Conscience. Usually that word is used to refer to a moral compass. Literally, however, it means "parallel knowledge". Similarly, the word confess means "parallel speech". In those senses, the words don't have to refer to a sense of bad or good at all; they can apply to a great deal more.
Now, I'm not trying to redefine the words, but the literal definitions are useful. For instance, I think of Bach's contrapunctal music as being an expression of conscience. The intertwined melodic patterns are very often of a "repeat after me" construction, hence, parallel speech or knowledge. See "http://www.youtube.com/watch?v=ZnAEe8Ayxa8" for an example.
Or, consider how confession is generally used to refer to admitting guilt. In the literal sense, however, confession can also be used to admit good things. For example, when God says to his people, "reckon yourselves dead indeed unto sin, and alive unto me", then it's a good confession to say, "yes, I'm indeed dead unto sin, and alive unto you."
Ultimately, good conscience is walking in the parallel knowledge of God, "having a good conscience towards God".
How does this apply to writing? Well, one thing I've noticed about modern stories (especially movies), is how even when portraying scenes of other times and places, the characters often have modern consciences and sensibilities. That doesn't feel right to me at all; the parallel knowledge that the characters are aware of is out of place, anachronistic.
I realized that part of building a character is building the parallel knowledge that they are aware of and are sensible to. Generally that parallel knowledge will be shared among certain people and groups, so I might have characters belonging to different sets of parallel knowledge.
For example, I was once at a week-long gathering with some folks from Europe, and they were remarking on how we Americans wear white socks, and how they only wear those kinds of socks to sporting events. :)
Parallel knowledge is perhaps just another way to look at different cultures, but for me it's more precise, and makes it easier to work with.
Ironically, I need to be aware that my characters need to be aware of parallel knowledge fitting their time and place, else they'll all share mine, and that won't do. :)