Ethics is one of the most—if not the most—important topics for accounting and finance students to learn. Professors must emphasize this topic and continue to stress it. Everyone acknowledges that ethics education is a vital part of the curriculum for students, but graduation shouldn’t be the end of learning about ethical decision making. Ethics education should never stop but rather continue throughout accounting and finance professionals’ careers. Companies that offer ethics training to encourage employees to make ethical decisions stand to benefit. Just as individuals should take the initiative to seek out such training, senior management should also make a point to require it for their personnel. That represents a cost to the company, but it’s one that pales in comparison to the potential benefits that a well-designed ethics training program can reap.
INTERACTIVE LESSONS
Some instructional techniques that accounting ethics professors have found to be effective in the classroom can also enhance ethics training for professionals. “The topic can be woven into every accounting class,” says Maria Sanchez, professor of accounting and coordinator of the online master of accounting program at Rider University in New Jersey. “Students should know that they’re likely to face ethical dilemmas in their careers, and they need to be prepared.”
How can you keep students and professionals engaged in ethics instruction? Simply hearing a lecture or reading a textbook or a code of professional conduct and then answering questions about it can be dry. A more effective approach is an interactive workshop that requires participants to step into the shoes of professionals experiencing ethical quandaries, prepare scripts, and role-play to resolve dilemmas.
“It’s one thing to read about a case in a textbook, but to have to consider the feelings and pressures that actual people went through in a fraud case can really make the material come alive,” says Sanchez. “I like to have the students consider alternative courses of action—what could have happened if various participants made alternative choices.”
Ethics training is improving, but there’s room to do better, says Eva Tsahuridu, associate professor and industry fellow in the school of accounting at RMIT University in Australia, which developed an accounting ethics simulator game to teach the International Code of Ethics for Professional Accountants from the International Ethics Standards Board for Accountants (IESBA) in a fun, interactive way.
“It’s a serious game that allows learners to immerse themselves in a real work context, be subjected to explicit and implicit pressure, make decisions, and importantly be able to reflect on their own decisions and behavior,” Tsahuridu says. In most cases of work-related misconduct, it isn’t that people don’t know what the right thing to do is, but rather that they don’t do what they know is right.
“Ethics training needs to address our ethical overconfidence, the false belief that we’re ethical, objective people who don’t have to worry about ethics, because of course we’ll do the right thing and we won’t be influenced,” Tsahuridu says. “This overconfidence that we all suffer from interferes with the need to seriously consider pressure and conflicts of interest. Insights from behavioral ethics shed light on our inherent limitations and inform our susceptibilities, but also our organizational policies, procedures, and practices.”
A COMPREHENSIVE APPROACH
Accountants need a familiarity with various approaches to resolving ethical dilemmas, which ethics training provides. Courses should focus on decision making when faced with common ethical issues encountered in the finance function; framing ethical issues in a way that influences the choices professionals make and other behavioral considerations; and limitations or hurdles related to both unconscious and motivated ethical blind spots, when decision makers don’t perceive others’ unethical actions when noticing is against their own best interests. An individual is more likely to do bad things if the information isn’t presented objectively. Philosophical models include traditional moral-reasoning methods such as utilitarianism, deontology (based on the precept that the ends don’t justify the means), and virtue ethics, notes Steven Mintz, professor emeritus of accounting at California Polytechnic State University.
Ethical blind spots are the gaps between one’s intended and actual ethical behavior. This can be caused by motivated blindness, self-deception whereby individuals believe they can behave in a self-interested way and still hold the conviction they’re ethical people. But how can that be, Mintz asks, since considering all stakeholders’ interests is an integral part of ethical decision making?
Behavioral issues interact with organizational pressures to create barriers to ethical decision making that can lead to unethical conduct. Mintz recommends requiring a continuing education course with components such as applied accounting ethics, ethical reasoning frameworks, values, professional skepticism, philosophy of ethics, business ethics, corporate governance, organizational ethics, behavioral ethics, tax ethics, and fraud.
Employees should learn techniques to deal with various challenging situations, including when the boss tells a subordinate to do something that’s unethical. What should that subordinate do? To whom can the employee turn for help? What might she or he say to change the way a superior sees the ethical issue?
“Most people don’t think about how they would act if they encounter a supervisor who pressures them to deviate from ethical norms,” Mintz says. “In the workplace, internal auditors and accountants are the first line of defense against financial fraud and need to understand how to work within the system to prevent manipulation of the financial results.”
Instructional methods in the workplace would be enhanced if ethics programs were developed with case studies that have a real-life aspect to them and engage employees in discussion of a range of ethical issues.
Companies that invest in comprehensive ethics training for all employees will likely earn dividends in the form of improvements to the organizational culture, better ethical decision making from personnel, and fewer costly breaches of ethical standards.
IMA ETHICS HELPLINE
For clarification of how the IMA Statement of Ethical Professional Practice applies to your ethical dilemma, contact the IMA Ethics Helpline.
In the U.S. or Canada, dial (800) 245-1383. In other countries, dial the AT&T USA Direct Access Number from www.usa.att.com/traveler/index.jsp, then the above number.
The IMA Helpline is designed to provide clarification of provisions in the IMA Statement of Ethical Professional Practice, which contains suggestions on how to resolve ethical conflicts. The helpline cannot be considered a hotline to report specific suspected ethical violations.
March 2020
