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


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

4

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


and Society


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


and Society


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


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


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


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


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


Molecular Rights

Most “real-world” rights are really bundles of atomic rights

I.e., complex combinations of

Privileges

Claims

Powers

Immunities


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


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


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


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)


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


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)


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


and Society

I. Ethical concepts and principles:the “standard” ethical theories

Consequentialism

Duty-based theory

Rights theory

Virtue theory


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


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


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


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


and Society

V. Deception and Lying

Issue areas:

Negotiation

Marketing

Business valuation

Earnings management and fraud in accounting

Assurance standards / codes of ethics


and Society

cpe session: ethics education boot camp an alternative course: information, ethics and society james...

Documents

information ethics

ethics course

ethics education boot

stakeholders ethics

society slide

faithful information

printing information

course basic facts course