ACCT20080 Ethical Case Study: Australia - Theories and Models

This case study analyzes the ethical dilemmas faced by a company, focusing on the behaviors of Mr. Goodrich and Arnold. It applies ethical theories such as egoism, utilitarianism, and deontology to evaluate their actions. The study utilizes the AAA model to explore ethical decision-making processes and APES 110 to address threats and safeguards for an accountant. The analysis examines how different ethical frameworks can be used to understand the complexities of business ethics, including the pressures faced by managers and accountants, and the importance of ethical conduct in maintaining a company's integrity and financial stability. The case study explores the tension between achieving business goals and adhering to ethical principles, highlighting the challenges of making sound decisions in difficult situations.

ETHICAL CASE
STUDY
AUSTRALIA
Running Head: ETHICS 0

ETHICS 1
Executive summary
“Ethics is the process which can be used in both art and science. It teaches them
ways of predicting the things whether they are right or wrong, good or bad.”
While moving forward with this report the various philosophies of ethics such as
utilitarianism theory, deontology theory and egoism theory will be discussed using the
case study related. Where the behaviors of Goodrich and Arnold will be evaluated using
the multiple theories of ethics. All the philosophies of ethics defines very well all the
need of ethics to in any type of profession and their organizations. Further on the basis
of assumptions the AAA model of making ethical decisions will be used by Mr. Goodrich
to take up an ethical decision regarding the current situation faced by the company. In
the last stage, the APES 110 will be used to reflect the principles, threats, and
suggestions which can guide Arnold who was assumed to be the member of CPA in
Australia. Finally, this report will be concluded and be properly referenced.

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Table of Contents
INTRODUCTION...........................................................................................................................3
IMPOSITION OF THE THEORIES OF ETHICS......................................................................3
Analysis of Mr. Goodrich behavior using the theory of egoism................................3
Analysis of Mr. Goodrich and Arnold’s behavior using the theory of
utilitarianism............................................................................................................................4
Analysis of Arnold behavior using the theory of deontology....................................5
AAA MODEL USED FOR ATTAINING ETHICAL DECISION..............................................6
APPLICATION OF APES110.....................................................................................................8
Threats and safeguards faced by Arnold in this case study......................................9
CONCLUSION............................................................................................................................11
REFERENCES............................................................................................................................12

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INTRODUCTION
Ethics basically deals with perspectives of goodness and badness or rightness
and wrongfulness of a particular thing or the situation. But the definition of good and bad
keeps on changing from time to time and people to people in the various situations.
According to Socrates “truth and goodness must be searched for and found through
logical arguments.” Plato defined ethics as to strive perfection, ideas must be used
against implementing imperfect physical acts.” So for providing a base to the viewpoints
of the individuals and guides them for making sound decisions, ethical theories are
used.
Therefore in this report the first part will emphasis upon the behavioral pattern of
Mr. Goodrich and Arnold by using the different theories of ethics such as the egoism,
utilitarian and deontology. In the second part, AAA decision-making model will be used
by assuming that Mr. Goodrich is listening to Arnold and wants to reach an ethical
decision and lastly in the third part the APES 110 model will be used to throw light on
threats, policies, and suggestions for the faced threats by Arnold will be reflected.
Second and third part will totally base upon assumptions. Ethical theories thus tends to
make an attempt for answering and explaining the ways to people for living together in a
society and with enhanced productivity.
IMPOSITION OF THE THEORIES OF ETHICS
Analysis of Mr. Goodrich behavior using the theory of egoism
The theory of egoism here is not at all related with the approach of self-centered
behavior which is its general perception (Stirner & Rachels, 2016). To build any type of
capitalism the main thing required is the personal ambition and achievements of the
individuals. Though it is difficult but it is just not impossible for the egoist to also take
such decisions which are ethical in nature and provides considerable benefits to many
(Graham, 2011). For example a surgeon may be motivated to have a dream of
achieving a castle, boat, swimming pools etc. but in the end of the day the reality cannot
be changed that he is a good surgeon.

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Ethical egoism suggests the professionals act for their self-interest and it is very
different from the psychological egoism, where the individuals are claimed to work for
their interest only (philosophy.lander.edu, 2009). It also differs from that of the rational
egoism as the basic consequence of this theory is to will just benefit the doer without
harming the other and thus will be considered as ethical in this sense (Chung, 2016).
Though mainly self-interest is promoted by this theory but it also involves
innovation and entrepreneurialism and this can be seen very well in the behavior of Mr.
Goodrich. As his basic concern was attaining success at each and every cost, and was
strictly against all those who can even make attempts to ruin the name of his company
and in this way he was also ready to become unethical. All these factors reflect egoism
but somewhere or the other his intention was to take stand for his company and he
never wanted to hurt others in between.
The utilitarianism theory can be combined with that of egoism for promoting the
restrained and enlightened form of egoism where the Quote “What is good for me is
good for you “can be taken into consideration (philosophy.lander.edu, 2009). The
decisions made by Mr. Goodrich clearly promotes his own benefit of being the best and
remain the same and this also has a very beneficial outcome for the company.
Analysis of Mr. Goodrich and Arnold’s behavior using the theory of
utilitarianism
The theory of utilitarianism mainly endorses the policies for the general benefits
and its outcomes. It also helps in resolving the struggles between interests of various
peoples and also assists in making of decisions which are focused on the result
basically. This theory mainly concentrations on that outcome which is really very good
and provides happiness to the people (Robert, 2018).
According to Curtin, Gallicano, and Matthew, the philosophy of utilitarianism is
used to circumvent the conflict and achieve synchronization, those cases where some
ethical circumstances are raised (Cavalier, 2002). Jeremy Bentham defined this theory
of ethics as the imposition of the penalties of the result of the common good. The
universal goal of this theory is to maximize happiness and minimize the sufferings of

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mostly all the people (Robert, 2018). These theories are based basically on the ability to
predict all the consequences of the actions done by them Hollander, 2016.
In the given case study where Mr. Goodrich, who was the Chief Operating Officer
COO. of the company who had a very important place in the running of the company
and he always wanted to show the visitors that he had an exceptional position in the
company. Though he was an outstanding manager who had always thought of attaining
the best result for himself and the company without missing any bonus for his work in
the annual performances. This policy of attaining the best for the company at any cost
made the investors love him and also considered him as an untouched person.
Although he had an image of amending the laws by his wish and up to unlimited amount
but was considered as the toughest achiever of the results. He was ready to take up all
the unethical ways also for avoiding the threat to the name of his company. The best
example of this was seen in the scenario where the company was undergoing a very
worst situation was also not able to pay off salaries to its workers but still, Mr. Goodrich
was trying to cover up the entire situations by asking CEO and CFO to keep silence by
pressurizing them and threatening them to fire.
Whereas Arnold, who was the management accountant of the company was
even after knowing the bad condition with which their company was undergoing through
and also knew the boss was very angry, but still was trying to explain his point in a very
calm way without being hyper. He tried and performed his duty in a very empathetic way
upon being asked by the head to make a report concerning the undergoing status of the
company. He was all ready to work the entire nights just to get through with his works.
These qualities of both Arnold and Goodrich reflects that they were dedicated
towards their works and wanted to attain success not only for themselves but also for
the company. There were difference in the thoughts process and the interest of both but
ultimately goal was one that was to attain good outcome.
Analysis of Arnold behavior using the theory of deontology
According to Kant deontology forces a human to take in consideration of the
moral rights of others. The rights such as legal rights, human rights, freedom of speech
and religion and the right to safety and healthy workplace (Chandler, 2019).. Thus he

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defined this theory as those rules which are necessary and which reflects the duty of a
person towards its family, nation, and religion or any other (Unwrapped, 2019).
In the entire case study, Arnold was found to be very much passionate towards
his duty irrespective of worrying about any outcome in the future. He had that much
dare to stand before his boss and talk to him regarding the entire situation which also
includes the hot red face of his boss and all and that too with full confidence and without
any fear of result or any other. He dared to be present and share his point of view with
full confidence. This shows his dedication towards his boss as well as the company. He
was a genuine person who was worried for the company as well as the workers who
worked for the welfare of the company.
AAA MODEL USED FOR ATTAINING ETHICAL DECISION
This American Accounting Association (AAA) model is used to attain a
systematic framework for arriving at the best course of action. It uses the professional
judgment standards in attaining the object, integrity, and recognition of responsibility
while making a decision (aglobalwall, 2019). Thus it can be said that ethical decision
making are those process where the responsibility of the people are to make choices
between the varied alternatives which are intending to attain the goals in the business
by minimizing the conflict in the values (Bobek, Hageman, & Radtke, 2015).
So in the given case study where it was presumed that Mr. Goodrich was
carefully listening to the report made by Arnold along with interest and wants to come to
an ethical decision i.e. to maximize the good outcomes for the company and its workers
and this there are different steps in making an ethical decision and those are as follows:
STEP
NUMBER
HEADING CONTENT
1 Disclosing the facts of
the case
Mr. Goodrich was COO of the company is
very much involved in hearing the report
made by Arnold. CFO is considered to be
very impressive and contains propositions
that can prove to be very helpful in attaining
the maximum good outcome for the company

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and the workers employed within as the
company was facing a traumatically diverse
situation.
2 Ethical issue faced in the
case
The company was facing a incredible loss
and was also not able to provide salaries to
the employees working in the factory. This
was a completely unethical situation which a
company was going through. Mr. Goodrich
was a man who just wanted to attain the
success he can never bare any kind of defeat
or insolvency for his reputation and also on
the name of the company.
3 The norms, principles,
and values related to the
case
Following the guidelines of AAA model of
decision making all the professional must
strictly follow all the fundamental principle
throughout his working period, and all the
auditors and the finance managers or the
other officials are assumed to present the true
and fair statements. Impressing the client and
getting progress must not be the only motto of
the company.
4 Alternative courses of
actions
Basically two alternatives can be presumed
here in this case, first one is to it and pray that
no one notices the situation so being
undergone by the company and the second
option can be to disclose the entire situation
to the Fair Work commissions stating it to be
an innocent one and request them to provide
some time for fixing the error or make a few
arrangements with the banks and the workers
so to avoid the risk of insolvency.

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5 the best course of action By being inconsistent with step 3 the best
norms and principles which are needed to be
followed by Mr. Goodrich is to disclose all the
truths regarding the present situation of the
company to the commission or the bank, etc.
or there can be some other better way out.
6 Consequences of all
taken courses of action
The outcome of both the taken up acts can be
such that if 1st option is chosen then they
would have to wait for long so see the
outcome of their actions, it may be a long
process where the outcome cannot be
predicted. 2nd option may be beneficial as they
may buy some more time to collect money
and pay off the debts, and can also lend a
helping hand.
7 the decision in this scenario in relation to taking of the
ethical decision it would be better to go with
option 2 as here attest will get some time for
thinking better ways in the course of time and
would also be confident regarding the
outcome of the decision
Hence it can be attained that this model is a very influential one and can
influence all the spheres i.e. the working place, family, religion, legal system,
communities, and all the other professions in making those decisions which are ethically
sound. In this scenario Mr. Goodrich has attained a decision which sounds like being
ethically wise i.e. instead of cheating with others to hold up the hand of correctness.
APPLICATION OF APES110
For the need assumptions in the given case study the APES110 is basically divided into
3 sections where 200-280 paras provide the guidance for the accountants who are in

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practice. 281. X paras provide specific guidance to the auditors and safeguards their
independence and lastly para 291.x provides similar kind of guidance to the auditors
who are engaged in other assurance tasks.
Threats and safeguards faced by Arnold in this case study
Now, Arnold is presumed to be a member of CPA Australia so the APES 110 will
be functional on him and now under the case, he was asked by Mr. Goodrich to leave
the premises of the office and was threatened for not disclosing any of the facts that the
staffs of the factory were being unpaid to the anyone outside the office. So now all the
relevant fundamental principles which could be applied along with the faced threats and
the possible safeguards available to Arnold will be analyzed in detail.
Threat heading Connection with the case study
Self-interest Here the individual can ignore the public's
interest at large over its interest, in this
scenario also Arnold who was an
accountant was swayed away by its
interest and the provided incentives to
him by his boss for not disclosing the
underpayment factor of the staff to any
outsiders.
Familiarity Here an individual working in an
organization develops a family kind of
relationship with its boss or the clients
due to being associated with them for the
longest time. Familiarity factor can
hamper the professionalism and thus can
result in complete ignorance of the public
interest. In this scenario also Arnold who
was working as an accountant was
sharing a long term relationship with the
company and Mr. Goodrich that long term
relationship might prevent him to act

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against the company and his boss.
Self-review Here a member stops evaluating its work
for its colleagues. The lack of evaluation
of one's work could lead to corruption in
the professional code of conduct within
the profession.
Intimidation Here an individual can be pressurized by
the higher authority for not acting in the
interest of the public. Arnold was also
being dominated by the decision of his
boss for not disclosing the nonpayment
factor to any outer person or else he will
be fired from the job his boss was
threatening him.
Advocacy Here the member can support his client
or the judgment of the employees. Here
the member is aware of the unethical acts
but becomes a salesperson for the
employees. In this case, also Arnold
might act as a salesperson for his boss
Mr. Goodrich.
Here the safeguards provided to Arnold can basically be divided under two heads
the first one among them is to have adequate knowledge of APES110 and its rules and
legislations i.e. safeguards created by professions. The second one is the safeguard in
the environment of working
There are five important principles of this code. The first one is the integrity
principle which focuses on the honesty of the professional accountants while dealing
with the clients. So for evaluating the code of conduct of the accountants, it can be
considered as the solid rock of foundation. The code of conduct states that

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professionals must be honest and very straightforward and transparent while doing
business transactions. The second principle is related to objectivity which suggests that
the professional accountants must never take any of their decision based on the
influence of the others, or being emotional or biased, etc. (Fund, 2012) The next one is
professionalism skill and due care principle which suggests that accountants must
maintain the respect of their skill and knowledge at all levels of their job and act
according to the ethical standards. The next principle is the confidentiality principle
which determines that the professional accountants must maintain the confidentiality of
information provided to them, it is to be kept as a secret. Professional behavior can be
considered as the last principle, which is concerned with the relationship between the
client and professional which is to be very respectful (Krupenye, Kano, Hirata, Call, &
Tomasello, 2016).
CONCLUSION
Thus to conclude with the case study, it can be settled down that though Mr.
Goodrich was a very powerful personality and was also one of the very essential
members of the company, a sense of unethical news was present in him. He wanted
success for himself and the company also and for that, he was ready to take up with
any type of illogical things also. Arnold due to its position which was below Mr. Goodrich
was being threatened or pressurized to do something unethical in his eyes i.e. not
paying off to the workers working in the factory.
Hence it is very essential to follow all the ethical guidelines to attain success in
any kind of profession.

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REFERENCES
aglobalwall. (2019). AAA Model Ethical Decision Making. Retrieved from Business
Analysis: https://www.aglobalwall.com/aaa-model-ethical-decision-making/
Bobek, D. D., Hageman, A. M., & Radtke, R. R. (2015). The effects of professional role,
decision context, and gender on the ethical decision making of public accounting
professionals. Behavioral Research in Accounting, 27(1), 55-78.
Cavalier, R. (2002). Utilitarian Theories. Retrieved from Philosophy Department
Carnegie Mellon: http://caae.phil.cmu.edu/Cavalier/80130/part2/sect9.html
Chandler, R. C. (2019). Deontological Dimensions of Administrative Ethics Revisited. In
Handbook of Administrative Ethics. London: Routledge.
Chung, H. (2016). PSYCHOLOGICAL EGOISM AND HOBBES. Filozofia, 71(3).
Fund, I. M. (2012). Australia: IOSCO Objectives and Principles of Securities Regulation
—Detailed Assessment of Implementation. International Monetary Fund.
Graham, G. (2011). Theories of Ethics: An Introduction to Moral Philosophy with a
Selection of Classic Readings. London: Routledge.
Krupenye, C., Kano, F., Hirata, S., Call, J., & Tomasello, M. (2016). Great apes
anticipate that other individuals will act according to false beliefs. Science,
354(6308), 110-114.
philosophy.lander.edu. (2009, October 09). Ethical Egoism . Retrieved from Philosophy
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Robert, S. (2018, January 03). What is Utilitarianism? - Definition & Theory. Retrieved
from Intro to Business: Help and Review:

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https://study.com/academy/lesson/what-is-utilitarianism-definition-theory-
quiz.html
Stirner, M., & Rachels, J. (2016, August 26). Ethical Egoism. Retrieved from Seven
pillar institute Global Finance and ethics:
https://sevenpillarsinstitute.org/glossary/ethical-egoism/
Unwrapped, E. (2019). Deontology. Retrieved from McCombs School of Business:
https://ethicsunwrapped.utexas.edu/glossary/deontology