AICPA Principles
This principle requires CPAs to act with honesty and candor, even when difficult.
What is integrity?
This type of thinking, described by Daniel Kahneman, is characterized by deliberate, conscious, and effortful mental processing that requires focused attention and logical reasoning.
What is System 2?
This is the total number of stages of Kohlberg's theory of moral development.
What is six?
This term describes the governing body of a company that provides advice and oversight to ensure management aligns with stakeholder interests.
What is the board of directors?
This moral philosophy focuses on the character of the person making the decision, rather than the action or outcome.
What is virtue ethics?
Reporting private information about conduct that is illegal, unsafe, or fraudulent is known as this
What is whistleblowing?
According to this AICPA Principle, CPAs must serve this broader group’s interests, placing them above personal or client gain.
What is the public interest?
This quality describes the ability to stand firm under pressure and adhere to one’s ethical values.
What is moral courage?
At this stage of moral development, one is most concerned with rules and regulations.
What is stage four?
Under this theory, problems arise in corporations due to the separation of ownership and control, where those managing the company may have different goals than those who own it.
What is agency conflict/theory?
This moral view allows for self-interest while considering the well-being of others, as long as it ultimately serves the decision-maker’s goals.
What is enlightened egoism?
According to the ACFE report to the nations, this type of fraud has the biggest financial impact.
What is financial statement fraud?
This principle requires professionals to remain impartial and free of conflicts of interest in both fact and appearance?
What are objectivity and independence?
This cognitive bias occurs when individuals believe they can accurately predict outcomes after an event has already occurred, often thinking "I knew it all along."
What is hindsight bias?
At this level of moral development, individuals focus primarily on self-interest and personal rewards, with little consideration for societal norms or universal principles.
What is preconventional?
This board-level committee, required under SOX, is directly responsible for appointing auditors and overseeing financial reporting
What is the audit committee?
This ethical theory argues for fairness and equality using the “veil of ignorance” thought experiment.
What is Justice Theory?
This term describes how leadership's ethical behavior and priorities shape the ethical standards and culture of the entire organization.
What is tone at the top?
The principle that emphasizes competence, continued education, and diligence in carrying out professional responsibilities
What is due care?
This concept refers to rationalizing unethical behavior by arguing that the unique context or circumstances make the action acceptable.
What is situational ethics?
A manager decides not to report safety violations at the manufacturing plant because doing so would upset the team and make him look like a troublemaker who doesn't care about his coworkers' opinions. This reasoning reflects this stage.
What is stage 3?
This specific section of the Sarbanes-Oxley Act requires management to provide a report on the company's internal control over financial reporting.
What is Section 404?
Aristotle believed that ethical excellence comes not from rules, but from repeatedly practicing good habits of this.
What are virtues?
(I will accept values as we have used them somewhat interchangeably in this course)
The three main categories of fraud include: Misappropriation of assets, Financial statement fraud, and this.
What is corruption?
This principle requires CPAs to follow the overarching values of the Code of Conduct when determining what services to provide.
What is the nature and scope of services
When ethical considerations disappear from view due to organizational pressure, this occurs.
What is ethical fading?
A tax accountant notices that current tax laws allow wealthy individuals to use complex trust structures to avoid estate taxes entirely, while middle-class families face significant tax burdens when passing assets to heirs. While these strategies are completely legal and profitable for the firm, the accountant begins advocating to legislators and professional organizations to reform estate tax laws to create a more equitable system, arguing that the current legal framework violates principles of fairness and the social contract. This reasoning most closely aligns with this stage.
What is stage 5?
Under SOX, these two executives must personally certify the accuracy of the company's financial statements.
Kant proposed two categorical imperatives: 1) that humans are the ends to the means and 2) this:
What is universalizeability?
This concept holds that there is no ultimate standard of good and evil, and that morality varies from one culture, society, or circumstance to another.
What is moral relativism?