Is current business immoral?

In relation to the morals of business ownership and managerial decisions, it can be viewed in
numerous aspects and in various levels. With this, the increasing rate of business growth and
industrialisation in our modern world has led to skepticism on whether or not a corporate
social responsibility is being adhered too. In many businesses, there would be some extent of
an immoral act occurring throughout the stages of a business, but the question is to identify to
what extent are we able to label acts as immoral , and whether or not it positively or
negatively impacts onto the individuals, families, and communities of modern Australia.
Additionally, after watching the documentary film Inside Job, a distant belief that modern
day businesses take full accountability of their actions, and act in accordance to current
legislation, government policies, and social expectations of the community was becoming a
growing concern. This report will outline and discuss the issues surrounding modern
businesses, and the corporate social responsibility of morality.
One undertaken action that can be classified as immoral in businesses is the act of tax
evasion. Through the article Tale of two taxpayers: How Gina Rinehart and Andrew Forrest
took different paths", illustrated how prestigious or powerful people, especially those with a
high income, avoided paying tax. In addition, the article outlined the opposite paths of two
iron billionaires; while Gina Rinehart was paying the tax of $466 million from $2.85 billion
in revenue, Andrew Forrest with his private company Tattarang Pty Ltd did not pay his tax,
with reports displaying a taxable income of $284.6 million (ACCG399, 2016). The article
outlines that even though numerous corporations pay their tax, there are still many businesses
performing immoral acts such as tax evasion, despite the fact that they earn large quantities of
profit annually.
The Australian Taxation Office has stated that around 30 per cent of large private companies
did not pay their corporate tax in the 2013-2014 financial year. One company known as the a
Co-operative Bulk Handling, the West Australian grain handling cooperative; earning more
than $3.4 billion but avoided paying no tax in 2013-14. Furthermore, Hoyts with gross
earnings of $417 million, McDonalds Asia-Pacific Consortium with revenue of $478
million, Pratt Consolidated Holdings with revenue of more than $2.5 billions were found
avoiding tax payments. There were a variety of reasons for as to why businesses were not
paying their tax, as they were legitimate and justified by Chris Jordan, a tax commissioner.
Jordan stated that these companies might not have made any profit due to further business

investment or losses in previous years, even though they may have earned more than $200
million in revenue (ABC news, 2016). However, it may seem legally justified, but the
question is can this action ever be more moral and ethical of a practice. With this, certain
companies even shift their profits to oversea entities in low tax jurisdiction, utilising this as a
tool to avoid paying tax as a large part of their Australian revenue was not taxable income.
Those performances clearly demonstrate an immoral act within the business. In other words,
how could an accountant and their role be relevant towards the tax avoidance schemes?.
According to Russell Guthrie, IFAC Executive Director, as professional accountants, their
key role is to assist their employer taxpayers or their clients regarding tax obligations. Forum
on Tax Administration from 45 countries acknowledged that accountants play an crucial role
in ensuring that the tax systems of their company or their client function properly. However,
in these tax avoidance cases, it was clear that these tax systems did not function properly. As
a professional accountant, you should never be associated with an unlawful offence such as
tax evasion, but it is a difficult dilemma to both taxpayers and accountancy profession to
justify whether these tax evasions' are legal. In accounting firms, clients would essentially
consult an accountant with the expectation of quality service to advise them about the tax
scheme, and their expectation to save their tax. This builds a contradiction between
accountants and their clients, while public and media opinions sensationalise and condemn
tax planning issue, as clients are prepared to sue their accountant if they did not give the most
effective strategies to save a client's' tax. Examples to highlight this dilemma is the case
Mehjoo v Harben Barker [2013], where Mehjoo claimed damages against Harben Barker,
his former long-standing accountants, for negligence (Connoly, 2013).
Furthermore, in some case conflicts often occur between accountants' ethical and actual
expectation from their higher managers or employers. They might have been asked to provide
such tax avoidance scheme, and this clearly demonstrates their integrity towards whether they
are professionals with in their accounting roles or not. As professional accountants, they play
a crucial role in functioning taxation systems properly and effectively. They assist and advise
their clients and employers on how to thoroughly understand and comply with the regulatory
obligations regarding taxation. Accountants also need to ensure that their clients or employers
understand clearly about the available options for their case; thus, on one hand, accountants
need to help them to be as tax-competitive as possible, but on other hand, they also need to
ensure that their clients or employers are completely competent regarding the consequences
for each option such as potential consequences in relation of reputation (Russell,

2014). Importantly, professional accountant must be obliged to follow with strict ethical
principles such as APES 110 Code of Ethics for Professional Accountants, and are guided by
the integrity and professional behaviors fundamental principles. Furthermore, accountants
also play a crucial role in combating against tax avoidance; for example, in public practice,
accountants need to help clients to comply with their legal obligations, in the case of
unwilling client, accountants need to take an actions, either resigning from their positions, or
reporting this immoral matter to regulatory authorities or court. Generally, accountants play a
significant role in properly tax systems, clients and employers' knowledge about these
systems and consequences, ethics, and business advisory, etc,.
With the above discussions, it clearly demonstrates how important an accountant role is and
how their role will affect the immoral of the current business in term of tax evasion'. In a
more specific case about immorality in business, Nike can be a significant example. In the
1990s, Nike was under fire for abusive labour practices as the company made young children
work for little money, as little as 14 cents per hour. Nike almost lost its ubiquitous popularity,
as at that time, Nike CEO, Phil Knight, had said: Nike product has become synonymous
with slave wages, forced overtime, and arbitrary abuse". But it started to change it practices,
such as raising the minimum wages, ensuring factories had clean air, improving labour
practices' oversight etc, (Ashley, 2015). These changes helped Nike to overcome their crisis
as the company has become more transparent about the labour practices publishing public
reports of conditions in its factories. Nike's legal battle and overall case decision
demonstrated that businesses could change, either from moral to immoral or vice versa. Thus
it would be hard to argue that whether the current business is totally immoral.
To summarise, this report discusses about whether the current business is immoral or not; as
the business is always changing, it would be hard to choose only one side. However this
report discusses some of immoral actions within the current business such as tax evasion. Tax
can be seen as a social responsibility, as the fair amount of tax payable from the corporations
will provide more funds into public services of the country such as education, healthcare and
infrastructure, thus, tax avoidance can be seen as unethical practice. As business would never
stay the same, it could always change for better or worse, therefore, accountants play
significant role in helping the business to become morality. And as professional accountants,
you will often face a situation where you need to combat for your own ethical and integrity,
as it will also help in building the moral business world.