Ethics Review

Ethics Article Review

Ju Juan Holman-Woods

University of Phoenix

Financial Analysis for Managers I

FIN/324

Ron Cunitz

May 30, 2007

Ethics Article Review

Ethics plays an enormous part in the business world. Universities are educating students on how ethics affects businesses. WorldCom, Enron, and Tyco have demonstrated that educating upcoming business owners and employees on the importance of ethics is vital. In the last few years, many business scandals have put an enormous amount of pressure on the accounting specialists. In Teaching Ethics to Accounting Majors, Edward Monsour article explains why more universities are no longer ignoring teaching ethics in many accounting courses.

In the article, Monsour (2007) found in a survey conducted "by the American Accounting Association found that only 46% of schools offered a separate course in ethics" (Monsour, 2007). Yet many studies have shown that teaching ethics has had a positive outcome on undergraduates. The reason behind ethics education is to educate students on how to distinguish and determine ethical concerns. However, Monsour (2007) explains that the test for most accounting professors is to incorporate ethics teaching with professionalism in a way that students gain the ability to relate "moral reasoning and decisionmaking, and safeguards" that will avert dishonorable behavior. The article states that there are four goals of ethics in an accounting course. They are "expose students to their personal responsibilities and the need for integrity, provide a philosophical frame work for ethical analysis, review the ethical obligations of accountants as detailed in the profession's code of conduct, and discuss situations that present ethical conflicts and determine how to resolve them in a morally appropriate way" (Monsour, 2007).

Monsour (2007) also explains the there are three steps in functioning through an ethical predicament. The first step is to identify and empathize with all parties involved. Students need to envision those who could be affected by the assessment. The second step is for the students to foresee the effect of optional decisions on the owners and select a decision that will give a happy medium for all that may be affected. The final step is "justification-applying one of the generally accepted ethical concepts, such as universalism, utilitarianism, or social norms" (Monsour, 2007).

The reading assignment for Week One of Financial Analysis for Managers I and the article provide an explanation on how important ethics are in the business world. The reading material mentioned that rules are in place because of the 2000 scandals. Accountants, in the public eye, are required to control these mishaps and follow the code of conduct when there are traces of falsifications. The article explains how professors should teach its students how to identify, resolve, and elucidate ethical issues. In addition, students should know how ethics provides an opportunity to evaluate the effect of their actions and how good and bad decision-making can affect them in the business world and society.

Bank of America is a company that relies on ethics when lending money. Many underwriters require financial statements, brokerage statements, K-1's, and income statements when making a credit decision. The underwriters need to have confidence that the information that they receive are true and valid in order to lend money to its clients. When businesses provide little of no financial disclosures, the underwriter may approve at a higher interest rate or deny the loan. Bank of