Is the Time for Ethics in Education
JUNE 2005 - Recent
corporate accounting scandals have brought ethics back into
the limelight. The sight of CEOs and CFOs parading into courtrooms
has raised public awareness and concern about ethical behavior
in management and accounting. The Wall Street Journal
reported an increase in accounting fraud classes in colleges.
In July 2004, PricewaterhouseCoopers LLP held training sessions
on ethics for accounting professors. According to Brent Inman,
partner in charge of U.S. recruiting at PricewaterhouseCoopers,
“Accounting and ethics are intertwined,” the challenge
being to integrate ethics into the accounting curriculum.
The author’s survey of undergraduate accounting programs
in New York indicated that only two-thirds included ethics
in their introductory accounting course. The passage of the
Sarbanes-Oxley Act and SAS 99, Consideration of Fraud
in a Financial Statement Audit, underscore that ignoring
ethics in accounting education is no longer an option.
the current ethical climate in business as reflected by
the plethora of news stories in the media, the course in
business ethics is becoming more important to our graduate
and undergraduate business school programs.” This
statement from a 1989 Journal of Business Ethics
article indicates that the ethical issues in accounting
education are not new. In 1986, the Bedford Committee recommended
that ethical standards be an integral part of accounting
education. Similarly, the Treadway Commission in 1987 called
for greater emphasis and inclusion of ethics in every business
and accounting course. The American Assembly of Collegiate
Schools of Business (AACSB) and the AICPA recommended that
accounting students receive ethics education at the general
education level, the business administration level, and
in every accounting course. According to a survey by Robert
J. Warth, as reported in the October 2000 CPA Journal
(“Ethics in the Accounting Profession: A Study”),
most CPA firms rely on colleges to teach the ethical behavior
expected in the profession. In their 2000 study Accounting
Education: Charting the Course through a Perilous
Future, Albrecht and Sack recommended that accounting
education should focus more on ethics, values, and integrity.
widespread agreement that ethics should be an integral part
of accounting education, implementation has not been successful.
Several surveys conducted in the late 1980s found little
integration of ethics into the accounting curriculum. A
2003 survey by the American Accounting Association (AAA)
found that only 46% of schools offered a separate course
in ethics. The majority of those courses did not provide
adequate coverage of ethics, values, and appropriate professional
conduct, as reported in the January 2005 CPA Journal
(“Teaching CPAs About Serving the Public Interest,”
by Nicholas J. Mastracchio, Jr.).
study (Frances McNair and Edward E. Milam, “Ethics
in Accounting Education: What Is Really Being Done,”
Journal of Business Ethics, October 1993) reported
that the average time covering ethics in an accounting course
was a little over three hours. A 2002 review of websites
and curricula of accounting programs found that new courses
are being offered on corporate governance, fraud detection,
and professional responsibility. Recent corporate events
have also heightened student interest in accounting and
an understanding of its importance.
Teaching Ethics Effective?
studies have concluded that ethics education does have a
positive effect upon students. Paul M. Clikeman and Steven
L. Henning (“The Socialization of Undergraduate Accounting
Students,” Issues in Accounting Education,
February 2000) surveyed college sophomores and found no
significant differences between accounting and other business
majors in their willingness to “manipulate earnings.”
A resurvey of these same students as seniors indicated that
accounting majors were less willing to manipulate earnings
than were other business majors, suggesting that accounting
education does promote fundamental ethical awareness of
professional responsibility. Despite evidence that ethics
education can be effective, many accounting programs continue
to avoid teaching ethics. Considering the current climate,
educators can no longer continue this inertia.
Goals of Ethics Education
education, as defined by Langenderfer and Rockness, is more
than studying the code of professional conduct, but rather
a process whereby individuals become more consciously involved
in making ethical decisions (Harold, Q. Langenderfer and
Joanne W. Rockness, “Integrating Ethics into the Accounting
Curriculum: Issues, Problems, and Solutions,” Issues
in Accounting Education, Spring 1989). Cheryl R. Lehman
(“Accounting Ethics: Surviving, Survival of the Fittest,”
Advances in Public Interest Accounting, 1988) concluded
that one of the main goals of ethics education should be
to encourage students to recognize social responsibilities
within their profession. Stephen E. Loeb (“Teaching
Students Accounting Ethics: Some Crucial Issues,”
Issues in Accounting Education, Fall 1988) listed the
development of abilities needed to deal with ethical conflicts
and uncertainties as key objectives in educating accountants.
ability to self-regulate may be ineffective unless individual
professionals understand and apply their profession’s
ethical standards in actual practice. Ineffective professional
self-regulation inevitably leads to government intervention.
Linda Kidwell, at Niagara University, has students develop
an academic code for their classroom, thus demonstrating
that ethical behavior is an integral part of the workplace
(“Student Honor Codes as a Tool for Teaching Professional
Ethics,” Journal of Business Ethics, January
2001). The goals of ethics education are creating an awareness
of ethical dilemmas and providing methods of resolution.
author surveyed department chairs of 77 colleges in New
York State, both public and private, that grant associate’s
and bachelor’s degrees in accounting. The questionnaire
focused on the introductory accounting course and asked
respondents to estimate course time spent on ethics, as
well as to list other courses that included ethics.
of the 77 programs (53%) sent the surveys responded. Of
these respondents, 66% reported discussing ethics in introductory
accounting courses (see Exhibit
1). Of the 14 programs that do not currently include
ethics in the introductory accounting course, four (29%)
plan to do so in the future. The time spent on ethics varied
greatly, from a half hour in the semester to integration
throughout the semester, but the average was 3.7 hours per
semester for a three-hour weekly class (see Exhibit
2). Nearly all respondents (98%) indicated that ethics
was discussed in an intermediate, auditing, tax, cost, or
advanced accounting course (see Exhibit
3). A few programs included ethics in senior seminars
and other electives, such as forensic accounting and accounting
York State requires CPA candidates to pass an ethics exam
before licensing, as do over half of the other states, and
it also mandates an ethics component in the continuing education
requirements. The impact of state ethics requirements on
accounting programs is a promising topic for future research.
from programs that include ethics in introductory accounting
courses indicated a desire to include ethics from the beginning
to the end of business education. Most programs that omitted
ethics cited time constraints and the concern that introductory
accounting students lacked the degree of competence and
sophistication to benefit from the case studies often used
to teach business ethics.
programs integrated ethics throughout every accounting course.
One professor suggested implementing an “across the
curriculum” approach to convey the message that ethics
is an inherent part of accounting, not just a textbook chapter.
According to several respondents, it may not be possible
to teach values, but exposing students to common ethical
dilemmas and methods of resolution should be an integral
part of accounting education.
is disappointing that only two-thirds of the respondents
reported discussing ethics in introductory accounting, because
it is a course taken by all business and accounting majors.
Although the average of three and a half hours per semester
may be acceptable for introductory accounting courses, the
cumulative average of nine and a half hours over a four-year
degree, as reported in a 2001 Ohio survey, seems inadequate.
only 24% of respondents required accounting majors to take
a course in ethics is another concern. Romal and Hibschweiler
(“Improving Professional Ethics,” The CPA
Journal, June 2004) concluded that issues such as inertia
or lack of faculty expertise add to the difficulty of getting
ethics into the classroom. A separate course in business
ethics at the junior or senior level assures adequate coverage
and demonstrates its importance. In other professions, such
as medicine, law, and engineering, separate courses in professional
ethics are required. Many respondents, however, indicated
that implementing a separate ethics course would be difficult
without getting embroiled in college politics.
accounting programs continue to ignore the unanimous opinion
of the AICPA, the AACSB, the Treadway Commission, and the
Bedford Committee that ethics be an integral part of accounting
education? Many states now require CPAs to pass a separate
ethics exam or complete a course in ethics for licensure,
as well as include ethics in their continuing education
requirements. Many accounting professors structure their
courses around the CPA exam, less than 5% of which is devoted
will grasp the importance of ethics only when educators
give it the same priority as other areas of accounting.
Academia should accept ethics as a research and teaching
specialty equal to other areas of accounting. CPAs should
emphasize to faculty and administrators the importance of
ethics teaching, such as speaking to students, holding faculty
training sessions, or funding faculty curriculum development
in ethics. Stressing the importance of the fundamentals,
character, integrity, and responsibility should be part
of accounting education.
Haas, CPA, is a professor at Kingsborough
Community College, City University of New York, Brooklyn,