Deontology and Utilitarianism in Accounting

Deontology and Utilitarianism in Accounting

Accounting ethics are important to ensure that the accountant performs their task in the highest ethical standard according to the code set by the American Institute of Certified Public Accountants (AICPA). As mentioned in the article, it is possible to have different arguments as a result of looking at the code of professional conduct from either a deontological or utilitarian point-of-view. In order to prevent these different schools of thought which could have dire ethical implications, it is important for the accounting principles to be made more stringent to eliminate any doubt or shortcoming in the interpretation of the rules. This is what is envisioned in the Sarbanes-Oxley Act.

The Sarbanes-Oxley Act was passed in the year 2002 to protect investors from falling prey of possible fraudulent activities conducted by corporations in collaboration with accountants. These strict rules have prevented the reoccurrence of accounting scandals such as those that took down Enron and Worldcom leading to widespread fear by investors. Therefore, the act aims to regain the confidence of the investors in the accounting procedures and that their investment is safe. It also prevents accountants from colluding to defraud investors by working through the loopholes in the code of professional conduct of accountants Hess, 2007()

Streamlining of the ethical view of the practice of accountants is important since it will help the accountants perform their duties in a moral fashion that transcends the mere gain that they may receive from unethical acts or maximization of profits by companies. This will provide a long-term solution for the business world since it will increase investor confidence in the regulation of accountants as well as prevent billion-dollar scams from being engineered through accounting procedures.

Article 2

Professional ethics are founded on a deontological perspective since they are designed to serve the general interest of the public. As stated in the AICPA code of conduct, the accountants need to put aside their own points-of-view and use the unified school of thought that is presented in the code. This means that the accountants should work on a deontological perspective since the utilitarianism perspective is akin to breaking or bending the rules in order to satisfy their own interests.

The professional code of conduct was developed as a result of regulating the accountants who had failed to self-regulate themselves. This is also the reason behind the Sarbanes-Oxley Act. Naturally, people are known to think about themselves first without considering the interests of others. Therefore allowing the utilitarianism point-of-view will simply be allowing the accountants to do as they please. Every person has their own virtues and thoughts on what is right or wrong. The basic tenet of utilitarianism will thus hurt the businesses since it will bring about egotism that will maximize defrauding of unsuspecting investors as a result of material selfishness which is natural in human beings.