CPE Session: Ethics Education Boot Camp An Alternative Course: Information, Ethics and Society James...
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Transcript of CPE Session: Ethics Education Boot Camp An Alternative Course: Information, Ethics and Society James...
CPE Session: Ethics Education Boot Camp
An Alternative Course:Information, Ethics and Society
James Gaa
University of Alberta
July, 2010
2Ethics Boot Camp -- Information, Ethics and Society
My Objectives
1. To describe briefly my ethics course as an alternative to a more conventional course in accounting ethics
2. To introduce some ideas developed in this course that apply to accounting ethics
Concepts – good definitions are critical
Theory
Issues
3Ethics Boot Camp -- Information, Ethics and Society
Structure of Presentation
1. Basic introduction to the course
Why have such a course?
General description of this course
2. Some basic ethical concepts that are central to information issues
Rights / duties
Privacy / secrecy
Lying / deception
3. Structure of the course (time permitting)
SEC Press ReleaseRe. Dell Computing
“Accuracy and completeness are the touchstones of public company disclosure under the federal securities laws.”
Robert Khuzami
Director, SEC Division of Enforcement
July 22, 2010
The Fundamental Issues:
Corporate governance
Disclosure versus Secrecy (information asymmetry)
Disclosure of accurate (representationally faithful) information
More generally: Rights and Duties of Management and Stakeholders
Ethics Boot Camp -- Information, Ethics and Society
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Why Information Ethics?
Accountants are supposed to be experts in information and the process of disclosing information to others
Information ethics gives freedom to look at broader issues, social context of information
What’s unique about accounting?
Auditor independence
Anything else?
5Ethics Boot Camp -- Information, Ethics
and Society
My CourseBasic Facts
Title: Information, Ethics and Society – first taught 2002
Place in the curriculum – an elective
One of a set of required electives for accounting, MIS, Decision Science majors
General elective for other business majors
Covers all main areas of business
1 ½ weeks is specifically about accounting
Earnings management
6Ethics Boot Camp -- Information, Ethics
and Society
My CourseBasic Facts
Lecture/discussion sessions
10 long case discussions
Mix of issues
By business area: marketing, MIS, HR, finance, accounting
Non-disciplinary: intellectual property
Micro (individual decision) / macro (policy issues)
International/domestic
Codes of conduct of various professions
7Ethics Boot Camp -- Information, Ethics
and Society
My CourseBasic Facts
Course is fully subscribed
Open to all business majors
But accounting majors have priority
So, who takes the course?
Primarily, accounting majors – very limited space for others
Students don’t mind that it is not accounting-centric
Could be an issue for some state boards of accountancy
8Ethics Boot Camp -- Information, Ethics
and Society
Relation to Traditional Accounting Topics
Included:
Confidentiality
Earnings management
Responsibilities regarding deception
Excluded:
Auditor independence
Billable and non-billed hours
Professional-organizational conflict (except in passing)
Budgeting
Transfer Pricing
9Ethics Boot Camp -- Information, Ethics
and Society
Basic Unifying Concepts
Rights and duties
Focus on Hohfeldian rights theory
Claim-rights (one kind of right) have correlative duties
Not: Kantian duty theory
Privacy
Unwanted attention
Control of information
Discussion of both in ethics and law
10Ethics Boot Camp -- Information, Ethics
and Society
Information, Ethics and Society 11
Structure of Rights(Hohfeld)
Active Rights Passive Rights
First-order rights Privileges Claims (claim-rights) Positive or negative In personam / in rem
Second-order rights Powers Immunities Negative
12Ethics Boot Camp -- Information, Ethics and Society
First-Order Rights:Claim-Rights
Claim-Right: An enforceable claim to the action or non-action of others
A claim against someone else
Who has a correlative duty to act or not to act
In personam: the duty is of a specific person
e.g., individual accountants to keep certain information of employer/client secret
In rem: the duty is general
e.g., professional assocations to create and enforce standards of ethical conduct
13Ethics Boot Camp -- Information, Ethics and Society
Molecular Rights
Most “real-world” rights are really bundles of atomic rights
I.e., complex combinations of
Privileges
Claims
Powers
Immunities
14Ethics Boot Camp -- Information, Ethics and Society
Fiduciary Duty
Fiduciary duties consist of:
Duty to act in the interest of the beneficiary
The beneficiary has a positive claim-right that the fiduciary act in the beneficiary’s interest
Duty to avoid acting in one’s self interest
The beneficiary has a negative claim-right that the fiduciary will not act in the fiduciary’s interest
15Ethics Boot Camp -- Information, Ethics and Society
Two Basic Domains of Privacy
1. Privacy as related to dignity, autonomy, relationships among people
Includes privacy as unwanted attention
A major concern of early work on privacyIn wake of technological advances:
Photography, sound recording, printingInformation issues often arise due to new
technologyStill a major issue
16Ethics Boot Camp -- Information, Ethics and Society
Two Basic Domains of Privacy
2. Privacy as restricted access or control
Especially control over informationcollection, retention, use, security, disposition
Important: Privacy is not restricted to informationPrivate property is private in just this sense
17Ethics Boot Camp -- Information, Ethics and Society
Confidentiality
A claim-right to keep information concealed (secret)
So, someone else has a duty to keep a secret
Duty to keep a secret – examples
Employees: duty of loyalty
Professionals: codes of conduct usually include a duty of confidentiality
Important: this duty is limited (except for accountants)
18Ethics Boot Camp -- Information, Ethics and Society
Privacy and Related Concepts
Privacy: Having control over something (including information)
Right of privacy: Right to control something (including information)
Anonymity: Given, written, etc., by or about a person whose name (or other identifying information) is withheld
Secrecy: Information blocked intentionally from others
Confidentiality: Concerns the right to maintain secrecy
Privilege: Legal right/duty to preserve confidentiality of information/ communication
19Ethics Boot Camp -- Information, Ethics and Society
Application to Accounting
The fundamental problem of financial reporting is:
The disclosure of private information to outside stakeholders
Private information:
Initially, controlled via secrecy
When disclosed, control is lost
Conflicting Rights:
The organization (to disclose or keep secret)
Stakeholders (to have information disclosed or kept secret)
20Ethics Boot Camp -- Information, Ethics and Society
Deception and Lying
Deception: The communication of messages (by the deceiver)to others (the deceived)with the intention of misleading them
To mislead: to cause other people to believe what the deceiver does not believeor to act in ways they would not have acted
Lie: an intentionally deceptive message which is stated
(i.e., written or oral)
Course Structure
I. Ethical concepts and principles
II. Privacy
III. Secrecy and confidentiality
IV. Intellectual property
V. Deception and lying
21Ethics Boot Camp -- Information, Ethics
and Society
I. Ethical concepts and principles:the “standard” ethical theories
Consequentialism
Duty-based theory
Rights theory
Virtue theory
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and Society
I. Ethical concepts and principles: Rights and Duties
Heavy emphasis on rights and duties
Why: most of information ethics is about rights of various kinds
Rights to privacy
Intellectual property rights
Right to confidentiality
Right not to be deceived
23Ethics Boot Camp -- Information, Ethics
and Society
II. Privacy
Primary issues:
Rights to privacy of personal information
Customer privacy
Employee privacy
Encompasses ethics and privacy laws – personal privacy
including the relationship between ethics and law
24Ethics Boot Camp -- Information, Ethics
and Society
III. Secrecy and Confidentiality
Issues:
Trade secrecy
One way of protecting intellectual property
I.e., controlling information
Competitive intelligence / espionage
Leaking and Whistle blowing
Legal Privilege
25Ethics Boot Camp -- Information, Ethics
and Society
IV. Intellectual Property
Focus: patents and copyrights
Includes law and ethics
Issues:
What should be patentable?
copyright law and creativity: alternative structures
Uncompensated copying of copyrighted material
26Ethics Boot Camp -- Information, Ethics
and Society
V. Deception and Lying
Issue areas:
Negotiation
Marketing
Business valuation
Earnings management and fraud in accounting
Assurance standards / codes of ethics
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and Society