McGraw-Hill/Irwin © 2013 The McGraw-Hill Companies, Inc., All Rights Reserved. Chapter 16 Professionalism, Ethics, and Career Planning.

McGraw-Hill/Irwin © 2013 The McGraw-Hill Companies, Inc., All Rights Reserved.

Chapter 16

Professionalism, Ethics, and Career Planning

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Outline

• Expected outcomes

• Professionalism

• Ethics

• Certifications and licensure

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Expected outcomes

• List and discuss characteristics of a professional.

• Explain how those characteristics apply to the accounting profession.

• Define ethics.

• Discuss various models / schools of ethical decision making.

• Explain how to resolve ethical dilemmas.

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Professionalism

• Bell– Communicates

effectively.– Thinks rationally,

logically and coherently.

– Appropriately uses technical knowledge.

– Integrates knowledge from many disciplines.

– Exhibits ethical professional behavior.

– Recognizes the influence of political, social, legal, economic and regulatory forces.

– Actively seeks additional knowledge.

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Professionalism

• McDonald– Specialized knowledge base

– Complex skills

– Autonomy of practice

– Adherence to a code of ethical behavior

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Professionalism

• Lecture break 16-1

Think of someone you know that you consider

“professional” based on the ideas just

presented. With a partner, discuss that person,

pointing out how they exemplify the

characteristics of a professional.

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Ethics

• Moral philosophy

• Three areas– Meta-ethics: Where do ethical principles

come from? What do they mean?– Normative ethics: What moral standards

regulate right and wrong conduct?– Applied ethics: How should people respond

to specific controversial issues?

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Ethics

• Ethical issues in accounting– Earnings management– Performance evaluation– Use of estimates– Decisions involving human judgment– Taxation– Structuring transactions to meet certain

accounting rules

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Ethics

• Schools of ethical thought– Utilitarianism

• The end justifies the means• The greatest good for the greatest number

– Rights and dutiesIndividuals have certain rights; others should not interfere with them.

– Justice• People should be given

what they deserve.• Hamlet: If everyone gets what they deserve,

who will escape whipping?

– VirtuesPeople should do what is right, moral and virtuous

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Ethics

• Lecture break 16-2

Joe is frequently in

conflict with his

supervisor, Jill. Jill is

considering giving Joe a

poor performance review

in an effort to get him

terminated.

– Choose one of the four schools of ethical thought.

– Explain how Jill might justify her decision based on the school you chose.

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Ethics

• Models for making ethical decisionsLangenderfer and Rockness

• Identify the facts.• Identify the ethics issues & stakeholders involved.• Define the norms, principles and values related to

the situation.• Identify the alternative courses of action.• Evaluate the consequences of each possible

course of action.

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Ethics

• Models for making ethical decisionsLangenderfer and Rockness (continued)

• Decide the best course of action consistent with the norms, principles and values.

• If appropriate, discuss the alternative with a trusted person to help gain greater perspective regarding the alternatives.

• Reach a decision as to the appropriate course of action.

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Ethics

• Models for making ethical decisionsMintz and Morris

• Frame the ethical issue.• Gather all the facts.• Identify the stakeholders and obligations.• Identify the relevant accounting ethics standards

involved in the situation.• Identify the operational issues.

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Ethics

• Models for making ethical decisionsMintz and Morris (continued)

• Identify the accounting and auditing issues.• List all the possible alternatives you can or cannot

do.• Compare and weigh the alternatives.• Decide on a course of action.• Reflect on your decision.

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Ethics

• Lecture break 16-3– Mike has observed what he believes to be

fraud in his company. Employees paid through a government grant are doing less than 1% of the work for which they are contracted.

– Use one of the two ethical decision frameworks to analyze Mike’s options in this situation.

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Certifications & licensure

• The purpose of an accounting degree is not to prepare a student to pass a particular certification / licensure exam.

• The purpose of an accounting degree is to teach a student how to think and behave like an accountant.

• Nevertheless, certification / licensure is a worthy goal in our profession.

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Certifications & licensure

• Certification: mastery of a body of knowledge– Certified Fraud

Examiner– Certified Internal

Auditor– Certified Management

Accountant– Certified Information

Systems Auditor

• License: permission from some authoritative body to perform a particular taskCertified Public

Accountant

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Classroom assessment

• This chapter has focused on:– Professionalism

– Ethics

– Certification and licensure in accounting

• On your own, prepare a diagram or write a paragraph that connects those three topics to one another.

• Discuss your work with a partner or in a small group.

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