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Business Ethics

Business Ethics. AGA/Richmond Chapter 14 February 2007 Ruth W. Epps, Ph.D., CPA Virginia Commonwealth University. I am ethical because…. Loyal Truthful Respectful. Honest Dependable Have integrity. I am…. Government Scandals Make Headlines. Halliburton's Corruption

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Business Ethics

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  1. Business Ethics AGA/Richmond Chapter 14 February 2007 Ruth W. Epps, Ph.D., CPA Virginia Commonwealth University

  2. I am ethical because…

  3. Loyal Truthful Respectful Honest Dependable Have integrity I am… RWEpps Virginia Commonwealth Univeristy

  4. Government Scandals Make Headlines Halliburton's Corruption Fannie Mae Accounting Scandal The Real Costs of War These events have heightened everyone's awareness of ethical business practices.

  5. Why Business Ethics? • AICPA Professional Code of Conduct • IIA Code of Ethics: Rules of Conduct (Professional) • Core Values (Self) RWEpps Virginia Commonwealth Univeristy

  6. Ethics and Business Conduct Codes • Code should include: • Definition of and procedures for handling, conflicts of interest; • Prohibition against use of corporate information, property or opportunity for personal gain; • Confidential information; • Compliance with laws; • Reporting of illegal or unethical behavior RWEpps Virginia Commonwealth Univeristy

  7. The State Employee Fraud, Waste, and Abuse Hotline 1-800-723-1615 NO - YOUR NUMBER DOES NOT SHOW UP ON A CALLER ID!! Comptroller's Memorandum to Heads of State Agenciesand Institutions of Higher Education RWEpps Virginia Commonwealth Univeristy

  8. Types of Fraud To Report • Illegal or Fraudulent Conduct • Waste of Funds • Abuse of State Property or Resources • Gross Mismanagement • Gross Neglect of Duty RWEpps Virginia Commonwealth Univeristy

  9. IIA Code of EthicsPrinciples Integrity Objectivity Confidentiality Competency RWEpps Virginia Commonwealth Univeristy

  10. IIA Code of Ethics—Rules of Conduct • Integrity;  Internal auditors: • Performance of work  • Observance of the law • Shall not knowingly be a party to any illegal activity, • Shall respect and contribute to the legitimate and ethical objectives of the organization.   RWEpps Virginia Commonwealth Univeristy

  11. 2. Objectivity;  Internal Auditors: • .1 Conflict with the interests • .2 Accept anything that may impair or be presumed to impair their professional judgment.  • .3 Shall disclose all material facts RWEpps Virginia Commonwealth Univeristy

  12. 3. Confidentiality; Internal auditors: • Shall be prudent in the use and protection of information • 2.Shall not use information for any personal gain or in any manner that would be contrary to the law. RWEpps Virginia Commonwealth Univeristy

  13. 4 Competency; Internal auditors • Shall engage only in those services for which they have the necessary knowledge, skills, and experience.  2. Shall continually improve their proficiency and the effectiveness and quality of their services.  RWEpps Virginia Commonwealth Univeristy

  14. A key point to remember about business ethics • State Agencies do not make ethical decisions • True or False???????? • True • Individuals make the ethical choices! RWEpps Virginia Commonwealth Univeristy

  15. Question: When it comes to business ethics, which activities, functions, decisions and/or behaviors are really important? RWEpps Virginia Commonwealth Univeristy

  16. Answer: All of them! BEWARE, Everything you do defines if you are ethical. RWEpps Virginia Commonwealth Univeristy

  17. When is it okay to be unethical? • NEVER! • What are the parts of your job - and your human interactions - to which fairness, honesty, respect, and "doing right" don't apply? • THERE ARE NONE! RWEpps Virginia Commonwealth Univeristy

  18. Ethics Assessment RWEpps Virginia Commonwealth Univeristy

  19. Six basic guidelines for ethical business operations • Laws • Rules & Procedures • Values • Conscience • Promises • Heroes RWEpps Virginia Commonwealth Univeristy

  20. Laws • Is the action you are considering legal? • Do you know the laws governing the activity? RWEpps Virginia Commonwealth Univeristy

  21. RULES & PROCEDURES • How does your planned action compare to what is stated in the company's policies and procedures? RWEpps Virginia Commonwealth Univeristy

  22. VALUES • Values in operation - ask yourself: "Does the action I'm considering follow not only the letter of the law, but also the 'spirit' of the law? RWEpps Virginia Commonwealth Univeristy

  23. CONSCIENCE • Will your actions make you feel guilty? • Can you truly justify your actions to yourself? RWEpps Virginia Commonwealth Univeristy

  24. PROMISES • Will your action live up to the commitment that you made to the other person (customer, client, supplier, employee, employer) in the business relationship? • Will your action build more trust? RWEpps Virginia Commonwealth Univeristy

  25. HEROES • Is your action what your hero would do in the same situation? • How would your hero act? RWEpps Virginia Commonwealth Univeristy

  26. These six guidelines will help you take action that is ethical • Laws • Rules & Procedures • Values • Conscience • Promises • Heroes RWEpps Virginia Commonwealth Univeristy

  27. "3R's" to point you and your employees in the right ethical direction. RWEpps Virginia Commonwealth Univeristy

  28. The first "R" of business ethics is RESPECT • Treating everyone (customers, co-workers, vendors, etc.) with dignity and courtesy • Using state supplies, equipment, time, and money appropriately, efficiently, and for business use only • Protecting and improving your work environment, and abiding by laws, rules and regulations RWEpps Virginia Commonwealth Univeristy

  29. The second "R" of business ethics is RESPONSIBILITY • Providing timely, high-quality goods and services. • Working collaboratively and carrying your share of the load. • Meeting all performance expectations and adding value. RWEpps Virginia Commonwealth Univeristy

  30. The third "R" of business ethics is RESULTS • You are expected to get results legally and morally, by being ethical. • Do the “ends” justify the “means”? • If you lose sight of the distinction, you jeopardize your job and your career. RWEpps Virginia Commonwealth Univeristy

  31. Take a stand!How To Say 'NO' With Tact RWEpps Virginia Commonwealth Univeristy

  32. First • Don't accuse the other person of being unethical. • Instead, use "I" statements to describe your feelings RWEpps Virginia Commonwealth Univeristy

  33. State Your Objection And Concern Without Indictment. • I have serious concerns about that, and I need your understanding ... • I honestly believe it is wrong because ... • I can't do what I feel is wrong ... RWEpps Virginia Commonwealth Univeristy

  34. Propose An Alternative Action That You Feel Is Ethical I think I know what you want to accomplish, and I feel there's a better way to do it. How about ... RWEpps Virginia Commonwealth Univeristy

  35. Handling Ethical Situations • Arrogant Employees/ Colleagues Your colleague ignores procedures and precedents and tries to gain power on his/her own or through a clique. RWEpps Virginia Commonwealth Univeristy

  36. Common rationalizations for not doing what's right: • "Everyone else does it." • "They'll never miss it." • “Nobody will care." • “The boss does it." • “No one will know." • "I don't have time to do it right." • "That's close enough or good enough." • "Some rules were meant to be broken." • "It's not my job." RWEpps Virginia Commonwealth Univeristy

  37. Ethics Motto RWEpps Virginia Commonwealth Univeristy

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