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Abstract

There are various systems of ethics that can be applied to the profession of accountant. They include the deontological system of ethics and the utilitarian system of ethics. However, the best possible one in line with the accountant profession ought to identify the values inherent in the organizational culture of this occupation and the AICPA Code of Professional Conduct. The deontological system of ethics emphasizes aiming at engaging in what is right and provided by law or norms rather than what is good while the utilitarian one focuses on achieving the greatest good to the greatest number of individuals. Since the deontological system provides the respect of law and norms, it is the best framework that can be applied to the professional ethics. It is also important to note that it promotes the respect of the rules and regulations that are in line with the accountant profession.

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Outline

I. Introduction

A. The deontological and utilitarian ethical systems applicability to accounting

B. AICPA emphasis on the need to uphold integrity, independence, and objectivity

II. The deontological ethics system

A. Emphasizes on duty and obligations

B. Mostly promoted by Kant

III. The utilitarian ethics system

A. Attributed to Jeremy Bentham and John Stuart

B. Postulates the attainments of greatest good and happiness to a majority of the people in society

IV. An evaluation of the systems in respect to organizational culture of the accounting profession and the AICPA Code of Professional Conduct.

A. The deontological system and organizational culture

1. Organizational culture of accounting focuses on statement preparation and tax returns

2. Ethical dilemmas emanate from handling cash transactions

3. Deontology applicable due to emphasizing duty and responsibility

B. The utilitarian system of ethics and organizational culture

1. Organization culture has a unique interpretation of the greatest good to a large number of people

2. Organizational culture requires individuals to uphold accounting principles

3. Changes in policies under the utilitarian ultimate goal of the attainment of greater good

C. The deontological system and the AICPA Code of Professional Conduct

1. AICPA Code of Professional Conduct guides accountants

2. Deontology upholds ethics and ensures accountants remain within the provisions of AICPA

D. The utilitarian system and the AICPA Code of Professional Conduct

1. AICPA only needs strict adherence to accounting principles and standards

2. Utilitarianism might not work well in line with the AICPA principles

V. The ethical system that is most appropriate for the accounting profession

A. Deontological system of ethics is the most appropriate

B. It promotes obligation, responsibility, and respect for ethical principles

VI. Conclusion

A. Ethical standards should be in tandem with the accounting culture

B. The deontological system is preferable since the utilitarianism system may lead to deviations

Various entities that are concerned with accounting aim to promote the high standards in consonance with ethical behavior with an organization. In particular, the American Institute of Certified Public Accountants (AICPA) is an institution that provides services to public accountants that are certified and work for public organizations in this sphere as well as other institutions (Jeffrey, 2013). The code of professional conduct in line with AICPA puts emphasis on the obligations of all public accountants to uphold integrity, objectivity as well as independence in their profession. What is more, there are various types of ethical systems that can be applied to the accountancy. However, two of these systems that can be directly applicable to the profession mentioned above are the deontological and utilitarian ones. The comparison and contrast of the basic moral principles of the utilitarian and deontological ethical systems poses the latter as the most appropriate to the profession related to the accountancy one due to its emphasis on the duty, respect, and obligations on the part of an accountant.

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The Deontological Ethical System

The deontological ethical system particularly emphasizes the duties and obligations ethics. The system provides an assertion that the behavior of an individual might be wrong despite the fact that it leads to the best possible results. On the other hand, the above-mentioned system postulates that an act can be taken as righteous despite the fact that this act might lead to the negative outcomes. It also upholds the duty of deontologists in satisfying legitimate claims (Bazley, Hancock, & Robinson, 2014). The application of logic to the principles of ethics while taking into consideration that an individual has various duties concerning other individuals ought to determine these claims. Deontology is, therefore, also referred to as respect-for-persons ethics, non-consequentialism as well as ethical formalism. Hence, the judging of the decisions should be made with the consideration of the situations, in which these decisions are made.

There are different deontological variations. The most crucial attempt in the construction of the ethical deontological approach can be found in the groundwork of Immanuel Kant in relation to the metaphysics of morals. In this work, he makes an observation that the goodwill is specifically an unconditional good. Such a vision is highly relevant to an accountant in the corporate governance context (Avram & Daniela, 2012). According to Kant, there is the impossibility of conceiving anything in the universe or anything out of it, which can be considered good with the failure of having the aspect of qualification rather than a good will (Klein, 2015). It, therefore, implies that some individuals might use certain good intellectual qualities including intelligence and positive traces of character like courage for purposes that are evil by their nature.

Deontologists state that there is no justification of certain choices by the effects of these choices. It means that despite the moral goodness of the particular effects of these decisions, some of them are prohibited morally. Hence, the rightfulness or wrongfulness of a choice relies on the conformity of this choice to a moral regulation. Therefore, the individuals are entitled with the responsibility of respecting and keeping norms (Wilson, 2014). Furthermore, the system provides the prioritization of the aspect of what is right rather than the aspect of what is good. Thus, the individuals ought to engage in acts that are aligned with what is right rather than engaging in the acts that are connected with what is good. Ultimately, the deontological system of ethics emphasizes making the best decisions in line with morals. Therefore, Kant provides various formulas that are helpful in defining the best moral choices.

He, therefore, asserts that practical judgments can be termed as imperative ones since the qualified judgments are known as the hypothetical imperatives while the unqualified oaths are considered the categorical imperatives. Hence, the determination of the goodness or rather badness of the decisions derives from the ability of accomplishing the goal (Klein, 2015). Moreover, with the deontological system of ethics, individuals uphold both their moral and ethical standards in fulfilling responsibilities (Bostan, Constuleanu, Horomnea, & Constuleanu, 2011). In this regard, an individual will be able follow his or her obligations to other people and the society due to the fact that the support of his or her duties is concerned ethically correct action. Hence, the system is crucial in aiding an individual in the production of consistent sound decisions based on the duty and responsibility of a person to do so.

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The Utilitarian Ethical System

The utilitarian system of ethics is attributed to two philosophers, namely Jeremy Bentham and John Stuart. The utilitarianism states that for an action to me termed as right or wrong as far as morals are concerned, the factor that is put into consideration is the consequences that come from performing an action. In this regard, an action that is considered right is the one that results in the best consequences or rather the greatest utility amount (Wilson, 2014). This system particularly advocates for the greatest happiness of the greatest number of individuals. Thus, according to the proposed system of ethics, the greatest ethical consideration in the world is the maximization of happiness. Consequently, the utilitarian system can also be referred to as consequentialism due to the fact that it judges action in regard to their outcomes. Utility or rather the greatest happiness principles actions are proportionally right since they seem to promote happiness. On the other hand, the actions are wrong if they seem to promote unhappiness (Stanwick & Stanwick, 2015). In this regard, happiness is defined as pleasure or rather the absence of pain. Therefore, according to the proposed approach, the pleasure is being prioritized.

It is, however, crucial to note that this system of ethics possesses ambiguity, particularly in relation to the phrase “the greatest good for the greatest number of people.” One can take, for example, the case of the distribution of ten pleasure units. It, therefore, implies the division of these units between ten individuals (Wilson, 2014). However, the question whether ten individuals to whom the units ought to be distributed to like these pleasure units it is not taken into consideration. Therefore, from the general point of view, the ten pleasure units ought to be distributed only to those individuals who are interested in them. It, thus, raises the question of fairness as well as the manner, in which the things ought to be divided in line with the utilitarian system of ethics. Furthermore, in the case of corruption whereby an individual takes a large share of money that was supposed to be subdivided equally among a particular number of persons and puts it under his or her custody, an individual acts unethically (Stanwick & Stanwick, 2015). Despite the fact that the sharing of the money can benefit a large number of individuals, the manner, in which it is shared, is morally wrong.

Apart from this, in the case of bribery, it is taken as a general guideline in line with the utilitarian system of ethics. For instance, when an individual engages in bribery for the exchange of being awarded an employment opportunity, and this opportunity results in to the provision of a large number of financial benefits to the greatest number of his or her family members, the utilitarian system of ethics might make the conclusion that justifies the bribery. In this case, the utilitarianism considers the bribery as the subjection since it terms as the basis of the system (Klein, 2015). This ethical system, therefore, forsakes the sense in the favor of sound besides forsaking light and somehow advocating for darkness.

What is more, in relation to the utilitarian system of ethics, the dilemma arises when it comes to making decisions concerning the consideration of things as good or bad ones. The system provides an assumption that the things, which the individuals prefer, are considered good. Therefore, good is directly proportional to the rate of demand. The reason for it is the assertion that individuals should engage in actions that lead to the production of greatest good ratio as compared to the ratio of bad for every individual in the society (Bazley et al., 2014). In conclusion, the ultimate objective of this system of ethics is the promotion of happiness of the society rather than happiness of an individual. Hence, it can be assumed that the proposed system supports egoism. Thus, an action is considered ethical if it results in the greater balance between good and evil in any provided condition.

The Systems in Respect to the Organizational Culture of the Accountant Profession and the AICPA Code of Professional Conduct

It is correct to state that both the deontological system of ethics and the utilitarian system of ethics are related to the organizational culture of the accountant profession as well as the AICPA Code of Professional Conduct due to the fact that they can be applied to the aspects mentioned above.

The Deontological System and the Organizational Culture of the Accountant Profession

The organizational culture of the accountant profession is concerned with the preparation of financial statements and tax returns besides the provision of consultative services. It is, thus, clear that the profession mentioned above involves managing money both directly and indirectly. From a general perspective, money raises the issue of ethical dilemma based on the phrase that love to money is the root of all evil (Stanwick & Stanwick, 2015). Some public certified accountants find themselves in ethical dilemmas when introduced to the financial issues that make them develop greediness for individual gain. However, despite such occurrences, the accounting code of professional conduct requires from these people to act ethically and uphold integrity by following the accounting rules and regulations. From the discussion provided on the deontological system of ethics, it is important to note that the system emphasizes the duties and responsibility of individuals of making ethical decisions based on the established norms. Each agent of norms is, therefore, required to uphold the regulations by obeying and maximizing them. Furthermore, the deontology provides the prioritization of right rather than good. Consequently, the deontologists will perfectly adhere to the rules and regulations of the accountant profession, which the organizational culture states, therefore, upholding the values of the occupation.

The Utilitarian System of Ethics and Organizational Culture of the Accountant Profession

From the perspective of the organizational culture of the accountant profession, there is the unique evaluation when it comes to the phrase “the greatest good for the greatest number of people.” The greatest value an individual can uphold in the society is the promotion of the ultimate good for all people (Bazley et al., 2014). As it is mentioned earlier, the organizational culture of the accountant profession aims to uphold all the accounting principles, rules, and regulations, which the accounting code of conduct formulates. The utilitarianism, on its part, defines the good as the ultimate goal of every action. In this case, the utilitarian individual can be of use to the accountant profession by correcting the rules and regulations that lead to the violation of human rights, hence, promoting the good of all people. For instance, there are certain rules and regulations of the taxing system, which all individuals in the society do not prefer. Therefore, an utilitarian can ensure that these norms are changed for the common good of all individuals in the society (Klein, 2015). What is more, the accountancy can highly influence the system of governance in the country due to the fact that it is concerned with many financial functions in the state including the treasury and budget system. An utilitarian person can, therefore, provide the good governance by affecting the formulation of financial policies and making the financial decisions that will be of the greatest good to the greatest number of individuals.

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The Deontological System in Relation to the AICPA Code of Professional Conduct?

The AICPA Code of Professional Conduct provides the principles and rules that guide the ethical functions as well as the professional responsibilities of the certified public accountants. The code standards uphold the independence of auditors, their integrity and objectivity in addition to the responsibility to clients and fellow auditors besides the acts that are discreditable for the profession of accounting. In particular, Section 51 of the AICPA Code of Professional Conduct focuses on the membership, hence, emphasizing voluntary adherence to the code of conduct provided in line with the accountant profession (McPhail & Walters, 2009). Consequently, AICPA Code of Professional Conduct provides clear rules and regulations concerning the occupation so that the people of this profession can employ their professional judgments in making decisions. In this respect, from the deontologist’s point of view, he or she will follow the provided rules, regulations, and all the principles that the AICPA Code of Professional Conduct stipulates. Since the deontological system of ethics is rooted from the value of upholding norms, the accountants can apply this system to adhering to the principles and rules, which the AICPA provides, without questioning (McPhail & Walters, 2009). For instance, a certified public accountant will apply this system of ethics to the authorization and execution of a particular transaction as well as the preparation of financial documents in line with a certain transaction.

In addition, a certified public accountant can apply the deontological system of ethics to the exercising of sensitive judgments as well as moral decisions apart from serving public interests, honoring public trust, and demonstrating his or her commitment towards professionalism. There might be dilemmas affecting moral judgments; however, with deontological system, they may be handled in a professional manner (Doolan, 2013). The ethical system may assist an accountant to ensure due care and excellence since it can guarantee competent performance in the duties of professionalism along with handling the situations or rather conditions that might influence the objectivity of an accountant (Jeffrey, 2013). In conclusion, the deontological system of ethics can be related to the AICPA Code of Professional Conduct since a certified public accountant can adhere to the rules and regulations, which the organization provides, in response to the basic tenets of the deontological system of ethics.

The Utilitarian System in Relation to the AICPA Code of Professional Conduct

Due to the analysis of the utilitarian system of ethics, it becomes obvious that this system is not highly related to the AICPA Code of Professional Conduct. As it is discussed earlier in this research paper, the main target of the utilitarian system of ethics is the achievement of the greatest good for the greatest number of individuals without considering the manner, in which this achievement is acquired (Stanwick & Stanwick, 2015). Consequently, the system fails to respect the aspect of the existence of rules and regulations or rather norms, hence focusing on the outcomes of actions. Thus, with the use of this system of ethics, the AICPA Code of Professional Conduct is not acknowledged, hence loses its relevancy. Employing the utilitarianism, the AICPA Code of Professional Conduct can experience much confusion and chaos due to the fact that the element of uniformity will not be considered (Klein, 2015). The accountant profession requires the application of uniformity in its general practices in order to promote the integrity and accountability of the stakeholders involved in this profession.

For the appropriate functioning of the profession of accountant, it should be the stipulation of solid principles as well as rules and regulations that ought to be strictly adhered to by all individuals concerned with this occupation. A good system of accounting should bestow a high level of commitment among (Uyar & Ozer, 2011). Otherwise, accountants can decide to unite and start to violate the principles and guidance provided in respect to the profession by engaging in acts that will lead to their personal gain. Furthermore, the failure of adhering to the existing rules and regulations of the accountancy will compromise the objectivity of various practices of the profession including auditing.

There has been an increased tendency of the failure of the public to have confidence in the financial system of reporting. Some of the problems in the system of accounting are the result of the violation of rules and regulations as well as other factors including rather common frauds and failures to adhere to the rules in corporate governance context (Klein, 2015). Therefore, it calls for the necessity of the establishment of accounting standards of financial reporting, hence the dire need of bringing improvements to the existing standards. In this case, the utilitarian system of ethics can only be applied under the next condition: the system will influence the correction of the existing standards of financial reporting, hence eliminating the chance of the promotion of the achievement of the greatest good for all individuals in the society. With the attainment of the greatest good, morality in the accounting professions seems to be advanced greatly. However, it should be carefully implemented due to the high risk of violation (Horomnea & Pascu, 2012).

The Ethical System that is the Most Appropriate for the Accountant Profession

The deontological system of ethics is the most appropriate for the accountant profession. From the perspective of the proposed occupation, the most convenient system has to feature the element of respect when it comes to the Financial Accounting Standards Board (FASB), Generally Accepted Accounting Principles (GAAP), and AICPA Code of Professional Conduct (Bazley et al., 2014). The AICPA Code of Professional Conduct provides the principles and the rules that guide the accountant profession. The principles act as a basic framework of the rules and regulations. On the other hand, the rules provide specific guidance for performing professional services to all members of the AICPA. Hence, according to the AICPA Code of Professional Conduct, a professional accountant has the responsibility of acting with integrity, serving the interest of the public besides full dedication to the professional excellence (Wilson, 2014). The document also states that public accountants are required to observe objectivity and independence in the process of making judgments.

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Furthermore, FASB aims to establish and improve the standards of financial reporting as well as the financial accounting standards promoting financial reporting that leads to the provision of useful information to the stakeholders of the accountant profession (Jeffrey, 2013). GAAP, on its part, are the accounting principles, procedures, and standards that the companies ought to adhere to while compiling financial statements. As much the ethical principles might be tough to follow, it would be more reasonable on the part of the accountant to ensure they are implemented (Boyce, 2013). The set of rules and regulations provides the improvement and transparency in the reporting of financial statements. Therefore, FASB and GAAP also aim to promote the general good of all individuals by emphasizing rather what is right than what is good in line with the accounting principles. All certified public accountants, thus, have the responsibility of strictly following and putting into practices the rules and regulations of GAAP and FASB in addition to practicing the principles and standards that are provided by these two bodies and related to the establishment of accounting principles (Stanwick & Stanwick, 2015).

Therefore, the deontological system of ethics will influence the observance of the rules and regulations, which the bodies mentioned above propose, that are concerned with the financial accounting due to the characteristics of the system. The system puts the emphasis on the demands of duty. Deontological morality not only eliminates the demanding aspects in addition to the alienation of the traces of the utilitarian system but also works according to the convention notions in line with the moral duties of individuals (Klein, 2015). The outcomes that the deontological system of ethics influences cannot be termed as morally wrong in any particular instance. Furthermore, the proposed system leads to the accounting of moral institutions that are stronger and more cross-cultural as compared to the utilitarian system of ethics (Klein, 2015). In addition, within the jurisdiction of any individual, laws or rather rules and regulations play a crucial moral function. Not all decisions in accounting result in the best outcomes. However, aiming at the achievement of the best should be the ultimate goal of all certified public accountants and other individuals (McPhail & Walters, 2009). Deontological system matches with the rules of the bodies that have the responsibility of establishing accounting principles. It implies that the tenets of moral ethics provided by the deontological system present the most appropriate course of actions to be adhered to in relation to the profession of accountant. What is more, they also match with the AICPA Code of Professional Conduct.

Conclusion

In conclusion, taking into consideration the characteristics of the utilitarian system of ethics as well as the deontological system of ethics besides the organizational culture of the accountant profession and the AICPA Code of Professional Conduct, it is essential to assert that the deontological one can be supported as the most appropriate ethical system for the proposed profession. In this respect, the suitability of this ethical system is based on its basic tenets of operation. The deontological system advocates for actions guided by the stipulated norms, rules, and regulations. Evaluating the organizational culture of the accountant profession and the AICPA Code of Professional Conduct, it can be stated that the system is critical in aiding the certified public accountants in following the rules and regulations that they ought to be affiliated with. Apart from this, if one compares this system of ethics to the utilitarian one, it can become known that there are various strengths associated with it while the utilitarian system presents ambiguity and ethical dilemma in its application. Thus, the deontological system is the most convenient framework for the accountant profession.