Resolving Ethical Dilemmas

October 29, 20202020 Fall Joint Webinar

Session Learning Objectives

• Define the concept of ethical dilemmas and recognize resources available to help navigate ethical dilemmas

• Understand the revised AGA Code of Ethics and AGA’s ethics enforcement process

• Evaluate ethical dilemmas and propose action to take

Disclaimer

The views expressed by the speakers are our own views and are not necessarily the official views of the AGA Professional Ethics Board (PEB).

Ethical Dilemma• A “situation where two moral principles are in

Conflict.” [psychology dictionary.org]• A “choice between two options, both of which will

bring a negative result based on society and personal guidelines.” [yourdictionary.com]

• A “problem in the decision-making process between two possible options, neither of which is absolutely acceptable from an ethical perspective.” [corporatefinanceinstitute.com]

• A “[situation] real or imagined where a person must choose between courses of action, all of which are morally unacceptable.” [philosophyterms.com]

Ethical Dilemmas

• Sooner or later, every professional will face ethical dilemmas in carrying out their responsibilities.

• When confronted with an ethical dilemma, turn to the AGA Code of Ethics and the AGA Ethics Handbook for guidance.

• If the Code and the Handbook are not sufficient to guide you to the right course of action, reach out to the PEB for advice and guidance.

Code of Ethics

• Sets the minimum expected level of behavior and creates the expectation that AGA members and CGFMs will do the right thing in any given situation.

https://www.agacgfm.org/About/Code-of-Ethics.aspx

Code of Ethics

• The AGA’s NGB approved the updated Code of Ethics in February. The Code was updated to:• Reorganize into Principles and Rules to

make it easier to reference and more clearly and logically organize the Code.

• Incorporate additional rules underlying several principles based on PEB review of other professional organizations ethics codes.

• Better reflect the diversity of the accountability profession.

Ethics Handbook

• AGA Ethics Handbook (Updated 2018) provides AGA members information on what to do when facing an ethics issue or dilemma and what to do if you suspect a fellow AGA member or CGFM may have committed an ethical breach.

https://www.agacgfm.org/About/Code-of-Ethics/AGA-Ethics-Handbook.aspx

Ethics Handbook

• An article in the Summer 2019 Journal of Government Financial Management pages 52-54, summarizes the contents of the Handbook and provides an overview of what you need to know in a given situation.

https://www.agacgfm.org/Research-Publications/Journal-of-Government-Financial-Management/Archives.aspx

Ethics Handbook Update

• AGA Ethics Handbook (Updated 2018) is under update to:• Incorporate the updated Code of Ethics.• Incorporate the approved policy on

publishing sanctions.• Incorporate certain considerations that

the PEB believes should be captured in the Handbook.

Publishing Ethics Sanctions• The AGA’s NGB approved an updated policy on

publishing sanctions in December 2019. https://www.agacgfm.org/About/Code-of-Ethics/Publishing-of-Sanctions.aspx

• An article in the Spring 2020 Journal of Government Financial Management summarizes the policy and provides an overview of the basis for the policy.

https://www.agacgfm.org/Resources/Journal-of-Government-Financial-Management/Read-the-Latest-Issue.aspx

Publishing Ethics Sanctions• The policy provides that sanctions of Suspension

and Termination should be published, but that the name of the respondent will normally NOT be published.

• The name of the respondent may be published if the PEB decides that doing so would be important to protect the reputation of AGA or AGA members (and CGFM credential holders), protect the public, or protect organizations that employ AGA members (and CGFM credential holders).

• All publications are reviewed and approved by AGA legal counsel. Additionally, the AGA NGB reviews and approves publications that include respondent name.

Ethics Questions

• Individuals can submit ethics questions by:• Email to journal_ethics@agacgfm.org; or •Clicking on ‘submit an ethics question’ at

https://www.agacgfm.org/About/Code-of-Ethics.aspx

• Ethics questions may be submitted anonymously.

• Questions and related answers may be published in the Journal of Government Financial Management and/or other AGA publications.

Ethics Complaints• Individuals can submit an ethics complaint by:

•Mail to AGA, Attn: Professional Ethics Board, 2208 Mount Vernon Ave., Alexandria, VA 22301;• Email to ethics@agacgfm.org; or•Clicking on ‘file an ethics complaint’ at

https://www.agacgfm.org/About/Code-of-Ethics.aspx) and completing the form.

• Ethics complaints may be submitted anonymously, but anonymous complaints can impact the PEB’s ability to effectively investigate the complaint.

Are You Interested in Serving on the PEB?

• PEB terms are generally three years, and can be extended.

• PEB service requires a commitment:• Writing Ethics Counts articles.• Responding to ethics questions.• Investigating ethics complaints.• Updating the Code of Ethics.• Maintaining the Ethics Handbook.• Participating in PEB conference calls (usually quarterly).

• PEB service is rewarding and educational.• Contact Melinda or Dave if you’d like to serve.

ØA trolley is running out of control down a trackØIn its path are 5 people who have been tied to the

track by a mad philosopherØFortunately, you could flip a switch which will lead

the trolley down a different track to safetyØUnfortunately, there is a single person tied to that

track

ØShould you:a) Flip the switch?b) Do nothing?

Philippa Foot’s Trolley Problem

Philippa Foot, The Problem of Abortion and the Doctrine of the Double Effect in Virtues and Vices (Oxford: Basil Blackwell, 1978)(originally appeared in the Oxford Review, Number 5, 1967.)

ØA trolley is running out of control down a trackØIn its path are 5 people who have been tied to the

track by a mad philosopherØFortunately, you could flip a switch which will lead

the trolley down a different track to safetyØUnfortunately, there is a single person—your

mother—tied to that track

ØShould you:a) Flip the switch?b) Do nothing?

Philippa Foot’s Trolley Problem

Philippa Foot, The Problem of Abortion and the Doctrine of the Double Effect in Virtues and Vices (Oxford: Basil Blackwell, 1978)(originally appeared in the Oxford Review, Number 5, 1967.)

Let’s Exercise our Ethical Muscles

• Read each case study.• Ponder the correct—most ethical—course

of action.• Vote on the right (or best) action to take

in each case.• Then we’ll discuss the case and courses

of action.

Ethical Dilemmas

• #1 – The Case of the Unethical City Attorney • #2 – One Party Too Many • #3 – Budget Accuracy in Cowabunga County • #4 – Unhappiness in Happyville• #5 – New Age Soccer • #6 – DUE-Due-Diligence • #7 – PEAK Performance• #8 – SOX Compliance at Electronic Village

Corporation • #9 – How Green Is Your Reputation? • #10 – Office of Redundancy Office

The Case of the Unethical City Attorney

What should Amanda do?[ ] A. Amanda should move on without becoming a whistleblower;

particularly because AGA’s Code of Ethics specifically says that AGA members and CGFMs should not disclose “any confidential information acquired while performing professional services.” [ ] B. Amanda should report her concerns right away and openly to the

city council. As an AGA member and CGFM, she has an ethical obligation to “consider the long-term interest of the government and its citizens.”[ ] C. Amanda should report her concerns via the city’s hotline after she

gets another job. As an AGA member and CGFM, she has an ethical obligation to “consider the long-term interest of the government and its citizens.”[ ] D. Amanda should immediately report what she knows to the Placid City

Times Herald. As an AGA member and CGFM, she has an ethical obligation to “consider the long-term interest of the government and its citizens.”[ ] E. Other:

One Party Too Many What should Jane do?[ ] A. Jane should go ahead and make the contributions as expected. As a new employee, she wants to establish good working relationships with her supervisors, especially Judy, and does not want to interfere with a long-standing tradition at her new organization. After all, it is only $20.[ ] B. Jane should not make the contributions as expected. Although she wants to establish good working relationships with her supervisors, especially Judy, she does not think it is right to be expected to contribute towards these parties. [ ] C. Jane should suggest to Judy that they elevate the matter to Judy’s supervisor. Jane remembers reading something about restrictions on gifts between employees in the Standards of Ethical Conduct for Employees of the Executive Branch, and is concerned that by contributing to these parties, she and other FSC employees may be violating the Standards. [ ] D. Jane should report the matter to the DoDIG Hotline as she believes this to be a violation of the Standards of Ethical Conduct for Employees of the Executive Branch, mismanagement, and administrative misconduct that should be investigated.[ ] E. Other

Budget Accuracy in CowabungaCounty

What should Bob do?[ ] A. Bob should go ahead and book the entries as instructed.

He has fulfilled his professional responsibilities by bringing the matter to his boss’ attention.[ ] B. Bob should go ahead and book the entries as instructed.

He has fulfilled his professional responsibilities by bringing the matter to his boss’ attention. But, he should also write a memo to the file that explains his concerns.[ ] C. Bob should politely suggest to Sally that they should

elevate the matter to Sally’s boss, the county CFO, just to be on the safe side.[ ] D. Bob should call the county’s hotline and report the matter

so that the county inspector general is aware of the matter and can investigate.[ ] E. Other

Unhappiness in HappyvilleWhat should Louisa do?[ ] A. Louisa should do what her superior has suggested. She has an obligation to perform her job well, supervise others, and there is no reason to second-guess her superiors who are in better positions to see the big picture.[ ] B. Louisa should ask her bosses to reconsider whether they are doing the right thing, and try to convince them that the problems at SSH look serious and deserve further—and on-the-record—analysis.[ ] C. The importance of this matter is such that the public’s right to the transparency of this information outweighs any other considerations, so Louisa should insist that SSH be investigated further.[ ] D. If Louisa is unable to get her bosses to investigate SSH further, and on-the-record, she should resign and look for another job.[ ] E. Other

New Age SoccerSelect the most appropriate conclusion.[ ] A. There is no real problem here. Keeping informal track of scores did not formally violate any rules.[ ] B. This is a problem. By agreeing to participate in the league, these parent-coaches committed themselves to following the rules.

DUE-Due-DiligenceSelect the most appropriate conclusion.[ ] A. There is no problem here. Since the adjustments are below your numerically defined materiality level, you have no obligation to insist that the corrections be made to the financial statements.[ ] B. This is a problem. Although the adjustments are below your numerically defined materiality level, you have an obligation to insist that the corrections be made to the financial statements so that the user can be fully informed.

PEAK PerformanceSelect the most appropriate conclusion.[ ] A. Juno’s reasoning seems sound. There’s no need to require restatement of prior year financial statements.[ ] B. Juno’s reasoning is flawed. You need to inform PEAK that they need to restate the prior year financial statements.

SOX Compliance at Electronic Village Corporation

Select the most appropriate conclusion.[ ] A. There is no problem here. You and your firm have not done anything improper.[ ] B. This is a problem. You should not accept the engagement on these terms.

How Green Is Your Reputation?Select the most appropriate conclusion.[ ] A. There is not really a problem here. Pat is clearly the most qualified person GAO has to lead this evaluation and Pat’s reputation for scholarly and unbiased analysis has never been questioned.[ ] B. This is a problem. Although, Pat is clearly the most qualified person GAO has to lead this evaluation and Pat’s reputation for scholarly and unbiased analysis has never been questioned, if users of GAO’s report became aware of Pat’s spouse’s lobbying activities and the contributions to environmental activist groups it may not “look good.”

Office of Redundancy OfficeSelect the most appropriate conclusion.[ ] A. There is no problem here. Congressman Buster’s comment, taken in total, merely indicates his continuing support for ORO’s work.[ ] B. This is a problem. Congressman Buster may have been trying to get you to change your conclusions.

Melinda J. DeCorte, CPA, CFE, CGFM, PMP(703) 725-8559

melindadecorte@gmail.com

David L. Cotton, CPA, CFE, CGFM(703) 836-6701

dcotton@cottoncpa.com

Speaker Contact Information

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