Business and Professional Ethics,
9th Edition

CHAPTER 1 ETHICS EXPECTATIONS
The Ethics Environment for Business: The Battle for Credibility, Reputation & Competitive Advantage
New Expectations for Business
Responses & Developments
The Ethics Environment for Professional Accountants
Managing Ethics Risks & Opportunities
Questions
Reading Insights
References
Case Insights
ETHICS CASES involving (number of cases):
Improper Behavior (5)
Advertising & Sales promotion (4)
Financial Transactions (2)
Control of Information (2)
Concerning the Environment (3)
Product Safety (5)
Accounting & Auditing (2)

CHAPTER 2 ETHICS & GOVERNANCE SCANDALS
Ethics & Governance: A Timeline of Important Events
Ethics & Governance: The Early Developments Prior to 1970
Ethics & Governance: 1970–1990
Ethics & Governance: The Modern Era—1990 to the Present
Significant Ethics & Governance Scandals & Events
Signs of Ethical Collapse
Ethics & Governance: Trends
Ethics & Governance: Timetables of Important Events, 1929–2019
New sections:
Unethical Bank Cultures Produce Scandals
#MeToo Movement Reaches a Tipping Point
Harmful Products Draw Huge Settlements and Change Perspectives
Accounting Crises lead to Re-imagination of Professional Accountant’s Role
U.S. Business Roundtable Statement Signals Acceptance of Stakeholder Interests
Useful Video & Films
Questions
References
Case Insights
ETHICS CASES:
Enron, Arthur Andersen, Worldcom
LIBOR Manipulations, Deutsche Bank’s Cultural Disaster
Bernie Madoff Scandal
Wal-Mart Bribery, GM Ignition Faults, VW Cheats on Emissions Tests
General Motors installed faulty ignition switches
Takata air bags explode injuring passengers with metal shrapnel
Volkswagen software defeats environmental exhaust emissions testing
Valeant Pharmaceuticals and Turing Pharmaceuticals bought drugs and jumped prices


CHAPTER 3 ETHICAL BEHAVIOR—PHILOSOPHERS’ CONTRIBUTIONS 127
Ethics & Moral Codes
Ethics & Business
Self-Interest & Economics
Ethics, Business & The Law
Major Ethical Theories Useful in Resolving Ethical Dilemmas
Moral Imagination
Questions
Case Insights
Useful Video & Film
References
ETHICS CASES about improper behavior (7)
John DeLorean’s Overcommitment to His Company
Google’s Tax Minimization Strategy: Utilitarian Consequences
New York Times Dual Class Share Structure: Distributive Injustice?
Ben and Jerry’s Application of the Rawlsian Difference Principle
Merck and River Blindness: Justice as Fairness
Beach-Nut Nutrition Corporation and Blind Corporate Loyalty
Johnson & Johnson’s Worldwide Recall of Tylenol: Virtue Ethics


CHAPTER 4 PRACTICAL ETHICAL DECISION MAKING
Introduction
Motivating Developments for Ethical Learning
Ethical Decision Making Framework (EDM)—An Overview
Philosophical Approaches—An Overview: Consequentialism (Utilitarianism), Deontology, & Virtue Ethics
Sniff Tests & Common Heuristics—Preliminary Tests of Ethicality
Stakeholder Impact Analysis—Comprehensive Tool for Assessing Decisions & Actions
Stakeholder Impact Analysis: Modified Traditional Decision-Making Approaches
Integrating Philosophical & Stakeholder Impact Analysis Approaches
Other Ethics Decision-Making Issues
A Comprehensive Ethical Decision-Making Framework
Conclusion
Questions
References
Illustrative Applications & Case Insights
ILLUSTRATIVE APPLICATIONS (4)
ETHICS CASES About:
Harm to individuals (4)
Harm to the environment (1)
Governance decisions (3)

CHAPTER 5 CORPORATE ETHICAL GOVERNANCE & ACCOUNTABILITY
Modern Governance & Accountability Framework—To Shareholders & Other Stakeholders
New Expectations—New Framework to Restore Credibility
Corporate Governance Overview
Accountability to Shareholders or Stakeholders?
The Shareholder Value Myth
Governance for Broad Stakeholder Accountability
Guidance Mechanisms—Ethical Culture & Code of Conduct
Threats to Good Governance & Accountability
Misunderstanding Objectives & Fiduciary Duty
Failure to Identify & Manage Ethics Risks
Conflicts of Interest
Key Elements of Corporate Governance & Accountability
Compelling Evidence for the Development of an Ethical Corporate Culture
Developing, Implementing, & Managing an Ethical Corporate Culture
Corporate Codes of Conduct
Ethical Leadership
Corporate Psychopaths
Director & Officer Liability
Public Accountability Benchmarks
Conclusion—Toward a Culture of Integrity
Questions
Case Insights
Reading Insights
References
ETHICS CASES on:
Ethical Corporate Culture (4)
Ethical Leadership (3)
Bribery (4)
Corporate Governance & Managerial Opportunism (5)
Fraudulent & Questionable Financial Reporting (7)
Stock Market (7)
Product Safety (2)
APPENDIX A: Alternative Governance Theories
Sears Compensation Plan Backfires
Wells Fargo Suffers from an Unethical Culture
Johnson & Johnson Credo
Spying Scandal at Credit Suisse: Ethical Leadership?

CHAPTER 6 PROFESSIONAL ACCOUNTING IN THE PUBLIC INTEREST
Purpose of the Chapter
Professional Accounting’s Traditional Role
Historic Shortfalls in Meeting Professional Expectations
Professional Accounting and the Public Interest
Implications for Services Offered
Judgment & Values
Sources of Ethical Guidance
Professional Codes of Conduct
Conceptual Framework for Assessing Threats to Compliance
Conflicts of Interest:
Threats to Independence
Assessment using the Conceptual Framework Approach
A Stakeholder Impact Analysis
Affecting Services Offered
Involving Improper Use of Influence
Involving Use or Misuse of Information (Confidentiality)
Questionable Tax Services & Practices
Laws & Jurisprudence
Moral Courage Is Vital to Professional Accounting: Globalization Heightens the Requirement
When Codes & Laws Don’t Help
Broadening Role for Professional Accountants
Conclusion
Questions
Reading Insights
Case Insights
References
ETHICS CASES:
Famous events and scandals (5)
Professional & Fiduciary Duty (13)
Accounting & Auditing Dilemmas (11)
Fundamental Accounting & Auditing Issues Cases (3)
Tax & Regulatory Cases (7)
Transfer Pricing by Apple
The Business Reality Test for Transfer Pricing
Tax Inversions: Deal or No Deal

CHAPTER 7
MANAGING ETHICS RISKS & OPPORTUNITIES
Ethics Risks & Opportunities:
Identification & Assessment
Management & Mitigation
Stakeholder Accountability
Key Ethics Risk Issues & Tools;
Workplace Ethics
New Section: Freedom from Sexual Harassment (#MeToo Movement)
Whistleblower Programs & Ethics Inquiry Services
Fraud & White Collar Crime
New Section on Forensic Accounting
Bribery & International Operations
New Section on Money Laundering
Crisis Management
Conclusion
Questions
Case Insights
Reading Insights
References
ETHICS CASES about:
CSR Cases—Environmental Issues (3)
Workplace Ethics Cases
Discrimination & Abuse (6)
Spying (2)
White Collar Crime (3)
Bribery & International Operations Cases (10)
Risk & Crisis Management Cases (7)
APPENDIX A: Ethics Audit Program Annual Audit Questions
Bribery by Lockheed Corporation Spawns the U.S. FCPA
Niko Resources – Canada’s First Significant Bribery Prosecution
Daimlerchrysler Subject to Bribery U.S. Laws

CHAPTER 8 SUBPRIME LENDING FIASCO—ETHICS ISSUES
The Economic Train Wreck—A Global Disaster
Stages of the Subprime Lending Fiasco
How Did the Subprime Lending Crisis Happen?
Ethics Issues—The Subprime Lending Fiasco
Ethics Lessons
Questions
Case Insights
Useful Videos & Films
References
ETHICS CASES about:
Questionable ethical values (1)
Conflicts of interest (4)
Accounting manipulation (2)
Morale courage (1)
A Subprime Mortgage-Backed Security Gone Awry
Investment Bankers in the Movies
How Much Were the Investment Bankers Paid during the Crisis?

• Leonard J. Brooks

  Leonard J. Brooks is Professor of Business Ethics & Accounting at the Rotman School of Management of the University of Toronto. He is the Director of the Professional Accounting Centre, and the Master of Forensic Accounting Program (formerly the Diploma in Investigative & Forensic Accounting Program) at the University’s Institute for Management & Innovation. Professor Brooks served 14 years on the Editorial Board of the Journal of Business Ethics and as Founding Editor of Corporate Ethics Monitor, a pioneering bimonthly publication. He has published articles on ethics issues in the Journal of Business Ethics, Accounting Organizations and Society, Canadian Accounting Perspectives, and Business & Society. He coauthored BUSINESS & PROFESSIONAL ETHICS FOR DIRECTORS, EXECUTIVES & ACCOUNTANTS, 8E with Paul Dunn; ETHICS & GOVERNANCE: DEVELOPING AND MAINTAINING AN ETHICAL CORPORATE CULTURE, 4E with David Selley; and PRINCIPLES OF STAKEHOLDER MANAGEMENT: THE CLARKSON PRINCIPLES with Lee Preston and Thomas Donaldson. Prior to joining the University of Toronto, he obtained his CA designation (in 1970) and subsequently became an audit manager and Director of Manpower for Touche Ross & Co. (now Deloitte.) in Toronto. Professor Brooks served as a member, then chair, of the Chartered Accountants’ national Board of Examiners and chair of its national Syllabus Committee. He was named a Fellow of the Institute of Chartered Accountants (FCA) of Ontario in 1982. These professional designations were converted to CPA and FCPA in 2012. He consults with individuals, corporations, governmental and non-governmental organizations and serves as an expert witness and media-commentator. Professor Brooks is also a former director of the Canadian Centre for Ethics & Corporate Policy and a former president of the Canadian Academic Accounting Association.

• Paul Dunn

  Paul Dunn is a Professor of Business Ethics at the Goodman School of Business, Brock University. Dr. Dunn has a doctorate in accounting from Boston University as well as two degrees in philosophy from the University of Toronto. He is a CPA who worked in downtown Toronto with Ernst & Young (as a chartered accountant), the Canadian Imperial Bank of Commerce (in the finance division), as well as in the private sector (in controllership). Professor Dunn’s research focuses on ethics, corporate governance, and corporate social responsibility. His theory papers and the empirical results of his research have appeared in a variety of scholarly journals, including the Journal of Business Ethics, Journal of Management, Business & Society, and Business Ethics Quarterly. The media in both Canada and internationally interview Paul Dunn regularly.

• LEARNING OBJECTIVES DIRECT STUDENTS' ATTENTION TO KEY INFORMATION. These helpful Learning Objectives appear at the beginning of each chapter to set expectations and guide readers' attention to the most critical information.

• UPDATES HIGHLIGHT THE LATEST DEVELOPMENTS IN GOVERNANCE. This edition examines the 2019 Business Roundtable Statement by 181 leading U.S. CEOs, which established that corporations have social as well as economic responsibilities. Updates also address unethical bank cultures and scandals, such as money laundering, and this impact on Deutsche Bank and Danske Bank.

• NEW MATERIAL EMPHASIZES TODAY'S DECISION MAKING AND UNETHICAL BEHAVIOR. Students examine price gouging by Valeant, Pfizer, Mallinckrodt and Catalyst Pharmaceuticals. Coverage explores harmful products lawsuits for J&J’s Talc and Bayer’s Roundup. This edition also addresses today's OxyContin crisis, anti-bribery developments as recent as 2019 and SEC whistleblower statistics. In addition, updates share the latest on crisis management and how Panama Papers and Paradise Papers exposed secret tax evaders.

• NEW CONTENT HIGHLIGHTS TODAY'S WORKPLACE ETHICS. Readers examine how the #MeToo Movement reached a tipping point in 2017-19 as it brought recognition to women subjected to sexual violence by high profile names, such as Harvey Weinstein, Bill Cosby and Roger Ailes.

• UPDATES ADDRESS THE LATEST ETHICAL DEVELOPMENTS IN PROFESSIONAL ACCOUNTING. Students review how the accounting crises redefined the professional accountant’s role today. New coverage reviews NOCLAR Rules -- the new international (IFAC) ethics standards for professional accountants -- and how requirements to inform on employers or clients who are not in compliance with the law or regulations will change confidentiality in this profession. Students also study the COSO Enterprise Risk Management (ERM) Revision of 2017 as well as forensic accounting, its role, scope and educational requirements.

• NEW CASES ADD TO THIS EDITION'S MORE THAN 130 TOTAL INTRIGUING CASES. Students examine issues, such as corporate espionage, whistleblowing, pricing issues, bankruptcy and money laundering, in real companies, including Valeant Pharmaceuticals, Barclays Bank, Carillion, KPMG and PCAOB, Credit Suisse, Deutsche Bank, Danske Bank and the Canadian Airline Industry.

• NEW VIGNETTES BRING THE LATEST EXAMPLES TO LIFE. Students learn from contemporary challenges professionals face today as they examine actual challenging business situations, such as QuadrigaCX cryptocurrency exchange failure.

• THIS IS THE ONLY BOOK ON THE MARKET THAT COVERS BOTH BUSINESS ETHICS AND PROFESSIONAL ACCOUNTING ETHICS IN PRACTICAL TERMS. Because business ethics and accounting ethics are interdependent, students gain the understanding of both that is necessary to fully appreciate trends in ethical expectations, changes in regulation and why audits are based on the ethical culture of the audited company.

• THIS EDITION'S VERSATILE PRESENTATION MAKES IT A TRUSTED RESOURCE FOR YOUR COURSE. This edition's breadth and depth make it a successful choice for your stand-alone course or as a support for more than one course in your curriculum. Instructors like you have trusted this book for undergrads, Master of Accounting students, M.B.A. students and Executive M.B.A. students. Some instructors have selected sections of this book and specific cases to custom-publish for specialized courses or executive programs.

• CONTENT EMPHASIZES RELEVANT, PRACTICAL DISCUSSION AS WELL AS THEORETICAL MATERIAL. Some other books feature philosophical discussions but lack sufficient practical discussion, cases or applications that emphasize relevance, which can cause students to disregard content and not engage in the course. By contrast, this unique edition highlights the practical development and impact of all topics, with the support of more than 130 cases, primarily drawn from actual business events.

• CASES EMPHASIZE BOTH CONTEMPORARY ETHICS AND AN UNDERSTANDING OF PROFESSIONAL ACCOUNTING CODES OF CONDUCT. This edition enhances the value of its cases by extending discussion beyond what other books offer. Many other books feature cases but do not sufficiently discuss ethics or the latest professional accounting codes of conduct that are being harmonized globally. Rather than focusing exclusively on specific rules, this unique edition emphasizes an understanding of the underlying principles as well as the relevant rules.

• WEALTH OF TIME-SAVING INSTRUCTOR RESOURCES ASSIST IN CLASS PRESENTATION AND PREPARATION. A helpful Instructor’s Manual and proven PowerPoint® slides are available for your convenience. Additional online resources include course outlines, suggested Executive M.B.A. and M.P.A. course outlines, cases and online links that are highlighted in this edition's printed text. The authors also provide teaching insights, based on their professional and instructional experiences.

• MORE THAN 130 CASES, KEY READINGS AND ILLUSTRATIVE APPLICATIONS GIVE STUDENTS HANDS-ON EXPERIENCE WITH REAL-WORLD ISSUES. Many cases cover pertinent, practical, contemporary problems, such as aggressive tax schemes, governance dilemmas and bribery. Other cases address classic issues, such as subprime lending, BP oil spill, GM faulty ignition switches, VW cheating on emission tests, Valeant drug price gouging, Toshiba's accounting scandal and Enron.

• ENGAGING RECOMMENDED VIDEOS AND FILMS INTEGRATE THE LESSONS’ PRINCIPLES WITH ETHICAL EXPECTATIONS. Designed for student viewing, these interesting videos further students’ understanding of ethics expectations in business and accounting today. Accompanying lists and helpful commentaries further clarify the ethical content in these videos and films.

• EXPANDED COVERAGE HIGHLIGHTS THE LATEST ETHICAL THINKING. Students examine new perspectives on corporate governance and responsibilities, corporate social responsibility, "B" corporations, ethics risks and workplace ethics, including the #MeToo movement. This edition analyzes subprime lending and other fiascos, bribery, whistleblowers and inquiry services. Students also learn to improve their own practical decision-making approaches.

• THIS EDITION HIGHLIGHTS ISSUES FOR PROFESSIONAL ACCOUNTANTS. The book extensively covers the global harmonization of ethics codes and practices occurring around the world under the International Federation of Accountants (IFAC). The book analyzes major changes in the newly revised AICPA and CPAO ethics codes as well as new requirements for ethical risk assessment, judgment impairment and decision making. Students examine the latest ethical pitfalls for professional accountants and the impact of future code requirements (the NOCLAR Standards) on professional accountant confidentiality.

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