AICPA Principles
This principle requires CPAs to act with honesty and candor, even when difficult.
What is integrity?
The gap between who you want to be and who you actually are is known as this.
What is an ethical blind spot?
At this stage, people act to gain rewards or satisfy personal needs.
What is Stage 2: Self-interest/Rewards?
This moral philosophy focuses on the character of the person making the decision, rather than the action or outcome.
What is virtue ethics?
Corporate governance is the system by which corporations are directed and controlled in the interests of these stakeholders.
Who are shareholders (stakeholders)?
This intuitive, and emotional style of thinking was described by Daniel Kahneman as “System 1.”
What is fast thinking (System 1)?
CPAs must serve this broader group’s interests, placing them above personal or client gain.
What is the public interest?
When ethical considerations disappear from view due to organizational pressure, this occurs.
What is ethical fading?
At this stage, children see right and wrong only in terms of punishment.
What is Stage 1: Punishment/Obedience?
Jeremy Bentham and John Stuart Mill are most associated with this philosophy, which emphasizes the “greatest good for the greatest number.”
What is utilitarianism?
This problem arises when managers pursue their own interests rather than shareholders’.
What is the agency problem?
Reporting private information about conduct that is illegal, unsafe, or fraudulent is known as this.
What is whistleblowing?
This principle requires professionals to remain impartial and free of conflicts of interest in both fact and appearance.
What are objectivity and independence?
This quality describes the ability to stand firm under pressure and adhere to one’s ethical values.
What is moral courage?
At this stage, people follow rules to maintain social order and respect authority.
What is Stage 4: Law and Order?
This type of deontology, proposed by Immanuel Kant, requires that an action be acceptable if it could be applied to everyone.
What is the categorical imperative of universalizability?
This Sarbanes-Oxley requirement mandates that CEOs and CFOs personally certify financial statements.
What is SOX Section 302?
What is a deliberate misrepresentation to gain an advantage over another party or get them to do something they wouldn't otherwise do?
What is Fraud?
The principle that emphasizes competence, continued education, and diligence in carrying out professional responsibilities.
What is due care?
The “trolley problem” illustrates how these types of flaws can affect moral decision-making.
What are cognitive shortcomings (or moral reasoning biases)?
This stage emphasizes principles of justice and conscience, similar to Kant’s categorical imperative.
What is Stage 6: Universal Principles?
This ethical theory argues for fairness and equality using the “veil of ignorance” thought experiment.
What is justice theory ?
Who should have direct and unrestricted access to the audit committee.
What are Internal Auditors?
Aristotle believed that ethical excellence comes not from rules, but from repeatedly practicing good habits of this.
What is virtue?
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
This concept refers to rationalizing unethical behavior by justifying it through situational circumstances.
What is situational ethics?
At this stage, people follow rules to maintain social order and respect authority.
What is Stage 5: Social Contracts?
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?
This board-level committee, required under SOX, is directly responsible for appointing auditors and overseeing financial reporting.
What is the Audit Committee?
This type of moral theory bases moral choices on general rules designed to maximize utility, rather than individual acts.
What is rule utilitarianism?