Financial Reporting and Ethics - The Institute of Chartered ...

FINANCIAL REPORTING AND ETHICSprinciple’, is an ethical theory that holds that an action is right ifit produces, or if it tends to produce, the greatest amount of goodfor the greatest number of people affected by the action.Otherwise the action is wrong.According to Bentham actions were right if they tended to producethe greatest happiness for the greatest number of people.(e)(f)The deontological theories determine the ethics of an act bylooking to the process of the decision (the means). Thedeontological tradition holds that what makes an action right isnot the sum of its consequences, but the fact that it conforms tothe moral law. This concept addresses the issue of obligation orduty. Under this basis, an action or decision is justified for thefact, in itself, that it is good.Kantianism (Ethics of Duty)The German philosopher, Immanuel Kant (1728-1804) is a majorcontributor to Ethics of duty. He thought that morality and thequestion of rightness and wrongness of actions was not dependenton a particular situation or on the consequences of the action.Rather, morality was simply a question of certain eternal, abstractand unchangeable principles that humans should apply to allethical problems. Hence his moral philosophy is deontological.To be moral, therefore, one must consciously act according torules previously calculated by ‘reason’ to be right or just, andthe incentive for observing those rules must be respected for dutyalone.Kant, consequently, articulated what could be seen as a guide towhat ought to be our commitment to duty by developing atheoretical framework through which these principles could bederived. This he called the ‘categorical imperative’. By this hemeant that this theoretical framework should be applied to everymoral issue regardless of who is involved, who profits and whois harmed by the principles once applied in specific situations.The ‘categorical Imperative’ consists mainly of three parts, butwe shall dwell on the first two formulations. The first formulationstates,Act only according to that maxim by which you can at thesame time will that it should become a universal law.De George explains this formulation to mean that, for any actionto be morally right, it must be capable of being consistentlyuniversalisable. By implication, if any action is moral for me, it124