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Unit 1: Moral Values and Ethics

12/7/2017 MS 208 1
Topic 7
Modern Business Ethics and
Dilemmas

12/7/2017 MS 208 2
Ethical Dilemmas
 Ethical dilemmas are situations where two
ethical values or requirements seem to be
incompatible
 A conflict of interest arises when an individual
has a duty to two or more parties
 Ethical dilemmas involve unclear choices of
what is right and what is wrong

12/7/2017 MS 208 3
SITUATIONS OFETHICAL DILEMMA &
CONFLICT OF INTEREST
• Ethical values usually arise as a result of dilemmas
between four sets of values:
–Societal values – the law
–Personal values – values and principles of self
–Corporate values – the values and principles of the
organization where the individual works
• –Professional values – the values and principles of the
professional body that the individual is a member of
Where a professional or organizational values conflict
with statute (law), the LAW overrides it every time.
ETHICS & CONTRACTUAL OBLIGATIONS
• Contractual obligations differ from statute in the sense
that an individual enters into a contract voluntarily

There is no voluntary element to statutory obligations

Therefore, an individual can break a contractual
• obligation without breaking the law
Due to the above, professional ethics should be
• followed even if it is at the expense of a contractual
obligation
That is profession is given priority over contract of
employment
ETHICAL TENSIONS
Societal values and corporate values:
–An individual may be asked by his employer to act in an
illegal manner, eg., discriminate employees
Personal values and corporate values
–An individual may not agree with certain activities of the
organization, eg. Child labor
Professional values and corporate values
–An employee is expected to amend a set of figures to
inflate the profits
SPOTTING AN ETHICAL DILEMMA
 Following issues are to be upheld and can be the
reasons for ethical dilemmas:
 An issue of integrity
 Professional competence and due care – should be
qualified before offering service
 Confidentiality – to be maintained Conflict of interest
 Objectivity
RESOLUTION OF ETHICAL
CONFLICTS
• Transparency
–Do I feel comfortable with others knowing about

my decision?
Effect
• –Have I considered all parties who may be affected
by the decision, and all factors into account, before
making the decision
Fairness
–Would a reasonable third party view the decision
as fair
RAISING & DEALING WITH
ETHICAL DILEMMA
• A number of options are available for accountants
for raising ethical issues:

Direct with their professional body

Within their organization, via a help or whistle
• blower option
• To external organization such as customers or agents
anonymously