Essays --

Deontology and Utilitarianism in the Accounting Profession The American Association of Public Accountants first implemented ethical rules in 1905. Since then, accounting ethics has been heavily scrutinized. It has been said "that the relationship between personal values, codes of conduct and decisions to engage in financial misrepresentation are 'weak at best'" (Douglas, Davidson, & Schwartz, 2001), p. 101). It is essential for Accountants to make ethical decisions. In order to promote ethical decision making, it is vital that profession develop a strong ethical environment. The purpose of this paper is to look at two of the main ethical theories as they relate to the accounting profession. Specifically this paper will give a detailed description of utilitarianism and deontology. The organizational culture and the American Institute of Certified Public Accountants code of professional conduct will then be looked at from the context of the two ethical theories. Finally, I will present the ethics system I believe is most appropriate f or the accounting profession.†¨ 1.0 Utilitarianism The term utilitarianism, as defined in this paper, is not a psychological theory that is based on what is. Instead, it is an ethical theory based on what should to be. Utilitarianism, also called universalistic hedonism, should not be confused with "Egoism or Egoistic Hedonism (which states the agent's [individual's] own happiness as the ultimate end of his actions" (Sidgwick, 2000, p. 254). Instead, utilitarianism is an ethical theory that advocates the idea that the happiness of some must, at times, be forfeited for the benefit of the larger quantity of people. This theory suggests that proper behavior seeks to maximize happiness for the... ...eads to the perverse result that under certain circumstances a lie, for example, might be morally right if the individual contemplating the lie felt no compunction about lying and morally wrong only if the individual felt such a compunction" (Kelman, 1981, p. 34). As mentioned earlier, the accounting profession is working hard to regain the public's trust. This is because at some point the profession as a whole assumed the utilitarian based concept that ...the purpose, nature, and responsibility of business are to maximize profit or shareholder value. To the extent that an accounting firm is a business, it falls under the profit-maximizing rubric. But when an accounting firm sees itself primarily as a business, making a profit overrides its main function of attesting to the truth and correctness of financial statements. (Duska, Duska, Ragatz, 2011,p. 170)