Principles Of Business Ethics Research Articles

Audit risk model as a corporate social responsibility implementation of certified public accounting firms (evidence from Indonesia)

Purpose – The conduct of this research represents part of an effort to modify audit risk model (ARM) as an implementation of corporate social responsibility (CSR) by certified public accounting (CPA) firms. It is intended to make clear the phenomena about the relationship between audit risk (AR), implementation of business ethics principles (IBEP) and corporate governance risk (CGR).Design/methodology/approach – The method used was hypothesis testing. Unit of analysis was individual (i.e. Indonesian CPA), and the gathering of data was cross‐sectional. The sample was determined by purposive sampling. Data were collected using questionnaires, and data analysis was conducted by structural equation modeling (SEM).Findings – According to Indonesian CPAs' perception, the AR is affected by the client's CGR, whereas the client's IBEP does not affect AR, but clients' CGR and IBEP both significantly affect AR. It is suggested: first, that the next researcher should study audit risk related to business ethics. Secon...

Understanding the Role of Moral Principles in Business Ethics: A Kantian Perspective

ABSTRACT:Does effective moral judgment in business ethics rely upon the identification of a suitable set of moral principles? We address this question by examining a number of criticisms of the role that principles can play in moral judgment. Critics claim that reliance on principles requires moral agents to abstract themselves from actual circumstances, relationships and personal commitments in answering moral questions. This is said to enforce an artificial uniformity in moral judgment. We challenge these critics by developing an account of principle-based moral judgment that has been widely discussed by contemporary Kantian scholars. In so doing we respond to some basic problems raised by so-called “moral particularists” who voice theoretical objections to the role of principles as well as to contemporary business ethicists who have criticized principle-based moral judgment along similar lines. We conclude with some future areas of research.

KETERKAITAN KUALITAS TATA KELOLA KORPORASI, IMPLEMENTASI PRINSIP ETIKA BISNIS DAN POTENSI KECURANGAN PELAPORAN KEUANGAN

The purpose of this research is to make clear the phenomena about the relationship between the likelihood of the financial reporting fraud, the implementation of business ethics principles and the quality of corporate governance. The objective of this research is to test empirically about them, based on auditors’ perception. The method used or the detailed of the study are: the nature of the study was hypothesis testing; the type of investigation used was causal relationship; the extent of researcher interference was minimal; the environment where the research undertaken was field experiment; unit of analysis was individual, ie. the Public Accountants; and the frequency of gathering the necessary data was one-shot or cross-sectional. The source of data was Indonesia Public Accountants which formed as population, and the sample were determined by purposive sampling method. Sample data were collected using questionnaire circulated by mail and research assistants. Data analysis was conducted by Structural Equation Modeling (SEM). The results showed some empirical evidences : According to auditors’ perception, the likelihood of financial reporting fraud are (is) affected by client’s corporate governance quality and/ or implementation of the business ethics principles. Based on those results, it is suggested: First, to the next researcher, to study the relationship between financial reporting fraud and oversight committee, such as risk management and/ or nomination committee. Second, to the management, to minimaze the financial reporting fraud by strengthening the quality of corporate governance and implementation of business ethics principles.

The Financial Meltdown of 2008: The Perspective of Jewish Law

One of the great ironies of the financial meltdown of 2008 – which was really more of a values meltdown – is that very few U.S. laws were actually broken. This paper investigates the financial crisis from a different legal perspective – that of Jewish law, using six framing principles: misleading with bad advice; deception and fraud; bribery, both outright and subtle; honest weights and measures; conflicts of interest; and transparency. Each of these is used as a lens through which to view the activities and behaviors that caused the current financial debacle and, in the process, almost totaled the global economy. The paper concludes that Jewish law was violated at every step of the way towards the current financial catastrophe. Had the bankers, auditors, rating agencies, politicians, regulators, and mortgage brokers followed the principles of business ethics described in Jewish law, the global financial crisis would not have occurred.

Wirtschftsethik und Unternehmensethik Zwei Kurzdarstellungen(Economic Ethics and Business Ethics Two Articles)

Economic ethics describes the interaction of ethics and economics in explaining human action and in giving normative advice to ethically justifiable and efficient choices of action. As ethical economy, it analyses the ethical conditions of coordination in markets and the economic conditions of ethically legitimate behaviour. Ethical economy is a theory of the ethics and culture of the economy. Formal ethics is the pre-coordination of the economic coordination of the price system, material value ethics is the clarification of the value categories of goods and a general theory of value and good. Economic ethics is applied to the questions of incomplete contracts, professional ethics and the marginal ethics of an industry, and conflicts of interest. Business ethics describes the role of ethics in commercial firms and not-for-profit organisations. It is an organisational ethics and an individual ethics since there is organisational and individual failure to act properly. Individual ethics can neither be substituted for institutional ethics nor institutional ethics by individual ethics. The basic principles of business ethics in business interactions are mutual value creation and serving contracts. The role of the manager is not only to be the agent of the owners or shareholders but to be the fiduciary of the whole firm and to act in the common interest of the firm. The right incentives must be set in firms since there are also perverse incentives. Triple bottom line accounting that encompass ethical and environmental performance indicators introduces richer criteria of business success.

Corporate Social Responsibility (CSR) as a Model of 'Extended' Corporate Governance: An Explanation Based on the Economic Theories of Social Contract, Reputation and Reciprocal Conformism

This paper first sets a definition of corporate social responsibility (CSR) as an extended model of corporate governance and then accounts for a voluntary approach to CSR, meant as voluntary compliance with CSR strategic management standards, in terms of an economic theory of self-regulation based on the concepts of social contract, reputation and reciprocal conformism. The paper argues that extended fiduciary duties toward all the firm's stakeholders are needed because of the same neo-institutional analysis of the firm that justifies it as a unified system of governance of economic transactions based on authority relations and residual rights of control. The key concept here is that of abuse of firm's authority vis-a-vis the stakeholders who hold incomplete contracts with the firm. Extended fiduciary duties are singled out from the model of a Social Contract amongst the firm's stakeholders. This provide for a clear cut and calculable criterion of strategic management no less able to set a bottom-line to the firm management than the profit maximisation principle, while being able of answering legitimate claims of fair treatment from all the firm's stakeholders. Such a task is accomplished by an application of the theory of bargaining games to the Social Contract of the firm, which employs the Nash-Harsanyi bargaining solution as a normative criterion for strategic management and corporate governance, providing an answer to the deficit of uniqueness problem raised by Michael Jensen (2001) against the notion of stakeholders value. Then, the paper distinguishes two models of self regulation (the discretionary one, and the explicit-norms-cum-self-enforcement one) and argues that while incomplete contracts and imperfect knowledge debar form resorting to reputation effects in order to support discretional self-regulation, on the contrary an explicit standard for CSR strategic management, based on general and abstract business ethics principles and precautionary protocols and rules of behaviour - both publicly shared by stakeholders and firms through social dialog - make possible to put again at work the reputation mechanism inducing endogenous incentives of compliance with a voluntary standard. The paper here suggests how (by both fuzzy logic and default reasoning) a CSR Strategic Management Standard may work as a cognitive gap filling tool with respect to the firm's commitments and the stakeholders' expectations in presence of incomplete information. Moreover recent developments in the theory of conformist non-purely-self-interested preferences add motivational force to the basic result about self-enforcement of a CSR management standard. Hence, conformist preferences solve the problem of optimal mixed strategies that otherwise could enable the firm inducing the stakeholders to trust it without really conforming to a CSR standard. This result is given a formal proof in sec.11. The paper concludes with a collusion-proof design of intermediate social bodies (civil society institutions) that may answer the demand for assurance and external verifiability of CSR standards compliance by independent third.

Business Ethics as Critical Approach

The following sections discuss some issues pertaining to the status and meanings of critical reflections in business ethics. The starting point is that ethics originally always includes critical-normative perspectives and polemical aspects, and, according to this, critical approach is not supplement to business ethics, but a necessary component of it. This paper is divided into three parts. In the first part I demarcate some selected broad issues in relation to the general perspective of critical reflection. The next section outlines the in-depth consequences of general outlook in respect of critical scope of business ethics, that is to say, in this part the critical capacities of business ethics are to be examined in the light of general principles previously put down. This section focuses on some controversies, questions and debates on the scope of critical reflection in business ethics. The third part looks at the description of empirical tendencies relevant for the developing of practical rules and critical analysis in business ethics, and sets the proposal for the operationalisation of critical principles of business ethics.

Philosophy, Science and Business Ethics: Frederick's New Normative Synthesis

After examining Frederick's charge in his recently published Values, Nature, and Culture in the American Corporation that philosophers and others in the field of business ethics and business and society ignore nature and technology, the paper investigates Frederick's attempt to articulate and defend a New Normative Synthesis (NNS). Since the NNS is the result of a synthesis between Frederick's theory of business values and the body of principles in business ethics, I focus on the nature of each component, the nature of the synthesis, and the nature of the resulting NNS itself. Inquiry reveals serious questions about the explanatory value of the theory of business values as a descriptive theory, as well as serious questions about the defense of the theory as normative theory. The analysis also discloses several possible interpretations of the NNS.

Ethical congruency of constituent groups

This research investigates the perceptions of five constituent groups of an accredited business school — their perceptions of others' ethics, of their own ethics and ideal values, and of how business ethics can be improved. Self-described behavior from the constituent groups is quite similar, yet is decidedly different from that which respondents felt others would do. Undergraduate business students tended to have the lowest estimation of others' ethics in addition to the least ethical self-described behavior compared with other constituent groups. All constituents were solidly in favor of improving ethics by developing principles of business ethics, requiring ethics courses in business schools and introducing industry codes of ethics. People are much more ethical than they are perceived to be. Knowing that others are more ethical may in turn cause other people to act more ethically. Similarly, believing that others are less ethical may encourage less ethical behavior.

Ethical issues in the selection interview

This article evaluates various aspects of the selection interview in terms of the major principles of business ethics. It looks at both interviewer and interviewee behavior and examines the ethical questions that arise around five key themes: Preparation for the interview; Openness, disclosure and the invasion of privacy; Honesty and impression management; Power relationships in the interview; The use of interview information in decision making. It is argued that clear guidelines for ethical behavior in the interview are needed and would actually serve to increase the effectiveness of the method. Various topics that require empirical investigation are identified, and some parallels drawn with research on other assessment methods.

Principles of Business Ethics: Their Role in Decision Making and an Initial Consensus

This article describes how ethical principles can be used in the decision‐making process. It describes a survey conducted amongst a group of managers and business students, who ranked a number of ethical principles in order of usefulness and applicability to their work. The notion of the “ethics screen”, composed of a number of ethical principles, is described. The article concludes that ethical principles are valuable only if there is a desire on the part of individual decision‐makers for them to be applied.