Ethics in Accounting: A Decision-Making Approach

Chapter 3The Core Philosophies

AM I ETHICAL?

For many years, Apple Inc.'s famed CEO, Steve Jobs, struggled with an undisclosed illness. At various times, Apple informed the media that Jobs's illness was “a hormone imbalance,” “simple and straightforward,” and “a common bug.”¹ In fact, Jobs had pancreatic cancer. When Jobs disclosed in January 2009 that his illness was “more complex” than he originally had anticipated, investors reacted swiftly, causing Apple's stock price to fall by over 5%. Three years later, the world mourned. Steve Jobs had died at age 56.

Did Apple act ethically?

1. No, because the company owed a duty of full disclosure to all company stakeholders, including its employees
2. No, because the company violated a core ethical principle
3. Yes, because a person's medical condition is a sensitive personal matter
4. Yes, because SEC guidelines justifiably protected Jobs's right of privacy

The SOLUTION is revealed at the end of the chapter.

LEARNING OBJECTIVES

After reading this chapter, you should be able to:

1. Describe and critique the two core philosophies of consequentialism and deontology.
2. Formulate your own views on whether lying, stealing, and discriminatory behavior are always wrong.
3. Understand the roles of emotions and rational analysis in ethical decision making.

Some fashion designers create elegant haute couture for the runways of Milan and Paris, but sacrifice practicality. Others create clothing for the mass market, weighing the cost of every stitch ...