘the truth, the whole truth, and nothing but the truth,’ so far as his abilities and special training to that end enable him to ascertain it" (Robert Montgomery, PWC). This is true because an accountant not only has a duty to provide a service to his client, he also has a duty to make sure the information that his client produces is correct so the end user, the public, can make informed decisions about whether an investment in the client. With that said, this can be supported by Rawls’ theory.
When an accountant is working with his client during an audit, his goal is provide reasonable assurance within his abilities that the client information provided is true and accurate. This is not just for the client itself, it is for the public that could possibly use this information. When a client does something questionable and the accountant is not sure if they should allow it and look the other way, or try to explain to the client that this is very risky and needs to be more conservative, the should not think only about the client’s best interests. The accountant needs to put himself in the position of the public that is ultimately use this information and determine how the risky information could affect somebody’s decision as the public looking to make an investment. If the accountant would feel "cheated" by having that risky information that could ultimately sway him to make a decision that could have negative effects, he should be talking to the client and explaining that this information is not ok and should be changed for the benefit of the ultimate end user, the public.
As C.E. Andrews stated, "Ethical lapses usually start small. But like a snowball rolling downhill, they tend to get bigger, until they can’t be stopped" (Ethics R U: Finding Your Moral Compass). This is exactly what happened with Enron and not only did they disappear, they took one of the largest accounting firms down with them. Now, not to say that Arthur Andersen didn’t have its problems but to effectively shut down the firm for its "involvement" in the Enron fraud is highly extreme.
Andersen was implicated in many of the frauds that some of the most well-known companies committed and they just so happened to be the auditor. A lot of the frauds involved the use of stock options. Most executives owned tens of thousands in stock options for the companies they ran and they figured out that they could make millions by manipulating the workings of their business so that the stock price would stay high. Now, most would say that the auditor, Anderson, should have stepped in and put a stop to this practice; that this practice isn’t ethical or legal. While the ethical implications could be considered questionable due to greed and personal gain being the underlying drivers for this practice, there, at the time, was no law that prevented this practice from happening. So if Andersen had tried to put a stop to this practice, they would have been highly unsuccessful much like FASB when they tried to force a disclosure of the stock option prices to try and curb the option manipulation. The worst part was the fact that when the large corporations had an uproar over the FASB move, THE SENATE sided with the corporations and basically said the hell with regulations and business integrity.
Now with that said, some may still try to blame Andersen and are glad they are gone. Another example of a fraud that Andersen had involvement in and subsequently tried to stop was with Waste Management. WM was messing around with the depreciations of their trucks and dumpsters. Andersen did catch this and bring it to the attention of management. They determined this practice was not acceptable and came up with a plan that would correct this that management and the Andersen partners approved. The real issue is that MANAGEMENT did not correct the depreciation per what was decided on between themselves and Andersen. Andersen thought they had caught and fixed a misstatement and management decided after the fact that it wasn’t going to get fixed. Andersen cannot force the management of WM to make the change they can only bring the issues to their attention and strongly suggest that the changes get made.
I do not believe that Andersen should have been shut down due to their involvement in the multiple frauds. Ethically Andersen didn’t do anything wrong. Their purpose was to provide auditing services to their clients, which they did and their clients were participating in practices that were common-place during that time frame. How could they have prevented the issues with stock options when FASB tried to pass regulations and was shut down by corporations and the Federal Government? The one body that could help pass regulations that Andersen could then help enforce, as a financial policeman if you will, decided that that wasn’t good for business, so what is Andersen left to do? And when Andersen does catch something fishy and brings it to the attention of management for correction, they believed it would be corrected, and management decided to undermine the auditors.
While Andersen was not perfect they were made the scape goat for these frauds when management and the federal government are really to blame for the questionable ethical decisions. And the largest moral issue is that the SEC prosecuted Andersen to the point were no corporate client wanted anything to do with Andersen. Instead of realizing the federal government’s involvement and management’s causes of these scandals, the SEC continued to vilify Andersen, most likely in fear of losing its funding from the federal government. The real moral issues do not lie with Andersen, they lie with management, who got caught up with greed, the federal government who sided with corporations instead of putting a stop to questionable practices, and the SEC who bullied Andersen into submission putting tens of thousands of professionals who, most probably did nothing wrong, out of work. As C.E. Andrews stated, "[In reference to Enron] we asked the right questions. But when we kept hearing the same answers, and that everything was fine, it was very tough to press any harder" (Ethics R U: Finding Your Moral Compass). Because of this Andersen should still be in business today.
It’s safe to say that today’s capitalistic society is a mess of corporate greed, government corruption, and extreme self-interests. Instead of worrying about government taking control of Corporate America and destroying a capitalistic society that was doing so well until the 1980’s, the real worry is that Corporate America is taking control or heavily influencing the government. Every time that the government wanted to pass a regulation that would try and curb the corporate greed and self-interests, the regulations ended up failing due to Corporate America complaining and using it’s insider influences, many of which were former financial executives, to stop the government from limiting their greed. Now where does the accountant fit in to this mess?
The accountants have always had an important job in society. They were considered the financial policemen who are there to analyze and verify the dealings and reportings of Corporate America. Their job could be considered even more important now. With what is going on in this capitalistic society today, the accountants have an even greater moral role than before. Accountants need to remember that they do not only work for the client but for the public as well. Their top priority when auditing their client is determining the ethical implications their dealings and the fairness of their reporting and how it will affect the other client, the public. When an accountant determines that something is unethical or unfair, this is where they need to put a stop to it and not take the easy way out and ignore its existence. They really need to think about the consequences, how and who this will affect and be that last line of ethical defense before the public gets hold of this information and the real damage can happen.
With Corporate America basically being in bed with the government, who helps set standards for the accounting profession as well as setting corporate regulations, the accountants will need to stand their ground when it comes to their ethical reasonings for deciding what is fair and what is not. They need to fight for what is right and not let Corporate America bully the government into not passing regulations that are intended to help clean up this mess that the corporate self-interests and greed have caused in today’s society.
Egalitarianism strives for economic, social, and political equality. On arrival to Egalitaria, Professor Caritat would most likely see a very uniform environment. The houses and buildings will most likely look the same so everything will be equal. When it comes to the citizens, they are all treated as equals regardless of race, religion, or gender. They may work different jobs some that pay more than others, however, with the focus on equality, there would be a redistribution of wealth. This redistribution of wealth would mean that the government has set a standard of living, which would be an amount that each person would be entitled to live on and any excess they have earned over that amount would be collected and redistributed to the people who have not met that threshold yet. When there are political issues that are brought up, each person would get an equal vote, but the issue would not pass if it would then create an inequality for the citizens of Egalitaria. The biggest issue that Egalitaria would face is that some people may not be inclined to work since they are going to be given an equal share of wealth like the rest of the citizens.
What set of ethical principles would be included in my "moral compass?" Well let’s start with the golden rule, ‘Do to others as you would want done to yourself’. This is one of those principles that would be extremely important as an accountant since you not only have a duty to your client but a duty to the public who will ultimately use the client produced information, you need to think about what it would be like in their shoes using that information. You would want to make sure that you would not let false or manipulated information sneak through since you, as a potential end user, would want the most accurate information at your disposal. You want to make sure that somebody else who is actually going to use the information gets the same type of information you would demand as an end user. As the theory of justice perspective states you want to view a person as an ends in themselves, not as a means to an ends.
When faced with an ethical dilemma I would not only want to view a decision from the perspective of the people the decision could affect, I would want to look that the potential solution in the context of if it was a universal law, would I be ok with that. As the deontological perspective believes that this is a necessary tool to help determine if your decision is ethical or not by looking at it from the angle of if I can do it, then what happens if everybody can do it, and would this be good or bad? This would help me when faced with an ethical dilemma brought on by a client and needing to determine if I should allow something or not. By following this tool, it would help me come to the right conclusion.
Lastly, when faced with an ethical dilemma I would to view the potential consequences of a solution to the dilemma. Unlike the deontological perspective where you look at a solution as a rule and it being right or wrong, ignoring the potential consequences, the teleological perspective looks at the potential consequences to determine if a solution is right or wrong/good or bad. When faced with an ethical dilemma, I want to be able to analyze the potential consequences so that when my decision is made, it is not going to cause even more dilemmas or get me into a lot of unwanted trouble.
I have decided that looking at the effects of a solution to an ethical dilemma from the view of somebody who could be affected by my decision, determining if the solutions would be acceptable as a universal law, and finally determining if a solution is good or bad based on any potential consequences are all part of my moral compass. I feel that these three tools together will help me analyze an ethical dilemma effectively enough to make a right decision. This is true because you would not want something bad to happen to yourself, so why let it happen to someone else, why do something that you would not want as a universal law, and finally a solution may sound good but the consequences could have disastrous effects.