Accounting Ethics Exam WITH LATEST UPDATE

What are the hallmarks of a profession? - extensive training & continuing education - intellectual in nature - specific professional code of ethics & standards - certified/licensed - provide services to society - autonomous/self-regulated - representation by bodies According to a survey conducted by CGMA Magazine, what are the three highest-ranking attributes of a professional? - having expertise/specialized knowledge - acting ethically (deliberately) & influencing others to act ethically - hold themselves to high standards - strong reputation & credibility Beyond their technical skills, what value do accountants add to the professional services they provide? Personal ethics which are influenced by: - colleagues - upbringing & family - religion - culture - environment - friends - laws Why is it important for an accountant to maintain credibility and what must he do to maintain credibility? - Their individual credibility directly relates to their firm - Credibility is their reputation and creates trust amongst their clients and their colleagues Maintain credibility by being free from conflicts of interest, having no bias, follow the rules, and know the standards Maintain competence & ethics = maintain credibility What are the two core ethics philosophies? Consequentialism: focuses on the consequences of one's ethics (the means justify the ends) considers how the marginal benefits and costs of a decision affect society as a whole, rather than just the impact on a single company Deontology: focuses on duties; if you fulfill your duties, you are acting ethically regardless of the consequences; people innately owe certain duties to each other and should conform to this mandate, without regard to how their actions impact society Explain Consequentialism generally and Utilitarianism specifically, including criticisms. Consequentialism focuses on the consequences of one's ethics. Utilitarianism-- an act is ethical if, on balance, it improves the overall well-being (utility) of all members of society; greatest good for greatest number of people. 3 Step Process of Utilitarianism-- 1. identify all stakeholders (people who are affected by your decision) 2. perform a cost/benefit analysis 3. weigh the cost/benefits and figure out which decision would have the most positive effects on the most people Criticisms of Utilitarianism: - analysis doesn't consider the degree of the costs/benefits - considers only the ends, not the means - although it produces a net benefit, it may not be ethical - may sacrifice minority for the majority