1. Article Overview
Ford has done an analysis which showed that a new design which it had access to, would help in decreasing the death numbers by 180, despite of which the implementation of the design was not initiated by the company (Palazzo, Krings and Hoffrage, 2012). The possibility of the explosion of Ford Pinto would have been decreased by such design. On being accused, Ford defended itself saying that it used the recognized risk/benefit analysis for determining what was greater, the financial costs of implementing the change or the societal benefits. The new design would have costed $11 per car. On the basis of the number used by Ford, the cost was estimated to be $137 million against the price tag of $49.5 million that was put on the car damages, injuries and deaths, hence, for Ford it was justified not to implement the design change (Palazzo, Krings and Hoffrage, 2012). The product liability development helped in the creation of the risk/benefit analysis. In such an analysis, if the cost is exceeded by the expected harm for taking the precaution, then the precaution must be taken by the company, whereas the company will not need to take the precaution if the cost is liable (Lampe and Engleman-Lampe, 2012).
Negative aspect of the article is that I disagree that it was legally chosen by Ford not to make any changes in the design which would have assisted in making the Pinto safer, since such choice of Ford, despite being legal, might not necessarily be considered as ethical. No price can be put on as life of a human, hence, Ford’s choice of paying for the deaths rather than recalling the vehicles was very unethical (Palazzo, Krings and Hoffrage, 2012).
Positive aspect of the article is that I agree that a theory that is strictly economic should not be used because, it is clearly unethical for a company to allow people to die or let them get seriously injured as it can cost a lot for the prevention of the same and, all the other consequences, for instance, the negative publicity and criticism received by Ford and the settlements and the judgements that resulted from the lawsuits were not taken into consideration.
By evaluating this article, I was able to learn that somethings such as the life of a human, can never be measured in terms of money. However, I also evaluated that on the contrary, there are some arguments that are in favor of the risk/benefit analysis. Firstly, the analysis was well developed through the existing case law. Secondly, companies are encouraged for taking precautions against the creation of risks which incur huge costs of accident liable (Lampe and Engleman-Lampe, 2012). Next, there has to be some measure for everything. And finally, a bright line is provided by the risk/benefit analysis that can be followed by companies.
2. Article Overview
The financial statements and reports of a company are very important to the internal as well as the external shareholders of that company (Deegan, 2013). These statements act like a report card of the firm. Hence, it is very important to regulate these statements in order to ensure that they are not falsely prepared and are misleading by any means. For such regulation, a framework is provided by the Accounting Standards which are recognised as basic policy documents (Deegan, 2013). A regulatory board or an accounting body, or even the Government at times, directly issues these accounting standards and regulations. They are mainly responsible for dealing with the four major aspects of accounting, which namely are; Recognizing financial events, measuring financial transactions, presenting the financial statements in a significant manner, and disclosure requirement of firms for ensuring that the shareholders are not misinformed (Albrecht, 2007).
Positive aspect of the article is that I agree with the statement that the primary objective of such standards and regulations are to ensure proper and adequate reliability, transparency, comparability and consistency of the financial records and statements. These regulations do so by standardizing the policies and principles of accounting of an economy or a country. Hence, the transactions of all the firms would be recorded in the same way if the standards of accounting are followed.
By evaluating this article, I have learnt that Accounting is often considered as the business language as it helps in communicating the financial position and related information of a company to others. Just like every language, there are certain grammar rules, which is also in the case of accounting, where the rules are the accounting standards and regulations. These regulations have certain objectives. Some of which are; harmonizing the various policies of accounting, putting an end to the financial statements’ non-comparability, increasing the trustworthiness of the financial statements, providing transparent standards and guidelines for the users, defining comparable standards that can help in comparing the accounting statements at any point of time, providing standards for various principles and policies of accounting, providing a proper point of start for accounting, facilitating ease for the comparison of both intra-firm as well as inter-firm, eliminating the large variations in the accounting standards’ treatment, generating financial reports having information of high quality, etc (Marley and Pedersen, 2009). I also evaluated that the accounting regulations also help in providing a certain set of policies of accounting which are vital for the disclosure needs and the methods of valuation of the different financial transactions (Marley and Pedersen, 2009).
4. Article Overview
The role of accounting profession is vital in the society. The public consists of people such as the creditors, customers, the Government, employees and employers, the community of business, investors, shareholders, and other people who are dependent on the integrity and objectivity of accountants for the proper maintenance of the economic operations (Hopwood, Unerman and Fries, 2010). The economic welfare of the businesses, community and the country where the accountants work, are influenced by the attitudes and behaviours of these accountants. In the present circumstances, it can be said that the financial crisis is a sign of a huge failure of struggle between private and public interests, to the loss of the latter, in the hunt of attaining fast and risky profits. In such a line of work, every member of the profession of accounting is required to operate in a way that adequate contribution is made towards the increment of his confidence in the profession as well as towards the fulfilment of the professional responsibilities (Bean & Bernardi, 2007). There has been an increase in the interests in the accounting ethics.
Negative aspect of the article is that I disagree that a good professional accountant is the one who only does the reporting. This is because a professional accountant, besides reporting, is also able to influence the management decisions of the firm or business.
Positive aspect of the article is that I agree the significant implementation of the ethical codes of an accountant and his profession is a significant need in the profession of accounting, in order to move ahead of the simplistic wrong or right legislation type. In order to fulfil the obligations and responsibilities which the accountants have towards the society, they would require certain advanced tools (Bean & Bernardi, 2007).
By evaluating this article, I have learnt in the recent years, certain factors have contributed towards the creation of an environment where excessive involvement from the regulatory bodies was seen to be important for assuring the protection of the public interest. These factors included the collapse of businesses where the professional independence framework was taken into consideration and a series of political pressures that had arisen due to globalisation and global fiscal markets (Hopwood, Unerman and Fries, 2010). I have also evaluated that aaccountants and auditors should always comply with the specified standards of accounting that are adopted in every jurisdiction, and should be familiar with the International Ethics Standards Board for Accountants (IESBA) Code of Ethics for Professional Accountants (IESBA Code), along with the Code of Professional Conduct of the national accounting profession organisations (Carter and Warren, 2018).
5. Article Overview
A specific set of values which positively impact the way in which businesses and firms operate daily, both inside the company as well as outside, that is in the community, are together known as sustainability (Crane and Matten, 2016). In the past few decades, there have been certain changes in the business sustainability. The mission had started with the opinion of creating long-term financial profits and values, which now has grown and changed to have included the internal changes like making the environment of the workplace friendlier to the employees so as to keep them happy and satisfied with their work. The indicators of performance have expanded to the development of community, larger collaboration with environmental competitors, groups and suppliers, and creating long-term changes in the society (Crane and Matten, 2016).
Positive aspect of the article is that I agree that, sustainable business means creation of wealth and money. The businesses which value the sustainable business tenets have the capability of swaying the decisions of investors of today. There is always a possibility of a shift towards comprehensive transparency which is inevitable. Hence, businesses should always be aware of and prepared for such possibilities.
Negative aspect of the article is that I disagree that, a logical place to start from is having a goal of making the business completely sustainable, because it sounds very ambiguous and unclear. If a road map is not implemented by a business, the goals and objectives of such a business can never be accomplished. A company can be moved towards sustainability more efficiently and quicker by having a specific set of objectives. Depending on the type of industry, the goals and objectives might vary.
By evaluating this article, I have learnt some of the ways of making a business sustainable, like assigning tasks to every individual and allocating the resources. A sustainability cheerleader is one of the primary needs of every company. In theory, a single person can start and advocate for the sustainable business practices of a firm. A staff member of the Corporate Social Responsibility (CSR) or the sustainability team lead will be the person who would be responsible for taking the objectives and communicating the same with the rest of the community and staff members (Rozuel and Kakabadse, 2011). I evaluated that in order to increase the sustainability of a company, adequate money and time is required (Bansal and DesJardine, 2014). It is very important for companies to ensure that the right people are contacted by the sustainability team, which should be followed by ensuring that these people have the capability and time for stepping aside for their everyday work and take part in the firm’s goal towards sustainability.
6. Article Overview
Hofstede has identified the four dimensions of culture in the national cultures of research, which are very well known and widely used (Hofstede, 2011). These dimensions are, uncertainty avoidance, power distance, masculinity/femininity and individualism/collectivism (Hofstede, 2010). In order to consider the influences of cultural factors on accounting, a framework is needed which is provided by the above-mentioned dimensions. As per the quote by Catlett (1960), “Accounting has been created and developed to accomplish various desired objectives and, therefore, it is not based on fundamental laws or absolute precepts”, such prospects provides us with the idea of the concept of accounting. Trompenaars identified seven dimensions of cultural differences in another study of culture, where the dimensions found out by him were, individualism-collectivism, universalism-particularism, neutral-emotional, achievement-aspiration, diffuse-specific, attitudes to the environment and attitudes to time (Hampden-Turner and Trompenaars, 2011). Accounting harmonization has become very difficult due to the growing impact of culture and cultural differences. Under the guidance of the International Accounting Standards Committee (IASC), the International Accounting Standards Board (IASB) was set up in order to create some harmonization between the cultural differences of nations (Zeff, 2012).
Positive aspect of the article is that I agree that one cannot underestimate the influence of culture on the social institutions such as accounting. The domain of archaeology and anthropology have shown the presence of culture, which was before the increase in the cross-border businesses and immigrations (Hodder, 2012). I analyzed that according to the field of research, there are several definitions of culture, which differ greatly from each other. There are many properties of culture which are accepted widely by people. These cultures are learned, shared, they are symbolic, can shape the behaviors of different individuals and might change over time as well.
By evaluating this article, I have learnt that in the field of accounting and related research, the influence of culture in the accountancy environments has become a subject and has been examined and studied by many researchers and scholars. I arbitrated that the environment where an accounting institution operates, shapes the accounting itself. Even in the field of reporting practice, in every nation, the reporting practice is impacted by culture even though accounting standards exist (Heidhues and Patel, 2011). The practices of financial disclosures towards value orientations are impacted by the cultural environment which is an independent variable (Jaggi & Low, 2000). I was able to determine that some of the factors of culture, due to which accounting is impacted are, religion, language, values, morale, law, attitudes, politics, education, technology and social organization. The above-mentioned factors cannot be questioned about shaping the accounting value, hence influence the environment of accounting globally. A good instance to this is, in the culture of Islam, borrowing is not encouraged which is opposite to the western culture which is totally dependent on borrowing (Kayed and Hassan, 2011).
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