Title Details

Brenda Shay Duska MT, CPA, is currently a manager at Del Pizzo & Associates, specializing in taxation. She is a member of the Pennsylvania Institute of Certified Public Accountants and the Society for Financial Service Professionals.  She serves on the boards of the non-profit, MusicWorks and the Greater Philadelphia Chapter of the Society for Financial Service Professionals.

Julie Ragatz is Assistant Professor of Ethics at The American College and the Associate Director of The Center for Ethics in Financial Services. She is currently finishing her PhD in philosophy at Temple University where she concentrates on ethical theory and applied ethics.

Acknowledgments x

Preface xii

Introduction 1

1 The Nature of Accounting and the Chief Ethical Difficulty: True Disclosure 9

I The Nature of Accounting 10

II Ethics of Disclosure 14

III The Financial Statement 17

IV Roles an Accountant can Fulfill 20

V Development of Explicit Accounting Standards and Regulations 22

VI The Sarbanes–Oxley Act (SOX) 27

VII Recent Scandals that Provoked More Regulation 29

VIII Conclusions 30

2 Ethical Behavior in Accounting: What Is Ethics? 31

I What Is Ethics? 34

II Ethics: The Intellectual Enterprise 35

III Actions 35

IV Social Practices, Institutions, and Systems 36

V Why Study Ethics? 36

VI Being Ethical: How to Determine What to Do 38

VII Questions to Ask to Justify An Action: The Basis of Ethical Theory 42

VIII Using the Reasons 46

IX Ethical Dilemmas 47

X Some Classic Moral Dilemmas 48

3 Ethical Behavior in Accounting: Ethical Theory 51

I Egoism 52

II Utilitarianism 57

III Kant and Deontology 61

IV Deontological Ethics 62

V The First Formula of the Categorical Imperative 64

VI The Second Formula of the Categorical Imperative 65

VII Virtue Ethics 66

4 Accounting as a Profession: Characteristics of a Profession 69

5 Accounting Codes of Conduct 77

I AICPA Professional Code of Conduct 79

II Code Principles 80

III Criticisms of the Code of Conduct 92

6 The Rules of the Code of Conduct 93

I Section 100 – Independence, Integrity, and Objectivity 94

II Section 200 – General Standards Accounting Principles 99

III Section 300 – Responsibilities to Clients 102

IV Section 400 – Responsibilities to Colleagues 103

V Section 500 – Other Responsibilities and Practices 103

7 The Auditing Function 109

I The Ethics of Public Accounting 113

II Trust 115

III The Auditor’s Responsibility to the Public 116

IV The Auditor’s Basic Responsibilities 118

V Independence 122

VI Independence Risk 127

VII Professional Skepticism 131

VIII Reasonable Assurance 133

8 The Ethics of Managerial Accounting 135

I Reasons Used to Justify Unethical Behaviors 140

II Blowing the Whistle 144

9 The Ethics of Tax Accounting 151

10 Ethics Applied to the Accounting Firm 167

I Accounting as a Business 169

II The Social Responsibility of Business 170

III Good Ethics is Good Business 175

IV Ethical Responsibilities of Accounting Firms 177

V The Accounting Profession in Crisis 177

Afterword: Current Debates on Accounting Issues 185

I Fair Value and Principles vs. Rules 185

II Fair Value Accounting 189

III Arguments For and Against the Fair Value Approach 193

IV Summary 198

V Principles vs. Rules 199

VI Introduction 199

VII Isn’t GAAP Already Principles Based? 200

VIII An Example: The Continental Vending Case 204

IX Recent Developments of “Present Fairly” 206

X A Better Question 207

XI Argument for a Rules Based Approach 208

XII What Would a Principles Based Approach Look Like? The True and Fair Override 211

XIII Argument for a Principles Based Approach 212

XIV Conclusion 215

Appendix A: Summary of Sarbanes–Oxley Act of 2002 217

Appendix B: The IMA Code of Conduct for Management Accountants 230

Index 233

"This book is a long awaited and significant contribution to business ethics. At last, a book that addresses the full range of accounting, tax, and audit issues, integrating the perspective of the accounting profession with that of a trained ethicist. This is a must-read for everyone in the accounting profession and in business ethics. Bravo Duskas!"
—Patricia H. Werhane, Darden Graduate School, University of Virginia

"Accounting Ethics offers a superb, accessible introduction to the traditions and responsibilities of individual accountants and their firms."
—Carlin Romano, The Philadelphia Inquirer

"... the author's clear, practical, and jargon-free presentation makes this book a valuable resource or nonaccountants and required reading for every accountant and student of accounting."
—Choice, November 2003

"As a guide to the basic issues and ideas concerning ethics for students with little prior exposure to the debates in accounting and the theories in ethics, this text is likely to be very useful. It is easy to read, informative and provides a good base for discussion."
—European Accounting Review

"This book should be read by anyone interested in accounting.  It shows how accounting and ethics are connected, and you can't be a good accountant without taking ethics into 'account.'"
—R. Edward Freeman, The Darden School, University of Virginia

Other reviews from the first edition:

"...this textbook is likely to be very useful. It is easy to read, informative and provides a good base for discussion."
—Stuart Turley, University of Manchester

"Accounting Ethics is a book for our troubled times. The Duskas provide a basic primer on ethics for accounting that is helpful to accountants and non-accountants alike. They deftly weave the saga of Enron and Arthur Andersen through a practical and realistic presentation of accounting ethics."
—Thomas W. Dunfee, The Wharton School, University of Pennsylvania