Discuss about the Business Ethics for Ethical Atmosphere.
Business ethics indicates to the certain codes of conduct or professional ethics that ensures an ethical atmosphere in the workplace and at the same time examines the problems in moral and ethical ground in a workplace (eon & Vuuren, 2010). Business ethics can be of several dimensions, normative or descriptive. However, being a set of moral codes the ethics are in general normative though differs in many countries. But to maintain the ethical outlook a company must follow the business ethics. It is as Adam Smith mentions, “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public or in some contrivance to raise prices” (smith, 1952). Business ethics increases a company’s acceptability to the mass. Therefore, there have been several boards and corporations, more like a national governing body that ensures the set of ethics are maintained. Nevertheless, the states being different much difference can be found in the business ethics of these countries. An example is APESB (Accounting Professional & Ethical Standards Board) which ensures a set of ethics (APES110) in the profession of accountants. The only problem with APES110 is that the codes are written in ‘western state’ therefore might not be accepted universally or precise in the non-western states like China, India, or Nepal due to cross cultural differences.
The following assessment in a detailed analysis and observation tends to find the reactions of the non western countries like China, India or Nepal to the codes and their differing tendency towards the acceptance or non acceptance of the code.
But at first a focus must be made on what APES110 is. APES110 is a set of business ethics in accounting set by the APESB (Accounting Professional & Ethical Standards Board) for the members of CPA Australia, Institute of Chartered Accountants or Institute of Public Accountants (Charteredaccountants.com.au 2016). The codes first were set and launched on 2006 and later in 2011 was revised. The codes are set into three different parts. While part A deals with the public interest and the threats to compliance with the principals, Part B deals with the application of the codes to the members in public practice and part C deals with the application of Part A to the members in business (apesb.org.au 2016). However, it is the cross cultural difference that acts as hindrances towards the universal applicability of the codes. May be the ethical argument remains the same but the language and technique of approach becomes different in several cultures. In this matter Hofstede’s theory of culture becomes significant. Hofstede identified four major dimension separating different cultures: individualism versus collectivism, large versus small power distance, strong versus weak uncertainly avoidance, and masculinity versus femininity (Minkov & Hofstede, 2012). The dimensions in the frame in themselves create a difference in the western and non-western states. For example, the acceptance of the code of ethics can be different in case of individual or a group, gender, quantity to mention a few. However, it was Grey who adopted the literary practice of Hofstede and identified four accounting value to define the culture of a company’s accounting; professionalism versus statutory control, uniformity versus conformity, conservatism versus optimism, and secrecy versus transparency (Grey 1988). For Grey the accountant’s ‘value system’ or ‘attitude’ are ‘related to and derived from societal values with special reference to work related will, in turn, impact on accounting systems; (Grey, 1988). This statement of grey provide enough reason to understand the reason why the nom-western countries, in this paper China, India and Nepal can possess differing opinion to the APES110 set in a western framework. The followings are the analysis.
Chinese accountants can possess a very different reaction towards the AGES 110 codes of accounting law. For the accounting standards of China originated in n asocial is period. Therefore unlike the APES110 where ethics concerns with the profit and loss (Section 290) (apesb.org.au, 2016), Chinese accountant therefore are accustomed to a set of rule where the state owns the industry and concerns more with the assets available to a company (Npc.gov.cn 2016). In contrast to the ethics of the business code dealing with the debts of a corporation Chinese accounting codes did not include concerns for debts (Global Times, 2016). However, the accounting law was widely held to be unsuitable to the world accounting ethics. In this the analysis of Grey’s first accounting ethics can be fruitfulness which deals with professionalism and statutory control. This presents the conflicting preference of professionalism and manual regulation (Grey, 1988). Western countries from the first have been focus in the professionalism to be the first criteria of business ethics. Where as in China the ethics regulated by and around the state there were hardly any scope for individualistic and uncertainty avoidance. Though professional judgment is something that is widely accepted in present business environment especially in AGES 110, the ethics as mentions about professional behaviour, “The principle of professional behaviour imposes an obligation on all Members to comply with relevant laws and regulations and avoid any action or omission that the Member knows or should know may discredit the profession. This includes actions or omissions that a reasonable and informed third party, weighing all the specific facts and circumstances available to the Member at that time, would be likely to conclude adversely affects the good reputation of the profession ” (section 150) (apesb.org.au, 2016) the Chinese accountants might possess a different reaction for the opinion since the work under an absolute different set of code.
Unlike China where the accounts law and ethics set to the IFRS (International Financial Reporting Standards) were much later, the laws of accounts and ethics of Indian accounting were set from the first corresponding to the IFRS (Pib.nic.in, 2016). Therefore, the ethics and laws are much similar to the western codes of ethics. Therefore Grey’s theory of conservatism and optimism becomes important in the context. It deals with the conservative perspective in accounting is based on the principles of law objectivity, verifiability. Conservatism also contains a strong uncertainty avoidance tendency to be more cautious and ‘cope with the unknown’ (Grey, 1988). According to the survey presented by Chanchani and Willett revels that the measurement of accounting values is in progress on a large scale in India and New Zealand. Moreover, In India the use of English language avoids the great scale of uncertainty as grey analyses in conservatism and optimism (Kuntz et al, 2013). Thus the codes of APES110 resemble much the Indian codes of ethics regarding the accounting laws and ethics. Therefore, the accountants in India may find similarity with the codes of ethics of APES110 (Patel, 2007). Not only in India but many countries in South Asia as well follow the ethical codes much similar to the APES110 codes of the Western states.
The governing body of Nepal Financial Reporting Standards (NFRS) was shaped as a ‘global language for business affairs’. Therefore the ethical codes on the fround of accounting possesses much similarity with the Western codes or to be precise the APES110 ethical codes. The codes of ethics in Nepalese accounting law follow the APES110 in terms of asset management, “A Member in Public Practice shall not assume custody of client monies or other assets unless permitted to do so by law and, if so, in compliance with any additional legal duties imposed on a Member in Public Practice holding such assets” (section 270) (apesb.org.au, 2016). Therefore, it can be said that Nepalese accountants may not possess differing opinion with the western codes of ethics. Apart from that many of the Nepalese accounting organizations follow the APES110 laws of ethical codes. The Institution of Chartered accountants of Nepal follows the APES110 set of ethical codes in accounting with the announcement that the compliance of the codes are compulsory for the members of the organization only and not those who are not members (Ican.org.np, 2016). However grey’s concept of uniformity and flexibility is important in this context though both the countries follow the uniform approach towards the business and ethical codes. According to Grey the uniform and consistent practice of accounting is important than accepting the varying practices in certain situations (Grey, 1988).
However, to conclude it may be said that not necessarily all the non-western countries would possess differing reactions towards the western code of ethics. Many of the non-western countries as has been discussed above follow the APES110 set of ethical codes. In this case what matters most is the standards on which the laws on accounting has been based on and made. Thus since China has been presently joined IFRS (International Financial Reporting Standards) it contains much difference in their accounting rule and ethical law with the western ethical codes or precisely the APES110 code. However, in India on the other hand the accounting laws have been developed from the beginning in the IFRS standards. Therefore India, though a non-western country possesses much similarity in their ethical codes with the APES110 codes of ethics. The Nepal Financial Reporting Standards (NFRS) attempted to reach a global approach therefore contain some similarity with the western code of ethics. Thus cross cultural problems tend to analyze and justify in terms of Grey’s accounting theory the ethical behaviour and reactions of the non-western countries towards the Western codes.
Reference:
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eon Rossouw, D., & Van Vuuren, L. (2010). Business ethics. Oxford University Press, 2010.
Grey, C. (1998). On being a professional in a “Big Six” firm. Accounting, Organizations and Society, 23(5), 569-587.
https://www.apesb.org.au/uploads/meeting/board_meeting/24112014043919_agenda-item-16-f-cpa-australia-s-overview-of-apes-110.pdf
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Kuntz, J. R. C., Kuntz, J. R., Elenkov, D., & Nabirukhina, A. (2013). Characterizing ethical cases: A cross-cultural investigation of individual differences, organisational climate, and leadership on ethical decision-making. Journal of Business Ethics, 113(2), 317-331.
Patel, C. (2007). A multidimensional measure in accounting ethics research.International Journal of Accounting, Auditing and Performance Evaluation,4(1), 90-110. laws. (2016). Npc.gov.cn. Retrieved 26 September 2016, from https://www.npc.gov.cn/englishnpc/Law/2007-12/13/content_1383953.htm
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Sharma, G. (2016). Practices of Financial and Management Accounting: Evidence fromSmall and Medium-Sized Enterprises of Nepal. Journal of Nepalese Business Studies, 9(1), 77-86.
Smith, A. (1776). 1952. An inquiry into the nature and causes of the wealth of nations. Chicago: University of Chicago Great Books.
Standards setting bodies and upcoming meetings. (2016). Charteredaccountants.com.au. Retrieved 26 September 2016, from https://www.charteredaccountants.com.au/Industry-Topics/Ethical-and-professional-standards/Standards-setting-bodies-and-upcoming-meetings.aspx
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