Accounting Ethics Courses: A Professional Necessity

By David F. Bean and Richard A. Bernardi

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Retaining or improving its previous level of trust and respect requires the profession to take proactive measures to restore its credibility. The National Association of State Boards of Accountancy (NASBA) is reviewing the comments received on its exposure draft for Rules 5-1, “Education Requirements—Definitions,” and 5-2, “Education Requirements—Determining Compliance of the Applicant’s Education.” A major issue in the exposure draft is the requirement for ethics courses in accounting education. NASBA has received strong opposition from many academics. In the authors’ view, practicing accountants should control the agenda on qualifications to become a CPA and should become active proponents of ethics education both in the initial education of those entering the profession and in continuing professional education. The views of the educational institutions and accounting faculty responsible for preparing students for entry into the accounting profession are not always the same as those of practicing professionals.

Institutions of Higher Education

The ubiquity of ethics in the mission statements of both universities and business schools requires greater scrutiny. Many college mission statements contain claims such as “Our graduates are ethical leaders in the business and community” and “We produce ethical decision makers.” Yet only a handful of institutions require an ethics course as part of a student’s liberal arts education, and few require a business ethics course. If ethics is a meaningful component of a school’s mission statement, then it should be supported by the requirement of ethics courses in the curriculum

Accounting Academics

The most vocal opponents of the call for increased ethics education are committed proponents of the neoclassical economics paradigm, who seem to perceive ethics education as a threat to their conception of accounting. Many members of this group appear to be deeply offended by what they believe was a failure by NASBA to obtain their approval on the inclusion of ethics courses in the accounting curriculum; they are lobbying for a committee to study the matter before NASBA goes forward with an ethics requirement.

The authors’ interpretation of this request for a committee is twofold. First, one must ask where these critics have been lately, because ethics is not a new or even recent concern to the profession. Second, burying the issue of ethics education by forming a committee to ensure nothing will result is a political strategy.

Opponents of ethics courses in accounting have framed the debate in a manner that places an undue burden on the proponents of such ethics courses. The opponents demand proof that ethics courses result in a significant increase in the ethics of accountants or that ethics courses significantly improve the education of accountants. The issue should be recast to ask: “What courses are more important in a curriculum educating accountants than an accounting ethics course?” The burden of proof has been and continues to be misplaced; a fairer assessment is needed. NASBA’s proposal of three ethics courses would represent nine credits in a 150-hour curriculum, or just 6%. Surely the most severe threat to the accounting profession deserves more attention.

Some members of the accounting academic community argue that research is needed to demonstrate the effectiveness and need for ethics courses in accounting. Again, while this is probably an honest concern for some academics, others will never be sufficiently convinced by the evidence. Unfortunately, many view this as a tactic to permanently delay the implementation of ethics courses for accountants. If these accounting academics were interested in the topic, they would be publishing a significant quantity of articles on ethics, which would be spawning additional research. Yet, in the premier journal of accounting academics, The Accounting Review, over the period 1980–2004, less than 2% of the published articles were on the subject of ethics. Such a low figure demonstrates the lack of interest in ethics by the accounting academic community and supports the notion that the academic community significantly distances itself from the concerns and realities confronted by practicing accounting professionals.

Training Ethics Researchers/Teachers

The authors propose that an initial course in ethics, rooted in philosophy and ethical reasoning, should be a required course prior to taking a discipline-specific ethics course in either business or accounting. A discipline-specific ethics course in accounting is essential to the education of students preparing for the profession, and should be taught by tenure-track accounting faculty. The authors believe that accounting faculty are the most appropriate teachers of accounting ethics. Within such a course, accounting students should be exposed to real-world dilemmas that capture the complexities and technicalities they will confront in the future. Although liberal arts professors are well versed in ethics, very few have a technical background in accounting or knowledge of the business world, which are essential components of an accounting ethics course.

There is currently a shortage of accounting ethics teachers and researchers; for example, Bernardi (“A Commentary on Suggestions for Providing Legitimacy to Ethics Research in Accounting Education,” Issues in Accounting Education, 2004) points out that only 168 of 6,200 accounting faculty indicate that ethics is an area of research interest to them. Additionally, while approximately one-third of the journals in the marketing and management areas of business education indicate an interest in professional responsibility and ethics, only four of the 131 (3.1%) accounting-related journals indicate an interest in these areas.

The quantity and quality of accounting ethics teachers and researchers would increase over time if academics included ethics articles in their publications. Professionals can effect change by contributing or redirecting funds to doctoral-granting institutions that are actively engaged in producing ethics research, and graduating doctoral students that produce ethics research. These institutions are identified in “The Place of Ethics Scholarship in the U.S. Accounting Academy: Accounting Doctorates’ Research Productivity in Ethics Journals,” by Richard A. Bernardi, David F. Bean, and Paul F. Williams, Research on Professional Responsibility and Ethics in Accounting, 2005.