Motivations for Ethical Behavior

PUNISHMENT/REWARD

This is the most basic motivator for ethical behavior, and is closely tied to the first developmental stage, duality.  Most of the legal rules fall into this category.  People at this level evaluate the relative punishment or reward proceeding with an action.  The punishment or reward reward before proceeding with an action. The punishment or reward associated with the act gives the individual an idea of how right or wrong something is. For example, murder must be a more significant wrong than jaywalking. The punishment for the former may be the gas chamber, versus a small monetary fine for the latter.

Pentagon of Integrity

There are five basic sources of pressures individuals face in daily activities.The ability to resist these temptations creates the core of an individual's ethical character.
The categories of temptations can be summa­rized as follows:

 POWER - There are five principal types of power sought in our society:

Political - The drive to accumulate constituents/votes.

Religious - The motivation to acquire followers to a particular belief.

Traditional Sources of Ethical Training

family

The family unit is the primary foundation of behavioral learning and establishment of values. Unfortunately, American families have changed drastically in the past seventy-five years. The post­ war (World War II) construction of suburbs and super-highways allowed people to seek jobs in cities, often far from "home," removing their children from frequent interaction with grandparents and other family members (aunts, cousins, etc.).  While creating more mobility, it also caused two long-term difficulties. 

The Absurdity of Audits

The following companies have at least 5 things in common:

 Bank of America • JPMorgan Chase • Capital One Bank (Credit Cards) • Goldman Sachs • Citigroup • Keycorp • Wells Fargo • AIG (Insurance) • American Express • US Bancorp • Merrill Lynch • General Motors (including GMAC Financial Services) • Chrysler (including Chrysler Financial)    Answers below*

The general public tends to think of certified public accountants primarily as tax preparers, but anyone can help you file taxes.  Basically, the only thing CPAs can do that you can’t (legally) do is issue an “opinion” on financial statements; specifically, performing the “annual audit.”

For many organizations, foregoing the annual audit is not an option; they are often required by law, grant requirements or loan covenants.  Most directors and stockholders/members (and lenders!) are under the impression the audit is an indication all is well.  By the time an audit report is received (4-6 months after year end) the organization could be in serious trouble.  Even then, it never addresses critical questions: