Ethics in Accounting Education: The Forgotten Stakeholders

By Richard A. Bernardi and David F. Bean

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JULY 2006 - The National Association of State Boards of Accountancy (NASBA) recently issued an exposure draft on proposed revisions to the Uniform Accountancy Act, Rules 5-1 and 5-2. NASBA is currently reviewing the comments that have been received. Practicing professionals and academics are certainly invaluable to the review process. The views of students pursuing accounting degrees, however, are seldom received and should be considered when establishing the requirements to sit for the CPA exam.

As part of an advanced accounting course at a private college in New York State, 30 students were required to take a position on the NASBA proposal for additional ethics courses and to support their decision. By a two-to-one ratio, the accounting students surveyed were in favor of NASBA’s proposal for additional ethics courses.

The students’ comments were insightful and indicative of those desiring to enter the profession. Many of the students advocating additional ethics courses argued that ethics should be taught as separate and distinct courses and not interwoven into the business curriculum. Many students also expressed that the 150-hour requirement will discourage students from studying accounting.

Opinions on Requiring Ethics

The accounting profession and its regulators have overlooked their responsibility to solicit students’ views on requiring a separate accounting ethics course and business ethics course, as well as the importance of ethics within the accounting curriculum. In this study, students advocating ethics courses took some interesting positions not generally seen or publicized. They are strong proponents for their point of view, and their supporting reasoning provides an insight into their fervor (the comments throughout are taken directly from students’ responses):

  • Ethics is highly depended on in this profession. The importance of it is being minimized by our curriculum’s refusal to integrate ethics as required courses.
  • It seems foolish of these authorities to make so many excuses concerning an issue that so obviously needs to be solved.
  • Ethics is a field of learning, not a personality trait.

Teaching Ethics

With regard to whether ethics can be taught in the classroom, the position of students is similar to those of professionals and academics.

The two basic opposing viewpoints are:

  • ethics can and should be taught in the classroom; and
  • ethics cannot be taught at this stage, and someone is either ethical or not.

Some of the more interesting student views and concerns about the place of ethics in the curriculum were as follows:

  • Accountants should always represent the highest level of professionalism, and enforcing ethics upon accounting students is crucial to the values they develop while completing their education.
  • While ethics education is vital to the success of all professionals in the business field, it [is not] something that can be taught.
  • An institution or college might be able to teach good solid ethical values in the classroom, but the teachings will not always stick.

The Need for Ethics Courses

NASBA’s proposal seems to respond to the Association for the Advancement of Collegiate Schools of Business’ (AACSB) Ethics Task Force’s (AACSB, Ethics Education in Business Schools, AACSB International, St. Louis, 2004) recommendation for “member schools and their faculties to renew and revitalize their commitment to ethical responsibility at both the individual and organizational levels. Schools should be encouraged to demonstrate this commitment throughout their academic programs.” While some institutions may respond that they are meeting the requirement for ethics coverage using an across-the-curriculum approach, the results of AACSB team visits do not support this claim. Many commentators think that our business school curriculum “may be inadvertently overemphasizing technical training and ignoring ethical considerations” (Steven Lysonski and William Gaidis, “A Cross-Cultural Comparison of the Ethics of Business Students,” Journal of Business Ethics, 1991).

The students held similar viewpoints:

  • Even if the program became a requirement, professors will most likely ignore ethical issues and will instead use the time to focus on issues stressed on the CPA exam.
  • As a college student[,] I am being taught new material every day yet these subjects are not under any scrutiny. Therefore, why is it hard for society to accept that there is a need for ethics to be taught in the classroom as well?
  • If the students are not willing to further develop their personal ethical code of conduct, then the program will essentially remain ineffective in its mission to incorporate business ethics into the accounting field.

Recent research has indicated a pandemic of cheating in educational institutions. For example, J.W. Michaels and T.D. Miethe (“Applying Theories of Deviance to Academic Cheating,” Social Science Quarterly, 1989) report a 42% rate of cheating, and D.L. McCabe (“Academic Integrity,”, 1999) reports an 80% rate. The gravity of the potential long-term effects of cheating is even more disturbing, as cheating in college is associated with unethical behavior in the workplace (R.A. Lawson, “Is Classroom Cheating Related to Business Students’ Propensity to Cheat in the ‘Real World’?,” Journal of Business Ethics, 2004). In fact, M.L. Smyth and J.R. Davis (“An Examination of Student Cheating in the Two-Year College,” Community College Review, 2003) found that although “Nearly all respondents believe that cheating is ethically wrong (92%), a surprising 45% find cheating to be socially acceptable.”

While some students appeared optimistic about the future of ethics in the accounting curriculum, others expressed a need to tailor ethics to the accounting environment:

  • With such a public awareness about the issue, it seems almost irresponsible to not have a required ethics course for all business students, especially those whose focus is on accounting.
  • I consider ethics as valuable as [the] accounting theories and applications that one learns in an educational institution.
  • Many times the ethical values typically taught in a general course have to be reworked in order to be applicable to accounting.

Rules Versus Concepts

While U.S. accounting standards tend to follow a rules-based approach (i.e., What are we required to do?), International Accounting Standards (IAS) use a concepts-based approach (i.e., What should we be doing?). Statements by leaders of three of the Big Four accounting firms also reflect this concern. For example, William G. Parrett, the CEO of Deloitte & Touche, stated in a 2004 speech at the International Center for Corporate Accountability that the accounting profession has “always strived to ‘follow the rules,’ but in the wake of scandals and loss of investor confidence[,] we obviously must do more to restore public trust.”

The accounting students surveyed voiced similar concerns:

  • How we comply with the rules and principles [and] how we behave morally are intertwined.
  • Good ethical programs in colleges would enable students to distinguish between the ethical and the merely legal.
  • Even if taught, ethics do not force one’s behavior in either direction, they merely act as a guide that can be followed, or as is true in many cases, ignored.

Responsibility of the Profession

The accounting students surveyed tracked the same positions on professional ethics espoused by the profession’s major accrediting body and the leaders of the Big-Four, and evinced in the public’s demand for more integrity in financial reporting. Given the dramatic increase in college cheating and that nearly half of college students agree that cheating is socially acceptable, and the association between college cheating and unethical behavior in the workplace, the authors believe that the arguments against NASBA’s proposal are out of touch with reality. It can be assumed that the ethics taught to accounting students by their families are being eroded by the college experience, and, as a profession, there is a responsibility to reverse this trend. While some students also express a concern about being taught ethics, overall, the students’ opinions clearly reflect a belief that something needs to be done.

Student views enhance the quality of the debate surrounding the proposed requirement for additional ethics courses in accounting in order to sit for the CPA exam. To the extent that the views of students at a New York college are representative of students pursuing an accounting degree, then one must question where the resistance to ethics courses is arising from. Texas’ recent experience with an ethics requirement supports the position that professionals are strong proponents of ethics courses. If both practicing professionals and those desiring to enter the profession advocate additional ethics courses, it is incumbent on those in authority to support and advocate this view. All stakeholders must be more vocal and forceful in making this position known to the regulators who ultimately make the decisions on the requirements to sit for the CPA exam in New York and across the country.

Richard A. Bernardi, PhD, CPA, is a professor at the Gabelli School of Business of Roger Williams University, Bristol, R.I., and David F. Bean, PhD, CPA, is a consultant with BD&C Academic Consultants in New Rochelle, N.Y.




















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