Ethics Ethics – Rules that help tell the difference between right and wrong Values – Tell us what we think is important and helps us make decision about right and wrong Morals – Rules we use to decide what’s good and what’s bad (e.x., stealing) We tend to judge people more on their morals than their values

Code of Ethics Code of Ethics – Formal document that explains how employees should respond in different situations Famous Example – Johnson & Johnson with Tylenol recall In Canada, the law details acceptable business behavior, but companies can still behave unethically without actually breaking the law. This is why a Code of Ethics is needed!

How to Resolve Ethical Dilemmas Dilemma – Situation where there is a difficult choice between two or more options; have good points and bad points Ethical Dilemma – Moral problem with potential right or wrong answers; weighs values and morals Guide: 1.Who will be helped? 2.Who will be hurt? 3.What are the benefits; problems? 4.Will the decision stand the test of time? Requires honesty, ability to work co-operatively, respect for others, pride in work, integrity, loyalty

Whistle-Blowing Whistle-Blowing – Decision of an employee to inform officials or the public about an ethical violation Might report: False information Hiring procedures that were ignored Workplace safety codes ignored Not observing health codes

Accounting Scandals Accounting Scandal – Publicly exposed crime involving accountants or senior executives who alter accounting records Forensic Accountant – Investigates legal and financial documents for evidence of tampering Embezzlement – Accounting fraud; accountants invents phony accounts and redirects company money Assets – Items the business owns Liabilities – Items the business owes Auditors – Accountants who check the financial records of companies Insider Trading – Buying or selling shares in a company based on confidential information