18.2 Ethical dilemmas and decision-making

Cards (33)

  • What is the primary aim of ethical principles in accounting?
    Maintain financial integrity
  • Accountants are accountable to stakeholders such as investors, creditors, and the public
  • Adhering to ethical standards in accounting contributes to the integrity of the financial system.

    True
  • What is a conflict of interest in accounting?
    Conflicting personal interests
  • Compliance issues arise when deciding whether to report unethical or illegal activities
  • Resolving ethical dilemmas in accounting requires considering responsibilities to stakeholders.

    True
  • Professional judgment is essential for ethical decision-making in accounting.

    True
  • Match the factor contributing to ethical dilemmas with its description:
    Conflicting Interests ↔️ Accountant's personal or professional goals conflict with ethical duties
    Pressure from Management ↔️ Demand to misrepresent or conceal unfavorable data
    Lack of Clear Guidance ↔️ Ambiguity in accounting standards or policies
  • Ethics in accounting involves adhering to a set of principles and moral standards that guide accountants in making honest and fair decisions
  • Ethical principles in accounting ensure the accuracy and transparency of financial data.
    True
  • Why is ethical adherence crucial in accounting?
    Maintains trust
  • Match the ethical dilemma with its description:
    Conflict of Interest ↔️ Personal interests clash with professional duties
    Pressure to Misrepresent Data ↔️ Management demands concealment of unfavorable information
    Confidentiality Breaches ↔️ Unauthorized disclosure of sensitive data
  • Disclosing client information without authorization is a breach of confidentiality.
    True
  • What are the core ethical principles tested by accounting dilemmas?
    Integrity, objectivity, confidentiality
  • What is the impact of conflicting interests on accountants?
    Compromises integrity
  • Ambiguity in accounting standards can lead to a lack of clear guidance
  • How does management pressure affect accountants?
    Compromises integrity
  • Ethics in accounting involves adhering to principles and moral standards to make honest and fair decisions
  • Sticking to ethical standards can maintain transparency and accountability to stakeholders.
    True
  • A conflict of interest arises when an accountant's personal or professional interests conflict with their duty to provide objective and impartial financial information
  • Unethical choices by accountants can lead to a loss of trust, damaged reputation, and public outrage
  • Match the stakeholder with the impact of ethical financial reporting:
    Investors ↔️ Protects their interests
    Creditors ↔️ Ensures responsible lending
    Employees ↔️ Promotes trust and security
    The public ↔️ Upholds financial integrity
  • What is the impact of accurate financial reporting on investors?
    Protects their interests
  • What is the dual aim of ethical principles in accounting?
    Integrity and accountability
  • What is the ethical dilemma of compliance issues in accounting?
    Reporting illegal activities
  • Facing pressure to misrepresent financial data is an ethical dilemma for accountants.
    True
  • What is the term for disclosing sensitive client information without authorization?
    Confidentiality breach
  • Steps to resolve ethical dilemmas in accounting
    1️⃣ Identify the dilemma
    2️⃣ Analyze ethical principles
    3️⃣ Evaluate consequences
    4️⃣ Make a decision
  • Pressure from management is a common factor that can lead to ethical dilemmas in accounting, compromising their integrity
  • A lack of clear guidance in accounting standards can contribute to ethical dilemmas.

    True
  • Match the ethical framework with its focus:
    Utilitarianism ↔️ Maximizing well-being
    Rights-based approach ↔️ Respecting individual rights
    Virtue ethics ↔️ Accountant's moral character
    Fairness or Justice approach ↔️ Ensuring impartial treatment
  • What is the primary focus of the utilitarianism framework in ethical decision-making?
    Overall well-being
  • The Fairness or Justice approach in ethical decision-making emphasizes equitable treatment for all stakeholders.

    True