38 Questions
What is the primary focus of ethical decision making in the context of business?
Protecting the interests of stakeholders
Which of the following is a characteristic of an ethical dilemma?
A conflict between two or more ethical principles
Which of the following normative ethical theories is based on the idea that an action is right if it promotes the greatest good for the greatest number of people?
Utilitarianism
What is the primary purpose of the Five Tenets of ethical decision making?
To provide a framework for evaluating the ethics of a decision
What is the difference between an ethical problem and an ethical dilemma?
An ethical problem is a situation where there is a clear right or wrong answer, while an ethical dilemma is a situation where there is no clear right or wrong answer
What is the ultimate goal of ethical decision making in the context of business?
To make decisions that are morally justifiable and sustainable
What is the primary goal of the utilitarian approach in ethical decision making?
To take the course of action that results in the greatest benefit to the greatest number of people
Which of the following is a key consideration in the utilitarian approach?
The possible outcomes of a decision or action
What is the primary focus of the deontological approach in ethical decision making?
The moral rightness of the decision, regardless of the outcome
What is the purpose of the categorical imperative in ethical decision making?
To test the moral rightness of a decision
Which of the following approaches emphasizes the importance of fairness and justice in ethical decision making?
The fairness and justice approach
What is the primary goal of ethical decision making in the face of dilemmas?
To result in the least harm to the fewest number of people
How many primary theoretical perspectives are used to make better ethical decisions?
5
What is the purpose of the Five Tenets of ethical decision making?
To assist in dealing more effectively with ethical dilemmas
What would have been the consequence of Wessels issuing a qualified audit opinion?
Linkway would have been placed under public scrutiny
What is the main principle of the First Tenet?
Do the least harm to the fewest people
What would have been the consequence of Wessels stopping the audit and investigating the financial irregularity?
Linkway would have been exposed, and its stakeholders would have been protected
What is the main test of Tenet 2?
Can the decision be made into a universal law that applies to everyone?
What would have been the consequence of all auditing firms ignoring financial irregularities and issuing unqualified opinions?
No financial results could ever be trusted
Why did Wessels' decision go against the First Tenet?
He did not consider taking an action that would do the least harm to the fewest people
What is the primary objective of the First Tenet?
To do the least harm to the fewest people
What is the test of Tenet 2 in relation to Wessels' decision?
Would the decision be a universal principle that applies to everyone?
What question should Wessels have asked himself regarding the financial irregularity?
Where the funds were received from and whether it was appropriate
What is the primary purpose of the accounting and auditing profession?
To safeguard stakeholder funds
What was the consequence of Wessels' decision to ignore the financial irregularity?
He and other KPMG partners and executives either resigned or were fired
What is the main goal of the Tenet 5 questions?
To assess whether a decision helps an individual meet their purpose or potential
What should Wessels have considered when deciding whether to ignore the financial irregularity?
Whether the decision would serve the community as a whole
What is implied by Wessels' decision to ignore the financial irregularity?
He was not concerned about the community's well-being
What is the relationship between the Tenet 5 questions and Wessels' decision?
The Tenet 5 questions would have led Wessels to make a different decision
What can be inferred about Wessels' decision-making process?
He prioritized his personal interests over the community's well-being
Which type of professional requires formal licensing and is placed above the social efficiency barrier?
Auditor
What is the primary function of professional bodies in terms of regulating entrance to the profession?
To regulate entrance to the profession through education and training
Which of the following professional bodies is NOT linked to the accounting profession in South Africa?
Medical Association of South Africa
What is the primary role of an accountant who performs duties of an accountant?
To service the private interests of clients
Which of the following is a characteristic of a 'professing' professional?
Creates knowledge and is generally in the public interest
What is the primary responsibility of professional bodies?
To protect the standing of their professions
Which of the following professional bodies is responsible for administering a registration system for candidates?
Professional bodies
What is the primary distinction between an accountant and an auditor?
An accountant performs duties of an accountant, while an auditor performs duties of an auditor
Study Notes
Ethical Decision Making
- Ethical decision making is crucial in making decisions that impact shareholders and stakeholders
- It involves evaluating decisions to determine if they are ethical or not
Ethical Decisions and Dilemmas
- Ethical decisions are choices that are made with moral principles in mind
- Ethical dilemmas occur when there are conflicting moral principles or values
The Five Tenets of Ethical Decision Making
- Tenet 1: Ask yourself, who will benefit and who will be harmed? Can we make a decision that harms no one?
- Tenet 2: Can the decision or action be made into universal law that applies to everyone?
- Tenet 3: Does the decision or action protect the rights of those involved?
- Tenet 4: Does the decision or action promote the common good?
- Tenet 5: Does the decision or action make me feel like the person I am meant to be?
Five Normative Ethical Theories
- Utilitarian approach: Take the course of action that will result in the greatest benefit to the greatest number of people
- Deontological approach: Do what is right because it is the right thing to do, regardless of the consequences
- Fairness and justice approach: Consider the impact of the decision on fairness and justice
- Common good approach: Consider the impact of the decision on the common good
- Virtue approach: Consider the character and moral virtues of the person making the decision
Professional Bodies
- Professional bodies have a responsibility to protect the standing of their professions
- They regulate entrance to the profession, administer a registration system, set technical standards, and issue ethical standards
- Examples of professional bodies in South Africa include SAICA, SAIPA, CIMA, ACCA, IIA, and IRBA
Learn about the importance of ethical decision making in business and how to evaluate decisions based on moral principles. Discover the five tenets of ethical decision making and how to navigate ethical dilemmas.
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