Abstract
This study is an ethical analysis, focusing on professional ethics. Given accountants’ involvement in the strategic-planning decisions of organisations, the study examines whether that involvement extends accountants’ public interest responsibilities, as members of a full profession, beyond issues of a financial nature to issues of death and injury. It is management accounting, as opposed to financial accounting or audit, that is of particular importance for the study because one part of management accounting is strategic planning.
Three real-world disasters are at the core of the study: the chemical explosion in Bhopal, Nestlé’s marketing of infant milk formula to the developing world, and the Ford Pinto car (referred to as ‘Bhopal’, ‘Nestlé’ and ‘Pinto’ respectively). Estimates differ as to the number of victims from each case; authors tend to refer to the victims of Pinto as being in the hundreds to thousands, the victims of Bhopal as being in the thousands to tens or hundreds of thousands, and the victims of Nestlé as being in the millions.
When discussed in the business ethics literature, Bhopal, Nestlé, and Pinto tend to be looked at in terms of the roles and responsibilities of corporations in society, using the concept of Corporate Social Responsibility or other similar term. This study takes a different approach, using the cases instead to examine the professional responsibilities of accountants when involved in such tragedies. The difference between the two approaches is that corporate social responsibilities are typically seen as normative responsibilities (that is, how corporations should behave), whereas professional responsibilities are not merely normative, they are obligatory.
Overall, the study seeks to determine the professional obligations of accountants involved in strategic planning in cases such as Bhopal, Nestlé, and Pinto; the extent to which accountants and their profession have been fulfilling the obligations; and why there has been so much silence on these matters to date. To answer those questions the literatures on professions, economics, and accountancy are examined.
The study argues that accountants have an overriding obligation to act in the public interest, taking into account the requirements of ordinary reflective morality and any applicable special morality. By examining a potential special morality based on Adam Smith’s and Milton Friedman’s works on the free market, as well as ordinary reflective morality and the social value for which accountancy received professional status, the study concludes that accountants have an obligation to protect the public from powerful business interests. For strategic-planning accountants, that obligation cannot legitimately be limited to financial loss. Strategic-planning accountants involved in cases such as Bhopal, Nestlé, and Pinto could, accordingly, be held ethically responsible for the death and injury suffered by the victims of those tragedies.
The accounting profession has not in general been protecting the public from powerful business interests, or recognising that its obligations are not necessarily limited to financial loss.
The study argues that the silence on these matters to date has arisen from how uninformed the public and academics are on the issues