05 Accounting & business ethics English for economics: Geoff Cockayne 2011
What is accounting? • The maintenance and auditing of business records and the preparation of financial reports. (WordNet) • management accounting • internal: ledgers, budgets, forecasts • financial accounting • internal + external: P&L, balance sheet, cash flow
Ledger example audit- trail
Profit & loss account • revenue & expenditure over a period • trading • overheads • profit
Balance sheet • financial situation at a specific time • assets = • liabilities + • owners’ equity • balance
Business ethics • business purpose is profit • businesses must obey the law • corporate social responsibility
Theories of ethics • deontology • rules and duty • consequentialism • consequences/utility • virtue • moral character
References Blackburn, S. (2003) Ethics: A Very Short Introduction. Oxford: OUP. Blackburn, S (2002) Being Good: A Short Introduction. Oxford: OUP.
Homework • You are an accountant with a large company. Your boss asks you to hide some bad debts so that they do not appear on the accounts. He tells you that if you do not do this the company may go bankrupt. • Consider what you will do in terms of the ethical principles of deontology, consequentialism and virtue.