Accounting Ethics and Dilemmas: A Case Study Analysis

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Accounting in Society
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Table of Contents
Week 3 – Tutorial........................................................................................................................................3
Question 1...............................................................................................................................................3
Question 2...............................................................................................................................................5
Question 3...............................................................................................................................................7
Case 1..................................................................................................................................................7
Case 2..................................................................................................................................................7
References...................................................................................................................................................9
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Week 3 – Tutorial
Question 1
Ethics means the moral principles that are accepted by society and governs a person's
behavior or the way in which the activity is conducted. Ethical behavior can be defined as
the way a person behaves in consistency with the moral values of the overall society.
Ethical behavior should be adopted by every individual working in the organization to
fulfill the moral principle which includes honesty, equality, fairness and other such
factors in the organization. Ethical behavior is an important element for the individual as
it guides the individual about the correctness of a particular situation. Ethical behavior in
the organization also helps in achieving objectives and smooth functioning of the
organizational process (Birt et al., 2014).
There are many ethical dilemmas faced in the workplace which includes the following:
 Using the organization's time for a personal purpose: This is the most common
type of ethical dilemma that comes in mind of employees in the organization.
This includes using office time for doing personal business or wasting time in
personal matters. It is important to distinguish between personal life and
professional life to prioritize matters (Rafner, 2019).
 Not telling the truth to employees: Employers tell lies to the employees of the
organization to force them to work by making fake promises and this is not
considered as a good ethical practice. Employers are in a dilemma that achieving
goals is important or moral values like honesty. Thus employer should make
preference accordingly.
 Internet Policy Violation by employees: Employees generally violate the internet
policies made by the organization for personal use or entertainment. Employees
access the sites using the organization's internet which are not allowed to be used
during office hours.
Thus it can be seen that there are many ethical dilemmas faced at a workplace and to
overcome the situation of ethical dilemma following steps are followed:
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 Identification of ethical issues: Individual should first decide what are the ethical
dilemmas faced by the individual. Also, it should be analyzed in the organization
about individual decisions made in the organizations affecting the other areas of
the individual in the organization. For example, in an organization, the decision
taken by top-level management can affect other stakeholders in the organization
which includes customers, employees, creditors etc.
 Identification of alternative actions: Next step is to identify what all alternatives
are available in a particular situation and considering effects of the same to the
personal individual and all stakeholders of the organization. After the selection of
all the available alternatives the next step is followed (Leonard, 2019).
 Use ethical and moral reasoning to decide the action course: Ethical reasoning
and methods are applied to select the best alternative from the available
alternative to making the decision which is ethical. There are various methods
which help in deciding the correctness of the decision morally which includes
Egoism, Enlightened Egoism, Utilitarianism, and rights & obligation. After
deciding the course of action it should also be seen that stakeholders of the
organization have competing demands which should be taken care (Carlon et al,
2019).
Thus it can be seen that there are many ethical dilemmas faced in the workplace or
organization and individual as to overcome and decide the best available option for the
situation.
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Question 2
After reading the article provided in the question it can be seen that there were various
ethical issues in BHP Billiton which led to charges by the US anti-corruption body. Some
of them are as follows:
 It has been said that the company is not able to meet the internal record keeping
standards.
 Also, there were speculations by the US anti-corruption body about the bribery and
speculation intent in the company and its officials.
 It is also stated that the company was not able to maintain sufficient internal control
in Beijing hospitality program as it was favoring foreign government officials thus
having ethical issues within the organization.
 Invitation and hospitality of government officials created a risk of violating anti-
corruption laws then also company was unable to implement sufficient internal
control thus raising questions on the ethical behavior of the company.
 The company also failed to provide employees of the company with effective
training on completion of forms and evaluating bribery risks of the invitations
(McKenzie, 2019).
Thus it can be seen that there are various ethical issues which are present in BHP Billiton
and has to be solved. The company cannot be engaged in bribing foreign government
officials by way of entertainment and hospitality. The company has engaged itself in such
practices as it was unable to maintain proper internal control and thus bribing the officials.
Also, the company's purpose to engage in such unethical ways was because the foreign
officials could help the company with its business and other regulatory matters of the
company.
It can be said that the approach adopted by the company was completely unethical as
improving relationships with foreign government officials by way of bribing and providing
better hospitality services is not a part of the company. It went out of the way which is
completely unethical on the part of the company. It is inappropriate for the company to
follow such practices and strict actions should be taken against the company. Also, the
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company should take relevant remedial actions to improve the unethical methods adopted
by the company and implement the same in the organization to improve the goodwill of the
company. BHP Billiton should make a compliance program and report on the progress of
the compliance program after a year. The company has also introduced policy relating to
government officials hospitality which is seen by the boards of audit and risk committee
formulated by the company.
Thus to conclude it can be said that the article states the ethical issues which prevail in
BHP Billiton and the action taken by US anti-corruption body. Also, several steps are taken
by the company to resolve the unethical issues in future and help in the continuous growth
of the company.
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Question 3
Case 1
As a financial director of the large multinational organization information about a
takeover bid for acquisition of competitors, firms have been made aware. Also on
the other side family friend is considering selling the shares of the rival
organization. It is a matter of ethical dilemma as a financial director is having two
situations, one is the situation as a financial director to not disclose the confidential
information of the organization and other is to help the family friend by sharing the
information of the takeover.
This ethical dilemma can be solved by applying the principles of APES 110 code of
ethics for professional accountants. Paragraph 100.17 to 100.22 specifies the ways
of dealing with ethical conflict resolution. For resolving the issues factors which are
relevant includes ethical issues involved, relevant facts, fundamental principles etc.
In the given case the financial director of the organization should specify the issues
involved in the ethical dilemma and the various alternatives to resolve the same. As
a financial director, it is important to not disclose confidential information about the
company's affairs to outside parties. Thus financial director should evaluate best
proposals to be adopted which would help in solving the ethical dilemma and then
implement the same in solving the dilemma. APES 110 is applicable to all members
and works as a guiding principle in the resolution of ethical conflict among
individuals or organizations. Also as per APES 110, the resolution can be achieved
by discussing such issues with a professional body or obtaining professional advice
on the same.
Case 2
In APES 110, Part B applies to members in public practice and covers different
section varying from section 210 to section 291. In the given case as a certified
public accountant, it can be seen that some of the employees of the company are
being paid cash in hand and the employees are not on formal payroll. In this case, it
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is suspected that the people are employed illegally as there is no record of formal
employment (cpaaustralia, 2019). This is covered in case of independence and as a
key person of the finance team; public accountant should inquire into the matter and
inform the relevant department about the same. The suspicion about the employees
not being on a formal role and being employed illegally the recruitment department
should be approached to check about the documents and contracts. If the same is
not found then relevant departments should be informed about the same outside the
organization is required. However, there is an ethical dilemma on the same as the
organization in which the public accountant is working that only has been illegally
employing people. Thus the public accountant should decide by analyzing various
alternatives about which alternative is best for solving such an ethical dilemma.
Independence is a situation where the person takes a decision on the basis of
integrity and objectivity is also considered.
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References:
 Birt et al. (2014), Accounting: Business reporting for decision making, 5th Edition,
Chapter 2, pp. 53 – 62
 Carlon et al (2019), Financial Accounting: Reporting, analysis and decision making, 6th
Edition, Chapter 1: BBS 1.8 (p. 92)
 cpaaustralia (2019). APES 110. [online] Cpaaustralia.com.au. Available at:
https://www.cpaaustralia.com.au/professional-resources/accounting-professional-and-
ethical-standards/apes-110-code-of-ethics-for-professional-accountants [Accessed 11
Mar. 2019].
 Leonard, K. (2019). How to Resolve Ethical Dilemmas in the Workplace. [online]
Smallbusiness.chron.com. Available at: https://smallbusiness.chron.com/resolve-ethical-
dilemmas-workplace-11008.html [Accessed 11 Mar. 2019].
 McKenzie, R. (2019). US anti-corruption body charges BHP Billiton over Beijing
Olympics hospitality. [online] The Sydney Morning Herald. Available at:
https://www.smh.com.au/business/us-anticorruption-body-charges-bhp-billiton-over-
beijing-olympics-hospitality-20150521-gh692q.html [Accessed 11 Mar. 2019].
 Rafner, D. (2019). Common Ethical Workplace Dilemmas. [online]
Smallbusiness.chron.com. Available at: https://smallbusiness.chron.com/common-
ethical-workplace-dilemmas-748.html [Accessed 11 Mar. 2019].
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