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Ethics in Economics

all types of professional misconduct by CPAs per year, and actions. It becomes readily apparent from early dis-
about nine of which involve breaches of professional cussions of ethics that philosophers and writers viewed
duties. State societies of CPAs also have enforcement ethics as a matter of choice. Individuals must make
mechanisms for their codes of ethics, and violations can choices in their lives. This is important to note—busi-
lead to public expulsion. nesses do not make choices. Choices are made and/or
implemented by individuals within the economic enter-
ETHICS FOR ACCOUNTANTS NOT prise. People in government make choices, people in edu-
IN PUBLIC PRACTICE cational institutions make choices, people in businesses
make choices, people with churches make choices; every-
Not all accountants work as public auditors. Those who
work for corporations as financial managers, management one is forced to make choices, and even the choice not to
accountants, and internal auditors may be CPAs, but a choose is a decision.
significant number are not. Over time, these accountants
and internal auditors have founded their own professional ETHICS IN ORGANIZATION
societies without state or federal legislation. These soci- Velasquez (2002) illustrated some important points
eties also promulgate professional standards ensuring all regarding organizations and their acts relative to individu-
members are appropriately qualified to do the work als in the organization. He stated:
required of them and that all members adhere to a code of
conduct or ethics somewhat similar to those of the I. A corporate organization exists only if (1) there exist
AICPA. Examples include the Institute of Management certain human individuals placed in certain circum-
Accountants’ Standards of Ethical Conduct, which apply stances and (2) our linguistic rules lay down that
to practitioners of management accounting and financial when those kinds of individuals exist in those kinds
management in corporations and not-for-profit institu- of circumstances, they shall count as a corporate
tions, and the Institute of Internal Auditors’ (IIA) Code of organization.
Ethics, which applies to all IIA members and to certified II. A corporate organization acts only if (1) certain
internal auditors. human individuals in the organization performed
SEE ALSO Accounting certain actions in certain circumstances and (2) our
linguistic rules lay down that when those kinds of
individuals perform those kinds of actions in those
BIBLIOGRAPHY kinds of circumstances, this shall count as an act of
American Institute of Certified Public Accountants. (2006, Janu-
ary). AICPA code of professional conduct. Retrieved February their corporate organization. (p. 16)
20, 2006, from http://www.aicpa.org/about/code/index.html
Linguistic rules are the rules of either written or spo-
Institute of Internal Auditors. (n.d.) Code of ethics. Retrieved
February 20, 2006, from ken language. In the above quote, it is pointed out that
http://www.theiia.org/index.cfm?doc_id=604 individuals make up the corporation or business and that
the corporation acts when these individuals carry out their
Institute of Management Accountants. (n.d.). IMA’s statement of
ethical professional practice. Retrieved February 20, 2006, assigned duties within the scope of the corporate author-
from http://www.imanet.org/ima/sec.asp?TRACKID= ity. However, since it is human individuals on whom the
&CID=191&DID=323 corporation depends, it is these individuals who are seen
New York State Education Department, Office of the Profes- to be responsible for moral duties and issues.
sions. (n.d.). Professional misconduct and discipline. Retrieved Businesses are the most significant institution in the
February 20, 2006, from http://www.op.nysed.gov/opd.htm
economic structure. As such, businesses are expected to
Public Company Accounting Oversight Board. (2005, February produce goods and services that are demanded by mem-
15). Bylaws and rules of the Public Company Accounting Over-
sight Board. Retrieved February 20, 2006, from http://www. bers of society, and once produced, these goods and serv-
ices must be distributed to the numerous societal groups.
pcaobus.org/Rules/Rules_of_the_Board/Bylaws.pdf
Decisions are made within the business structure about
who will produce, how much will be produced, how pro-
Jan Sweeney duction will be implemented, how the work will be organ-
ized, and how the finished good or service will be made
available to the consuming members of society. All these
decisions are necessary in the day-to-day operation of an
ETHICS IN ECONOMICS economic institution, and all these choices are made by
As might be suspected, early writings on ethics were cen- people. It could be argued that computer models are used
tered not on economics or business, but personal beliefs to make decisions, but it can be further counter-argued

264 ENCYCLOPEDIA OF BUSINESS AND FINANCE, SECOND EDITION