Accounting Ethics. Imagine That

By Metzger, Lawrence M. | The Journal of Government Financial Management, Spring 2004 | Go to article overview

Accounting Ethics. Imagine That

Metzger, Lawrence M., The Journal of Government Financial Management

The accounting profession has come under intense attack and scrutiny with respect to its involvement with multiple financial reporting scandals. It seems to be widely accepted today that managers, far from presenting a true and fair view of their corporate operations and financial positions, ignore proper accounting procedures to maximize their own self-interest. And in some cases both internal and public accountants have been all too willing to give management or their clients what they want.

Primarily, the spotlight has focused on private sector corporations and the public accounting profession, specifically through the passing and enactment of the Sarbanes-Oxley Act. But governments and government accounting professionals are hardly immune to unethical behavior. Many of the same pressures that drove corporate officers and accountants to commit fraud also exist in the government sector. Government officials, especially elected officials, do not want to be embarrassed by unfavorable financial results and what would appear to be a lack of efficient and effective use of taxpayer dollars.

Although a formal code of ethics exists for government accountants, codes by themselves do not usually have the depth and detail needed to solve all but the most straightforward situations. Most ethical decisions have extended and uncertain consequences, 'multiple alternatives and personal implications. Ethical thinking requires significant intellectual capacities and specific skills. This article introduces government accounting professionals to the ethical concept of moral imagination. It shows how the active use of imagination and creative thinking can help lead to the right ethical decision.

Moral Imagination

The concept of moral imagination goes as far back as Adam Smith. In his book, The Theory of Moral Sentiments, he links imagination and sympathy. He states: "Moral imagination is the ability to empathize, to understand another point of view, and be creative in ethical decision-making." Other definitions exist. Archie Carroll frames moral imagination within a business perspective when he says that moral imagination is: "The ability to perceive that a web of competing economic relationships is at the same time a web of moral or ethical relationships." In her book Moral Imagination and Management Decision-Making Patricia Werhane states "Developing moral imagination involves heightened awareness of contextual moral dilemmas and their mental models that create new possibilities, and the capability to reframe the dilemma and create new solutions in ways that are novel, economically viable and morally justifiable."

Decision-Making Theory: Action Selection

We often speak as though a decision-maker has some set of potential plans of action (options) and that decision-making consists of choosing the best among them. However, consider your own decision-making-you frequently have no idea what might be a reasonable action plan. Often, you start off in one direction only to change your mind when things go awry. In fact, decisions seldom are made at a single point. More likely the process seems to feel its way along, changing in the light of feedback and often leading in directions never imagined when it all began.

The "feeling along" nature of decision-making, especially ethical decision-making, is very difficult to describe in a practical, straightforward theory. Rather, accounting professionals must be able to think creatively and imaginatively to resolve ethical dilemmas. This type of high-level thinking requires the accounting professional to retrieve knowledge from various aspects of his/her life to address the issues in question.

Creative thinking is not usually associated with the day-to-day activity of accountants, but we all have the ability to think creatively. The following structure will be used as an example (just one many possibilities) of calling on all we know to think through a problem. …

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