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Ethics is receiving wide-ranging discussion in today's popular press as well as in accounting literature. Many accountants find themselves perplexed by these arguments because they have not been exposed to a practical method of dealing with ethical dilemmas. No formal training and few opportunities in everyday working life have been provided for accountants on a sustained basis. Most accountants are very practical. They therefore resist ethical discussions that they perceive to be either moralizing in tone or abstract and philosophical in content.

Our purpose is not to present a philosophical treatise on ethics. Such discussions are widely available elsewhere. Neither do we intend to lecture the reader upon what moral values she should hold. We presume that our readers are people who already possess or aspire to high moral standards. Otherwise why would the topic of accounting ethics be of interest to them?

We shall present a useful, clear systems approach to ethics in accountancy. Accountants already know that the best way to evaluate the integrity of the financial information being communicated, both within the organization and to parties outside of it, is to understand and evaluate the accounting system used to convey this information. A parallel may be found in the realm of ethics. To understand an ethical dilemma and to analyze the potential resolution of a specific problem, one should seek to evaluate the strength of the particular ethical system in use. . .

Balance is a concept close to the heart of every accountant. One of the first things we learn is to balance assets against liabilities and owners' equities. Utilitarianism can be best understood as a system of ethical balance. Here the desire is to find the balance of good consequences as opposed to bad consequences.

The second major system of ethics found in modern society is deontologism. The term stems from the Greek word deon, which means duty. In contrast with the utilitarian ethical system, deontologism holds that right action is independent of consequences. Deontological theories focus instead upon the correctness of the action itself. The assumption is that there are duties, rules, and principles that are inherently valuable and should never be violated. We respect the law, for example, because it is correct to do so, not because it smooths the way in which the courts or the police operate. Deontological theory is anti-utilitarian: it states that an action is morally correct if it is rooted in a true moral principle. A moral person has a duty to take the right action regardless of consequences. . .

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