Ethics Case

Question

1. What is an ethical dilemma? How can a person solve an ethical dilemma?

2. Which consulting or non-audit services are prohibited for the auditors of public companies? Why do you think such restrictions are in place?

3. What's the difference between business failure and audit risk? Why should auditors be concerned about business failure?

4. What is meant by contributory negligence? Under what conditions might this be a successful defense?

1) Ethical Dilemma

It is also known as moral dilemma, which involves mental conflict. It is a situation where there is a conflict between the moral apprehension and ethical obligation, and it results in a dilemma which is morally intolerable. In an ethical dilemma, a person cannot determine which course of action is right or wrong. It's a situation where the person is stuck between the two alternative courses, choosing any one will not provide him mental satisfaction.

Ethical dilemmas are also the result of choice a person makes while selecting a course of action to achieve the best result. It happens mainly because the facts which influence the decision and results of future outcome are not known.

Ethical Dilemma can be solved by following the following steps:

1 Finding out your motive and detaching yourself from the decision. For solving an ethical dilemma one has to take out his own feelings from the decision and should focus on the results to the involved parties.

2 One should consider his own moral code of conduct while solving an ethical dilemma. One should be conscious enough to make a difference between right or wrong.

3 Before taking any decision, one should think about the consequences