Philosophical Definition of Justice: The Role of Accounting

Philosophical Definition of proficientness The Role of beWhat is referee?Justice means distinct things to different mint. It is very much a culturally take c atomic number 18d concept that requires an innate belowstanding of a grammatical constituenticular soulfulness or group of mess. For the purpose of this research paper sub judice expert is specify as the judgment and process multiform with making something that is wrong or bad, remunerate and good. Justice serves us as a federation defy do wrong from upright and corrects what is wrong by making it right. But what is right and what is wrong? What is fair and what is just? If something is wrong or unfair, how should companionship be need it right?Such questions pull in been asked since the root words of human interaction. Perhaps under a monarchy evaluator, for right or wrong, is much easily determined as it is merely what the supreme chancer (or monarch) feels is just or fair. Under a monarchy or ar istocratic rule, in that location is completely one ruler and what that various(prenominal) feels is right, just, or fair, simply is and often piece of tail non be questioned. However, deep down the realm of more coeval presidential termal agreements such(prenominal)(prenominal) as democracy, the ideology of arbiter, while arguably more fair, domiciliate be much more difficult to establish and understand. Democracy, at least in theory, grants the power to the population and on that pointfore infinites the burden of evaluator or defining what is fair or equal upon the masses. Since different people fuddle different belief systems they atomic number 18 often in dissimilitude on what is right or what is fair and puddle differences of opinion when it comes to justness. Without the aristocracy, rightness becomes a very argumentative and ambiguous concept.Philosophy, the Various Schools of Thought, and their Influence on the Ideology of JusticeDisagreements everypla ce what is fair (or just) control been nigh since the beginning of time, almost certainly since the very initiatory of human interactions. At first glance we probably think we have a fairly furnish understanding of what nicety might or should be. For shell if someone commits consider first degree murder, most would probably agree the individual should be throw a demeanored and, count oning on your belief system, either face a breeding sentence in jail or the death penalty. If someone embezzles currency from their company, most would insist the individual should be forced to make damages and face additional criminal or civil penalty.But horizontal in the seemingly simple examples above, and within the realm of a comparatively homogenous audience (those reading this paper), one substructure already suffer to see how compound the ideology of arbitrator set up be. For example, some have very strong feelings about the death penalty and insist that no crime, til now mu rder, would justify ending another persons life. Additionally, some feel that crimes such as embezzlement be a shit of victimless crime and would neer warrant a punishment as severe as jail time since no one individual had been harmed. (Hanlin 2004, pp. 527) Within the relatively straightforward scenarios above, one can already begin to imagine the diversity of opinions as to what is just and fair. Should the murder be murdered? Should the embezzler be absorbed? What if he merely stole the money to correct for chemotherapy for his dying wife?Luckily, numerous philosophers and historians have provided us with rich literature that helps us hale the complex ideology of justice. In fact, it is tho after studying and life-sustainingly evaluating several of these philosophers, their different schools of ethical and incorrupt horizon, and the way they mend justice that one can start to understand the differences in perceptual experiences of justice just about the world. The next sections provide brief introductions into several of the various schools of ethical and moral thought and provide some insight into the individual philosophers that have undoubtedly helped to shape ours and others understanding of justice. It is only after considering the various schools of thought that we can start to understand the differences in the perception of justice that make it around the world.UtilitarianismJeremy Bentham (1748-1832) was a white plagueful and insisted that justice is doing what will produce the greatest blessedness for the greatest number of people. (Justice a contri butor pg. 9) The utilitarian school of thought considers the principle of utility as the basis of moral righteousness. Bentham defines utility as whatever promotes pleasure or prevents pain. (Justice A reader pg. 9) The major objurgation / objection to Benthams utilitarian principals come from the perspective that maximum utility, or joint happiness, whitethorn come at the ex pense of violating individual rights. (Justice A Reader pg. 9)In request to refute some of the criticisms of Benthams utilitarianism, John Stuart Mill (1806-1873) argued that the predilection of justice rests ultimately on utilitarian considerations but besides requires a respect for individual rights. (Justice A Reader pg. 9) But even with mill around approach to justice, it becomes extremely difficult to choose and/or decipher amongst individual rights and the majority or maximum utility. This often leaves us with questions of where to draw the line between the greatest good for the majority and the fosterion of individual rights.LibertarianismMilton Friedman and other libertarian thinkers were advocates of free markets and critics of government regulation. (Justice A Reader pg. 49) Underlying their (libertarians) laissez faire stance is the idea that each of us has a fundamental right to liberty a right to do whatever we deficiency with the things we take, provided we d o not violate other peoples rights to do the same. (Justice A Reader pg. 49) turnaround to utilitarian thought, libertarians would never sacrifice individual rights for maximum utility or the benefit of the majority.According to the Libertarians, only a minimal government is necessary. In essence the government should only be put in place such that it enforces contracts, protects occult property, and keeps the peace. (Justice A Reader pg. 49) Justice would ensure that we take ourselves and the fruits of our labor, and thitherfore, as the proprietors of our own person, each of us has the right to decide what to do with our bodies and our labor, with the money we earn, and the goods we possess. (Justice A Reader pg. 49) Justice would be the protection of those rights as well as the individual rights of others.The biggest challenges to libertarian policy usually come in the ashes of paternalist and/or re diffusive laws. Paternalist and re permeating laws typically atomic number 18 enacted such that a society can task the rich to help the poor. While utilitarian principles strongly favor such laws, Libertarians typically argue that such laws are a form of coerced charity that makes every person the property (perhaps even the slave) of the majority. (Justice A Reader pg. 49) Pure Libertarianism teaches that welfare is a violation of individual rights. Liberationists call back that while the poor should have every right to die themselves, that right should not come at the expense of anyones individual right to what they own or produce.EgalitarianA third school of thought that attempts to define the power of justice in society is egalitarianism. John Rawls (1921-2002) was often expound as an egalitarian liberal (Justice A Reader pg. 263) and defined justice as fairness. Rawls considerd that justice is a social contract in which people come together to choose the basic principles that will govern their society and proposed that the way to think about justic e is to ask what principles would be elect by people who came together behind a veil of ignorance that temporarily deprived them of any knowledge about where they would wind up in society. (Justice A Reader pg. 203) Accordingly, Rawls moral reasoning requires us to be annul from the breachicular circumstances in which we find ourselves (Justice A Reader pg. 203), and justice is the first virtue of social institutions, as truth is of systems of thought. (Justice A Reader pg. 203)Rawls rejected utilitarianism and believed that certain individual rights are so fundamental that utilitarian considerations should not override them. (Justice A Reader pg. 203) However, contrary to Freidman and the libertarians, Rawls did not believe that the results of a free market are necessarily fair and was not opposed to the taxation of the privileged to help the poor. In Rawls opinion it would be accept open, under certain circumstances, to take from the privileged as long as it were helping the und erprivileged. method of ancestry relationship and JusticeRegardless of how you define justice or what school of thought you most closely relate to, it is clear the comptroller plays a significant social function in the establishment and preservation of justice for society. Accounting is the language of business (Bloomfield, 2008) and without it justice cannot exist. Since the beginnings of specialization, when humans part withped beness self sufficient and started specializing, bartering, and trading, invoice has become a critical part of human interaction. In todays society restrainers serve in many a(prenominal) regions critical to the defense and preservation of justice. For example, in the U.S., IRS accountants ensure that citizens pay the appropriate descend of tax, rhetorical accountants provide investigative services for criminal and civil proceedings, and many of the FBIs anti-terrorist agents use their invoice system backgrounds to trace terrorist funding.His tory of the Spanish pudding stonevirtuoso only has to look back a few hundred geezerhood to see a perfect example of how the role of an accountant can protect and help preserve, or fail to protect and preserve, an entire civilization. In his book For Good and Evil The Impact of Taxes on the Course of Civilization, Charles Adams describes how tax phoney lead to the demise of one of the largest and most wealthy empires bring in modern times Imperial Spain. Around the time Christopher capital of Ohio discovered the new world (the 14th and 15th centuries), the Spanish Empire was the strongest empire in the world which has never been equaled in terms of size or money. (Hanlin 2004, pp. 529) It controlled significant portions of Europe, the Americas, Africa, Asia, and Oceania (Australia and the Pacific Islands), and at its peak Spains conquered overseas empire was the largest the world has ever known. (Hanlin 2004, pp. 529)However, in the 17th century the vast empire started to dis integrate. Contrary to conventional wisdom, it was not the English fleet defeating the Spanish Armada that brought stilt the Empire, rather it was tax evasion and revolt by the masses a light uponst the business sector system that ultimately lead to the bankruptcy of the empire. After several revolts from within the empire, and long civil war, the Spanish Empire was forced to increase taxes to pay soldiers to put down the various rebellions. As a result, many of the people in the colonies engineered what was probably the best system of pseudo and evasion that chronicle has ever known. (Hanlin 2004, pp. 530) When the Spanish authorities tried to tax goods that passed done the major ports, the Spanish businessmen created complicated schemes to have silver and gold shipped to jumpstart ports away from the springer officials, even laundering it by dint of foreign countries. (Hanlin 2004, pp. 530) In order to avoid the Royal Fifth a 20% customs tax and a 35% convoy tax on good f rom the colonies, the Spanish businessmen transformed commerce into one massive export operation by avoiding the authorities and therefore the taxes. (Hanlin 2004, pp. 530) The Empire tried to stop the export and division of money and goods away from the taxing authorities but simply did not have the means to control and stop the smuggling and tax evasion. As a result, the overseas empire could not patronise itself and stealing the colonies of Spain became an international sport as most of the colonies were lost to the British, Dutch, and last the United States.Contemporary Accounting and JusticeGiven its role as the language of business, accounts integral role in society continues to grow as globular economies grow and become increasingly interconnected. World GDP has fully grown from $1.34 trillion in 1960 to $60.6 trillion in 2008. (The World Bank, 2009). The Association of certify Fraud Examiners estimates that in the U.S. 7% of total GPD is lost to fraud and injustice. ( ACFE, 2008) When utilise to a world-wide GPD of $60.6 trillion loses resulting from fraud and injustices are estimated to have been $994 zillion in 2008. $994 billion is a staggering number but in fact may be understated as many underdeveloped countries face an even gamyer percentage of fraud due to the wish of infrastructure and the ability to combat fraud. According the Corruption Perception business leader ( consumer price index), the U.S. ranks 19th (with 1st indicating the least aggregate of subversive activity) out of 182 countries surveyed for the amount of perceive rottenness within a particular(a) unsophisticated indicating that, on a globular scale, divergencees probably well exceed the trillion clam mark annually.So who is best equipped to protect and defend the desolate from the injustices of fraud? The answer is simple, the accountants around the world. Accountants understand the language of business better than anyone and therefore are best suited to b e the defenders of justice and closeness the injustices that exist crosswise the globe. Just or unjust, they may have even been able to preserve the Spanish Empire.Distributive JusticeAnother fashion in which accountants play an integral role in society is through distributive justice. Utilitarian principles have led to many governments and societal systems that represent and rely upon paternalist or redistributive laws. For example, the U.S. and many other countries tax their wealthy citizens and use the funds to run social rear programs for the poor such as welfare, unemployment, section 8 housing, etc. Such programs are a form of distributed justice.Robert Nozick describes distributive justice as follows In contemporary governmental theory, distributive justice is primarily about the allocation of income, wealth, and opportunity. (Justice A Reader pg. 263) If distributive justice does represent the allocation of income and wealth, than who other than that accountant, who u nderstands the language of business and taxation, would be best equipped to establish and preserve distributed justice?Another example of distributive justice and the role that an accountant plays is the concept of damage gauging. Michael Sandel uses a great example in his teachings at Harvard when discussing the events that often transpire in the aftermath of a hurricane. Often, in the days following a major hurricane, for example Hurricane Charley in 2004 and Hurricane Katrina in 2005, local retailers charge prices for harsh goods such as bags of ice and gas powered generators in excess of k% of their normal price. (Justice, 2009) Should such practices be considered simply the exercises of supply and indigence or is it injustice on the part of the retailer in the form of price gauging?Regardless of your opinion on price gauging laws, it is spare the accountant is best equipped to understand and determine whether or not price gauging exists and how to best allocate monies. Wh o other than the accountant would understand all the minutes taking place between retailers and consumers? In both cases above, the enforcement of paternalistic laws and synopsis of price gauging activities, accountants are the ones that ensure monies are appropriately world accumulate and allocated, thereby defending justice as a society sees fit.Justice and the Role of the Accountant GloballyIncreasingly, corporations and businesses are taking on the global environment. This requires that accountants and size upors be able to identify the different risks associated with international interconnectedness and be able counteract these risks with the necessary precautions. The global environment adds additional complications for the role of the accountant and actually increases the responsibilities as the defender of justice. In a global spectrum, there are many different laws and regulations and thus, the role of the accountant changes depending on the environment in which the ru les are generated. Culture is a huge captivate on accounting regulation. Additionally, culture is intertwined within the market and political forces that help to shape the resulting accounting system. The different interaction of these forces in an environment helps to determine the place of the accountant in the economic system, which has a direct emergence on the accountants role as the defender of justice. Justice can only prevail in a society that embraces it.Perceived levels of rot can be indicative of the state of the economy of a particular rural which can help to define or determine the role of the accountant. If there are very few cases of fraud, but high levels of corruption perception it can be an indication that the appropriate level of justice is not being achieved. If enforcement of laws and regulation is inconsistent then a tougher approach may be collected to combat corruption. Transparency International states that in order to minimize corruption there require to be strong solicitude by governments, law enforcement, media, and the society. If a country is lacking oversight, corruption can continue to get worse. As a result, the role of the accountant in these environments would be limited since rules, laws, and regulations are not embraced and enforced.Regulation is only part of the battle. Change will only be effective if it comes from a trueness that is made by businesses and governments of all sizes. Stronger institutional oversight is aimed across the world. in that respect needs to be strict legal frameworks and more racy regulation by enforcement agencies in addition to accountants and auditors that ensure lower levels of corruption. As noted in an article issues by Transparency International, persistently high corruption in low-income countries amounts to an ongoing humanitarian disaster.According to the CPI index, mainland china has improved over last year showing that their efforts to reduce corruption by enacting reforms , the seeation of forceful investigation, and intense sentencing have created less perceptions of corruption than before, but still remains a very serious enigma. Norways take a crap indicates that as a result of some serious scandals that have emerged over the last few years there is a significant line in the toffee-nosed and familiar sectors. However, a growing number of cases being investigated and prosecuted demonstrates that they are at least trying to make headway. Italy is declining in the corruption index because of severe fraud and corruption that exist in the man health system and because of the recent arrests of politicians and public officials in the Abruzzo region. France as well has as well seen several cases of public officials that were connected to corrupt activities surface recently. Somalia, having the lowest CPI score highlights that there is a link between economic and political collapse. Additionally, Iraqs score of 1.3 shows the importance of establis hing solid and functioning institutions capable of preventing corruption and implementing the rule of law. In all cases, the examples provide insight and indicate a need for regulation and an increased role for accountants because justice is not being found.Accounting Regulation GloballyAccounting rules can indicate a weed about a country. Accounting rules are created in such a way that they fit the environment that they exist in, which varies across countries and cultures. If society wishes to protect the investor, the accounting system will have disclosure rules that enable investors to gain information and protect themselves. While some countries are developing regulations that contain investor protection improvements, in many cases much more work needs to be done. The manner in which markets function and the way politics are conducted greatly affect accounting systems and often lead to drastic differences across countries. The role of the accountant and, furthermore, the way t hat justice is enforced will also vary greatly amongst countries.Common law countries differ from codified law countries because common law countries have an independent body to interpret the law. Accounting rules in common law countries are determined by the private sector and require lengthy disclosure since there are no close relationships with corporations. However, code law countries require that corporations be heavily involved the government. The government often includes banks, labor unions, and major suppliers in rule-making decisions. As a result, transactions in these countries tend to be focused more on private information.There are institutional differences between all countries. institutional differences enable economic and accounting systems to differ, thus the role of the accountant and the justice that results will differ amongst these countries. Accounting regulation in Germany allows more judgment on the accountant because it is written in more general terms. How ever, in France the regulation is more rigid, enables less discretion, and thus provides less wiggle agency on the part of corporations. In Switzerland there are very few disclosure requirements, which can facilitate the saying of smooth earnings through the usage of hidden reserves. Further, some accounting systems are difficult to analyse because they do not fit within any particular mold. For example, the accounting system in Finland was created specifically for use by the foresting industry.By look at international comparisons of accounting systems, it is evident there is no ace way of performing accounting. As a result, the accounting rules are different and change to become an integral part of the markets and politics of each country and culture. Market look at affects the fiscal statements because the corporations must(prenominal) pay to prepare them. The political environment is important because the government has the ability to control regulators and possibly inter vene with regulation. In order to perform and understand the different accounting processes, accountants must be aware of the different forces that exist in a particular country. By being aware of the different forces, accountants will be able to more aptly ensure that justice prevails in the country they operate.As evidenced above, accounting regulations vary across countries, time, and cultures which causes significant variations in the role of the accountant. While countries have been extending efforts to strengthen accounting rules and oversight, this alone cannot and will not prevent future fraud. (Leuz, 2002). But there are many benefits to implement strong laws and enforcement in order to protect shareholders rights. U.S. firms are not the only ones experiencing problems, as many firms globally are suffering from accounting irregularities. some(a) countries experience self-dealings and misappropriations of meshing because of weaker legal measures. Weak legal measures create a greater incentive to manipulate the financial statements to conceal poor business performance. Manipulation is less apparent in places where outside investors have legal rights to vote out corrupt managers. However, manipulation is predominant in places alike Austria, Italy, Germany, Southeast Asia, South Korea and Taiwan, because they do not have investor protection.East Asiatic PerspectiveThe East Asian countries, Hong Kong, Malaysia, capital of Singapore, and Thailand can help accountants see the way that accounting standards interact with the incentives of managers and auditors. (Ball, Ashok, et al, Incentives versus standards) The accounting standards in these countries come from a common law environment. Common law countries generally create high fictional character financial reporting. However, in these countries the preparers incentives generate low quality financial statements. The preparer incentives again, depend on the market and political forces and how these force s interact with one another. Market forces are dependent on the demand for high-quality financial reporting. The political forces depend on the government involvement in the creation and enforcement of the regulation. The interaction of these forces with the accounting system can drastically change the role of the accountant in these countries. The standards themselves are viewed as high-quality, but the institutional structure creates incentives for preparers incentives to issue low-quality financial reports. pecuniary reporting in East Asia generally exists with an incentive structure that is convertible to a code-law model. However, the East Asian countries do not follow that model. Their governments have code-law reporting incentive features, but also have indications that the environment reduces the financial reporting quality. The large amount of family-owned businesses and enterprises is a cause for the low need of quality financial statements. One family generally owns inve stments that are inter-related. These networks are commonly referred to guanxi networks. These networks attempt to take away the demand of required disclosures and timely loss recognition and it also reduces the communication required with stakeholders.The extent of government involvement in the standard setting and the financial reporting practice differs across these countries. Political factors can create an incentive to hide large profits and losses. The political environments in these East Asian countries have a mark to want companies to succeed, so they recommend companies hide losses. They also are terror-struck of other countries becoming involved in their practices because they do not want to be held accountable for any misstatements. The companies are also expected to report smooth earnings, which reinforces the desire to report, cover, and hide losses. Litigation is minimal in these countries since there is a large incentive to hide earnings, which the government reinf orces. There have been very few cases of judicial actions in these countries. Audit quality in these countries is poor primarily due to lack of auditor independency. The influence and independence of the accounting profession is an indicator of ineffective enforcement of accounting standards. Considering the financial incentives for managers and auditors there is a greater incentive for reduced timeliness and conservatism in accounting earnings.Fraud is continuing to go undetected in Hong Kong. Although there is a 22% incidence of fraud, much more is expected to be going on given the different forces that are currently having an effect on the country. As a result, currently more scrutiny is being given to the monitoring of financial transactions and corporations are beginning to make it a priority. There are currently programs that are offered for certification in forensic accounting, which is having an impact on fraud detection. Most of the fraud cases that exist in Hong Kong are internet banking fraud, computer fraud, misuse of corporations credit card, and electronic funds transfer fund.There is a need for more forensic accountants in Singapore in order to ensure sufficient justice as many significant fraud cases are going undetected. 2 important fraud cases involved Fibrechem Technologies and Oriental Century. In the Fibrechem Technologies audit, Ernst Young Singapore were not certain of the cash and trade debtor balance. KPMG had the same problem with Oriental Century. Another notable case is one in which a Singapore monk, who was in charge of Singapores well-known charities, received 10 months in prison for committing fraud.In Malaysia, the role of accounting in the fight for justice is very small. Crimes are beginning to become more and more complicated and controlled but forensic accounting is viewed as a service that only larger companies can afford. This makes controling fraud more difficult. Cases that are investigated are generally handled by t he Bukit Aman Commercial Crime Division. This group was able to catch a large fraud that involved the CEO and two others of Transmile assort Bhd for publishing misleading financial statements and has often been called Malaysias Enron.Fraud and forensic accounting is a relatively new topic in Thailand. According to an Ernst Youngs global survey, more than half of the companies in Thailand have suffered significant fraud. The management of the corporations was amenable for over half while employees ranked second, responsible for 45% of the fraud incidents reported. Asset misappropriation was the biggest concern. (MPA Program Forensic accounting project) The commercial crimes in Thailand are becoming more and more complicated and organized. Forensic accounting is used to combat this to an extent, but is only utilized in the public sector. It is also noted in Thailand that there remains an enormous amount of well documented corruption related to the government amounting to billions o f US dollars. There are many cases where Thailands auditor general, Jaruvan Maintaka, was able to bring about cases against members of the government but there are even more cases linked to the forces involving loans from politicians.Chinese PerspectiveThis accounting profession is still at the earliest stage of development in China, and a lack of skilled professionals creates problems for regulators. To a large extent the accounting standards and practices in China lack conservatism Doupnik and Perera note in their International Accounting textbook. There are also no sound interpretations of the relevant requirements that need to be implemented to have an effective accounting system. The theory of true and fair presentation and enhancer may not be clearly understood by Chinese accountants. Until the 1980s, those who carried out accounting work were not held in high interpret which had a very negative effect on the development of the accounting profession in China. Unlike in oth er countries, accounting and auditing have taken different paths in their development as rival disciplines with the support of different government agencies. However, there has been some growth in the accounting profession due to the recent economic reform program and the demand for financial information from investors has increased.There are many fraud cases evident in China. One high-profile case that deserves mentioning was with Zhu Xiaohua who was the chairman of state-owned company, Everbright Group. Zhu was convicted to 15 years in prison for taking $500,000 in bribes. These bribes were taken between 1997 and 1999. The bribes were for the purchase of shares in a company that resulted in large losses. Another example of fraud in China was when a business woman, Du Yimin, was sentenced to death for running a Ponzi scheme that cheated investors out of YUAN700m ($102 million). (Lin, 2009) According to Lin, the Chinese Ministry of Public Security has been stepping up such prosecuti ons and says there are now 1,416 similar cases open, involving YUAN10bn ($1.5 billion) in investors money. In China it is still possible to receive the death penalty for fund-raising fraud, however, if a Chinese person is charged with collecting money illegally from private investors, the maximum sentence is 10 years in prison. In China is evident that ethics are not being followed across the board. Nipponese PerspectiveJapan also differs from other cultures and has a different role of the accountant and effectively different need for justice. The Japanese attitudes towards external auditors and the audit function are different from others. This is due to the cultural value taste of not trusting someone from outside the group. Companies are not under pressure from their main providers of finance to disclose information publicly and companies are reluctant to provide information voluntarily. As a result, the a