Presentation on Ethics in Business

and Society

Prepared by L. Murphy
Smith
Professor of Accounting
Texas A&M University

For permission to use or

adapt this presentation,
please contact Dr.
 Ethics:
What’s the
Fuss?
When evaluating one’s
goals and objectives, a
vital question must be
asked: What is your
highest aspiration?
A. Wealth
B. Fame
C. Knowledge
D. Popularity
If integrity is second
to any of the
alternatives, then it
is subject to sacrifice
in situations where a
choice must be
made. Such
 Why talk about ethics?
Why talk about ethics? In the aftermath
of major corporate failures and
questionable accounting practices,
American Accounting Association
President G. Peter Wilson said that in
the classroom, educators need to
increasingly emphasize the value of
integrity, what has long been a
mainstay of accountants’ reputation
 In a recent Wall Street
Journal
article, Psychology professor
Steven Davis says that
cheating by high school
students has increased from
about 20 percent in the 1940’s
to 75 percent
today.
“Students say cheating in high
 If students lack ethics in high
school and college, then there
should be little surprise that
they lack ethics in their careers.
Greed and over-reaching
ambition often end in disastrous
personal consequences.
Convicted inside trader, Dennis
“I have painful
Levine, memories
in a Fortune of
magazine
Sarah learning
articletowrote:
walk in a
prison visiting room, and of
Adam pleading with a guard
who wouldn’t let him bring in
a Mickey Mouse coloring
Many institutions of higher education
have instituted policies regarding
ethics education. For example, the
Faculty Handbook of the Mays
Business School at Texas A&M
University includes the following
statement:
“Therefore, faculty and staff have a
responsibility for creating an academic
environment that promotes honest
academic inquiry and teaches students
ethical behavior in the process.”
 Educational
Institutions have
established ethics
codes for their
students, e.g. the
U.S. Air Force
Academy:
"We Will Not Lie, Steal Or Cheat,
Nor
Tolerate Among Us Anyone
Who Does"
-- Which do you think is the
What do profs think?
In a survey of college faculty, 187 professors
responded to several statements about
teaching ethics:
1. The importance of ethics and personal integrity
should be stressed in the courses I
teach. 4.75
2. The basis for ethics and personal integrity
should be discussed (e.g. benefit to
society as a whole, moral and
religious foundations of
society, etc.) 4.11
Note: Scores are based on a scale from
1: Strongly Disagree to 5: Strongly
Agree
American Institute of CPAs
Code of Professional
Conduct, Principles Article I:
In carrying out their
responsibilities as
professionals, members should
exercise sensitive professional
and moral judgments in all
their activities.
 Is there an ethics crisis
in America?
One recent national election
day poll indicated that 56
percent of voters thought
that America’s problems are
“primarily moral and social.”
Only 36 percent thought that
Can ethics
be taught?
Teddy
Roosevelt
said, “To
educate a
person in
mind and
not in
morals is
to educate
a menace
to
society.”
 In his best-seller, The
Closing of the American Mind,
Allan Bloom says that the
eternal conflict between good
and evil has been replaced
with “I’m okay, you’re okay.”
Students unthinkingly embrace
a blind tolerance in which they
consider it “moral” never to
think they are right because
More than 200 years ago, Professor
Alexander Tyler wrote of the
Athenian Republic, which had fallen
2,000 years earlier:
“A democracy cannot
exist as a permanent
form of government… The average
age of the world’s greatest
civilizations has been 200 years.
These nations have progressed
through this sequence: From
bondage to spiritual faith, to great
“In the quest for educational
reform, we would do well
to turn not
only to the great books,
but the great exemplars of
wisdom
with which our country
is blessed. To help reclaim
our destiny
as human beings and
citizens, we need to
rediscover the generation that really can
claim to be the best and the brightest in
American history, at least from the
 Whereas it is the
duty of all nations
to acknowledge
the providence of
Almighty God, to
obey His will, to
be grateful for His
benefits, and
humbly to implore
His protection and
favor.

George
Washington’s
 Of all the
dispositions and
habits which lead
to political
prosperity,
religion and
morality are
indispensable
supports…
Reason and
experience both
forbid us to
expect that
national morality
can prevail in the
Ethics is essential to the functioning of a free society: 2nd U.S.
President John Adams observed: “We have no government
armed with power capable of contending with human passions
unbridled by morality and religion. Our Constitution was
made only for a moral and religious people. It is wholly
inadequate to the government of any other.”
 “God who gave us life gave us
liberty. Can the liberties of a
nation be secure when we have
removed a conviction that these
liberties are the gift of God?”

“Indeed I tremble for my country when

I reflect that God is just, that His
justice cannot sleep forever.”
U.S. Declaration
of
Independence
The second paragraph
of America's founding
document states:
"We hold these truths
to be self‑evident, that
all men are created
equal, that they are
endowed by their
Creator with certain
unalienable rights,
Where Do We
Start?
Upon What Can
We Agree?
 Whether we
derive a code
of ethics
from
religious
beliefs, a
study of
history and
literature, or
personal
experience
and
 In an issue of Management
Accounting, James Brackner
stated: The universities are
responding with an increased
emphasis on ethical training for
decision making. For the most
part, however, they ignore the
teaching of values. For moral or
ethical education to have
Be sure you
are right,
then go
ahead.
Davy Crockett
1786-1836
A nation or a culture
cannot endure for
long
unless it is undergirded
by common
values such
as valor, public

spiritedness, respect for

others and for
the law; It cannot stand unless it is
populated by people who will act
on the motives superior to their
When the
situation needs
improvement,
Gandhi offers
guidance: “You
must be the
change you wish
to see in the
world.”
 Michael Josephson, in Chapter
1 of Ethical Issues in the
Practice of Accounting,
describes the “Ten Universal
Values: “Honesty, integrity,
promise keeping, fidelity,
fairness, caring, respect for
others, responsible citizenship,
pursuit of excellence, and
accountability.”
“Until about 50 years ago, it was
commonly accepted that
universities were to provide
students not only with knowledge
and skills, but also moral
guidance based on the essentials
of the Western tradition.”
Business Prof Geoffrey Lantos
If we want
to produce
people who
share the
values of a
democratic
culture,
they must
be taught
those
values and
not be left
to acquire
them by
chance.
Cal Thomas,
The Death of
 Can you
make a
difference?
“To sin by silence when they
should protest makes
cowards of men.”
Abraham Lincoln

Do you think this relates to

“To see what
is right and
not to do it
is want of
courage.”
(Confucius)
“Leadership is a
potent
combination of
strategy and
character. But if
you must be
without one, be
without
strategy.”
The reputation of a thousand
years may be determined by the
conduct of one hour.
Japanese
proverb
At a Congressional
Hearing on
Accounting and
Business Ethics,
distinguished
entrepreneur, Truett
Cathy, the Founder
of Chick-Fil-A,
quoted Solomon– "A
good name is more
desirable than great
riches; to be
esteemed is better
than silver or gold."
 
The truth is that
fame and fortune are
Preside
nt
Lincoln
said:
Honor
is
better
than