Legal work and ethical behaviors are often entangled in a way that can be difficult to decipher. However, it’s important to understand the difference between a legal judgment and an ethical decision, as the two may seem at odds with one another.
First: what is ethics? In general understanding, ethical behavior falls under a system of morality concerned with what’s good for both individuals and society. It concerns how people should and shouldn’t behave, and different societies and cultures have different ideas of ethical behavior.
In contrast, the law is a system of rules and guidelines that are meant to be separated from ethics and morality and are enforced through social institutions like courts and law enforcement. In general terms, the law affords punishment through fines, community service, jail time, etc. when one breaks the rules. However, when one breaks an ethical rule, enforcement is more often public shame or the loss of personal relationships rather than money or time.
In a perfect world, legal judgment and ethical judgment would be seen as wholly separate, with individuals keeping their moral bias out of the legal system. In our current world, however, we see an intermingling of law and ethics; laws are made based on religious ethics, for example, or judges hand down lenient sentences based on their personal view of morality. This can pose issues when a situation is clearly harmful and illegal, despite the personal feelings and opinions of the judge.
However, having a society that attempts to live ethically can also have positive results on legal judgments, as a society that is aligned in their belief of what is ethically and morally right will tend to agree on what is legally right. This means that most citizens will be “law-abiding,” obeying both the legal system and the ethical — or moral — one.
What does this mean for us? As business owners, lawyers, CPAs, or individuals? When navigating the business of business, how do we distinguish between what is ethical and what is legal? Do they always align, or are there differences that we have to be aware of to protect ourselves and our clients from harm? Every day, you make countless ethical decisions. But what do you do when faced with an ethical dilemma?
In business, ethics and legality are often even more intertwined than they are for the average person. An ethical dilemma could lead to legal repercussions for yourself, your business, the employee who caused the issue, and even potentially your client. It’s your job to understand where ethics and laws meet in your line of work, so you know how to handle a situation as it arises. Being prepared is the best way to prevent ethical issues from arising at all.
If you are an individual CPA or a firm that is looking for more information on how law and ethics mingle in everyday business practices, the Perkins Law Group offers
Practical Ethics for In-House CPAs
as part of our mandatory compliance training. The course is custom-designed to meet your needs, as well as state ethical training requirements.
This article is legal information and should not be seen as legal advice. You should consult with an attorney before you rely on this information. This article does not create an attorney-client relationship.