Accountants and the ethics of profit

The case of the Australian retail industry

Rahat Munir, Craig Terry

Research output: Contribution to journalArticle

Abstract

Pressures are mounting upon Australian retailers including their ability to grow profit. Price deflation for many items, a lack of wage growth, and, the rise of huge online platforms is just some of the factors now creating difficulties for retailers. In the absence of sales growth, profit can only be improved with a focus on the cost side of the business. And, it is this focus that has brought about the potential for unethical decision making. This case study examines the role of accountants in influencing this decision making. Accountants are often seen as the experts when it comes to cost control. Consequently, they have a unique opportunity to use their position to help ensure that when governance processes surrounding cost (and profit) management are established, or when key decisions are made, these are undertaken on an ethical basis. This teaching case explores this issue within three scenarios relevant to the current Australian retail industry. Firstly, the ethical concerns of the use of power by the big retailers to reduce costs within international and domestic supply chains are examined. Secondly, recent instances of questionable practices to inflate profits through rebate, and other, accounting methods are analysed. Finally, the design of remuneration systems is discussed within the context of whether these are creating unethical biases within organisational decision making.
Original languageEnglish
Pages (from-to)327-348
Number of pages22
JournalJournal of business ethics education
Volume15
Publication statusPublished - 2018

Keywords

  • retail industry
  • ethics
  • professional accountants
  • case study

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