Ethics Case Study: Financial Accounting Principles and Stakeholders

This case study focuses on ethical issues within financial accounting, specifically addressing a scenario involving a meat processing company's non-compliance with minimum wage regulations and its impact on employees. It outlines the application of ethical principles such as respect for autonomy, beneficence, non-maleficence, and justice. The assignment details an ethical decision-making model, identifying stakeholders like payroll and non-payroll employees, and government entities, while assessing the effects of unethical practices. The case study also examines the necessary duties of a financial accountant in ensuring compliance with ethical standards, including proper employee classification, accurate salary reporting, and the prevention of maleficence. It includes a list of references to support the analysis.

INTRODUCTION TO
FINANCIAL ACCOUNTING
Ethics Case 3

Overview of the Ethical Principles
 Principle of respect for autonomy (Obligation to respect the autonomy of
others)
 Principle of beneficence (Obligation which is to bring good in all our actions)
 Principle of non-maleficence (Obligation not to cause harm to others)
 Principle of justice (Obligation to provide the others with what they own and
deserve)

Overview of Ethical Decisions
Making Models
 Gathering of the facts
 Determining the ethical issue
 Consideration of ethical principles and responsibilities
 Identify the stakeholders impacted
 Possible solutions for taking the appropriate actions

Overview of ethical decisions
making models

Stakeholders involved in the
situation and their effect by the
ethical issues
 Payroll employees of the meat processing company
 Non-Payroll employees of the meat processing company
 Future Employees
 Government

Stakeholders effect by the ethical
issues
 Nonpayroll employees are at financial loss
 Company may terminate such employees at their own discretion and
without any notice
 Employees are not treated as per principle of human dignity and
principle of justice
 Employees are deprived of any form of health insurance benefits or
employ damages which could have been summoned at the court
 Employees not be able to provide any legitimate information of their
employment to other business

Ethical Issues
 Ethics of minimum wage legislation – Non compliance of minimum wage
 Maleficence towards employee’s by causing direct harm to the
employees financial condition, reputation and obstruction in exercising
legislative powers
 Company is not obliged to share high amount of profit with such
employees
 Serious ethical concern relating to future of the recruitment process and
employee relations with non-employees

Necessary duties as a financial
accountant
 Check for validity of the financial statements and perform the duties in
compliance with applicable principles, laws and standards
 Appropriate classification of the employees who are recruited as a regular
employee and those who are employed by contractor’s services
 Ensure that the expenses associated to the salaries are credited to both
non-payroll and payroll staffs as per contract of appointment
 To ensure that a separate account is maintained for staffs who are in
payroll and outside the payroll of the company

Necessary duties as a financial
accountant
 Ensure that companies not involved in any form of maleficence which will
hamper its future reputation
 Inform supervisor about the non-payment of minimum wages the
employees even after having working holiday visas
 Ensure that employees of all category receive an official salary slip at the
end of each month
 Inform the human resources manager about providing official formal
contracts to the employees

References
 Business Ethics Highlights (2015) Year in Review : The Top 10 Business Ethics Stories of 2015, Business Ethics Journal Review. Available
at: https://businessethicshighlights.files.wordpress.com/2015/12/beh_year_in_review_2015.pdf.
 Chen, C. P. and Lai, C. T. (2014) ‘To blow or not to blow the whistle: The effects of potential harm, social pressure and organisational
commitment on whistleblowing intention and behaviour’, Business Ethics, 23(3), pp. 327–342. doi: 10.1111/beer.12053.
 Ethics, B. (2014) ‘Public Relations and Corporate Social Responsibility : Some Issues Arising’, Journal of Business Ethics, 13(2), pp. 111–
123.
 Ethics, B. and Icade, I.- (2016) ‘Apuesta por la Tecnología y lucha contra la Corrupción: la oportunidad perdida en los Objetivos de
Desarrollo Sostenible’, Tiempo de Paz, (2016), pp. 77–84.
 Frynas, J. G. and Yamahaki, C. (2016) ‘Corporate social responsibility: Review and roadmap of theoretical perspectives’, Business Ethics,
25(3), pp. 258–285. doi: 10.1111/beer.12115.
 Golob, U. and Podnar, K. (2014) ‘Critical points of CSR-related stakeholder dialogue in practice’, Business Ethics, 23(3), pp. 248–257.
doi: 10.1111/beer.12049.
 Jamali, D. R., El Dirani, A. M. and Harwood, I. A. (2015) ‘Exploring human resource management roles in corporate social responsibility:
The CSR-HRM co-creation model’, Business Ethics, 24(2), pp. 125–143. doi: 10.1111/beer.12085.
 Kocet, M.M. and Herlihy, B.J., 2014. Addressing value‐based conflicts within the counseling relationship: A decision‐making
model. Journal of Counseling & Development, 92(2), pp.180-186.
 Schwartz, M. S. (2014) ‘Business Ethics’, in Encyclopedia of Business Ethics and Society, p. 2592. Available at: http://www.sage-
ereference.com/view/ethics/n96.xml.
 Web.mnstate.edu. (2018). Four fundamental principles of ethics. [online] Available at: http://web.mnstate.edu/gracyk/courses/phil
%20115/Four_Basic_principles.htm [Accessed 14 May 2018].

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