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Ethics: a brief discussion

Ethics: a brief discussion. Ryan Peterson, PhD, CMA University of Central Missouri. What is ethics?. What is ethics? moral principles that govern a person's behavior or the conducting of an activity (what is acceptable) Do laws define ethics? Not exactly…. Disclaimer: I’m no expert.

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Ethics: a brief discussion

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  1. Ethics: a brief discussion Ryan Peterson, PhD, CMA University of Central Missouri

  2. What is ethics? • What is ethics? • moral principles that govern a person's behavior or the conducting of an activity (what is acceptable) • Do laws define ethics? • Not exactly…

  3. Disclaimer: I’m no expert “I don’t subscribe to a code of ethics. A code of ethics only makes it easier for people like me to take advantage of you.” https://www.youtube.com/watch?v=o0tUZ6lmnls

  4. Can ethics be taught? • Bobek, et al. (2017, BRIA) • Ethical environment of CPA public accounting firms are perceived as stronger than CPAs working in industry • Ethical environment of big 4 is perceived to be more ethical than non-big 4. • Lu and Lin (2014) • Perceptions are positively associated with ethical behavior • Mayer et al. (2010) • Perceptions are negatively associated with misconduct

  5. Can ethics be taught? • Ethics & Compliance Institute (The State of Ethics & Compliance in the Workplacereport)

  6. But… why does it matter? • ''What about us?'' said Sandra Stone, 51, an executive assistant who lost a $49,000-a-year job and Enron stock rewards that were valued at $150,000 at one point.

  7. So it matters… how do we teach it? • How do we teach it?

  8. AICPA Code of Professional Conduct By accepting membership, a certified public accountant assumes an obligation of self-discipline above and beyond the requirements of laws and regulations.

  9. IMA Statement of Ethical Professional Practice • “Members of IMA shall behave ethically. A commitment to ethical professional practice includes overarching principles that express our values and standards that guide member conduct.“ • Principles • Honesty, Fairness, Objectivity, and Responsibility • Standards • Competence, Confidentiality, Integrity, and Credibility

  10. Is a didactic approach effective? • Reading a code of ethics to students is quick • They can memorize it fairly easily • … • It has little to no effect on their decision-making

  11. Alternatives? • Use examples • Personal experience • Discuss personal values (wealth, civic duty, integrity, etc) • Paying taxes, voting, jury duty, etc) • Use smaller felonies than larger • Controversy is good for discussion and discussion is good for exploring ethics • https://www.youtube.com/watch?v=jy8b6QehChc

  12. Giving Voice to Values • https://youtu.be/U9t4KQYcO6M

  13. To Break Ships or Not to Break Ships • “Explosion at Pakistan Ship Breaking Yard Kills More than 10 People” • Us Companies are some of the companies outsourcing this work • US ship breaking operations are safe and profitable, largely driven by contracts with the US military

  14. To Break Ships or Not to Break Ships - summary • A long established US boat breaking company experienced losses after many successful years • Hired a new CFO who expanded the company to recycling and exported the boat breaking operations to Pakistan, ship breaking name change • Recycling is cyclical and experienced a downturn, causing losses, but kept afloat by outsourced ship breaking operations • Ship breaking operations experience a major event that killed and injured workers • CEO must decide to continue operations or risk the loss of thousands of jobs in Pakistan and the US and declare bankruptcy

  15. To Break Ships or Not to Break Ships - Goals • Students can identify the ethical dilemmas and stakeholders in a real-world case • Students can identify decisions available to the decision maker and the ethical consequences of those decisions • Students can suggest a course of action and support their decision by applying the IMA Statement of Ethical Professional Practice

  16. To Break Ships or Not to Break Ships - questions • Identify the ethical dilemmas presented in the case • Review the IMA SEPP and discuss the standards most applicable when selecting a course of action • What are the CEO’s responsibilities as the CEO and chairman of the board? • Discuss whether there is conflict between CEO’s responsibilities to SBSRC identified in question 3 and committing to the IMA SEPP • Critically evaluate the alternatives and discuss what alternative you would select if you were the CEO • Develop and present a fourth alternative to the alternatives presented above

  17. Ship breaking industry • More than 800 large ships are broken up each year, the vast majority on Asian beaches. Owners can earn an extra $1M to $4M per ship (~1.6B) when selling to Asian yards via cash buyers, instead of opting for recycling yards with higher standards,” says Jenssen. “No one forces the industry to send ships to be dismantled there. They choose to send them” • Thousands of workers have been killed or maimed dismantling the world’s ships

  18. Has Ethical Behavior Changed or Improved? • Ethics & Compliance Institute (The State of Ethics & Compliance in the Workplace report)

  19. Has Ethical Behavior Changed or Improved?

  20. Questions/comments?

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