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

FINANCIAL REPORTING AND ETHICS12.2.1 Concept of ResponsibilityRights, obligations and responsibilities are closely related. We talk aboutthe idea of having a right to do something and the idea of having aright to receive something. Having a right to do something means thesame thing as not having any obligation to refrain from doing it. If oneis free to do it, one may do it, because there is nothing wrong in doing it.On the other hand, having a right to receive something is also called aright against someone else, who has an obligation to provide that whichthe first person is said to have a right to.Thus if Mazi Offia has a right to some amount of money that Mazi Obiowes him, it is a right to receive the money and at the same time a rightagainst Mazi Obi, which corresponds to his obligation to pay up. In thissense of right as a noun, it would mean an entitlement, a moral or legalclaim to something due to someone. Obligation in itself is a right thatrestricts one from denying another person his entitlement. It is theresponsibility that one has to give what one owes the other persons.(a)Direct Responsibilities(i)(ii)Internal Direct Responsibilities: These include theresponsibility for a company’s mission, culture andobjectives and for the aspects of the well-being ofemployees. These responsibilities would include: a safeworking environment, fair working practices, individualautonomy within the organisation, and assistance/compensation/ retraining if a company relocates or closesa plant. The management is responsible for these sort ofterms and conditions because it creates the workingenvironment and controls it.External Direct Responsibility: Organisations owethese responsibilities to their consumers (safe productsand information about the origin and composition ofproducts so that the consumers can make informedpurchases.) If products become contaminated in any way,the organisation has an obligation to communicate thisto their consumers.The external direct responsibility is also owned to localcommunities. They include safe processing, research to testthe effects on the environment and compensation for anyenvironmental damage in the locality.246