Management accountants’ ethics training is insufficient if the only takeaway is a list of rules to follow when making tough judgment calls. When professionals commit misconduct or an ethics violation, such missteps can often be attributed to judgment traps and innate biases—i.e., ethical blind spots—that affect professionals’ decision making in unexpected ways. Bias is a form of prejudice that isn’t always obvious. In order to make less-biased decisions, you must look at yourself in the mirror and identify these judgment traps and biases, some of which may be unconscious.

“Finance professionals and accountants in business should be applying professional skepticism,” said Diane Jules, deputy director of the International Ethics Standards Board for Accountants (IESBA). “They need to be aware of their own biases.”

A major challenge is the typical rush to attain objectives or resolve issues without considering ethical implications, according to Steve Goldberg, accounting professor at Grand Valley State University’s Seidman College of Business.

“Decision makers hurry to make a decision to meet deadlines or try to be helpful but don’t think through the entire problem,” Goldberg said. “An experienced manager thinks he knows the right thing to do before going through a careful judgment process and before gathering all relevant information.”

Cognitive traps and biases, which can negatively influence professional judgment, tend to occur for three reasons: groupthink, a rush to judgment, and trigger events, according to Steven Mintz, a professor emeritus of accounting at California Polytechnic State University.

Groupthink occurs when a decision is influenced by the strong expectations of leaders or peers, causing professionals to subjugate their own beliefs and thought process.

“This may be done to avoid conflicts or save time when, for example, there’s strong doubt that an account receivable will be fully collectible, but the group doesn’t want to record a write-down because of its negative effect on earnings,” Mintz said. “The professional feels trapped by the group’s prevailing wisdom and decides to ‘go along to get along.’

“Sometimes the ethical issues aren’t clearly thought through and a rush to solve a problem leads to improper reporting.”

Judgment triggers occur because accounting and finance professionals evaluate financial information improperly or fail to perform important steps—for example, accepting easily accessible evidence or the data they have rather than analyzing what’s needed to verify a transaction or financial statement amount.

“Sometimes accountants are too quick to accept the way things have been done in the past,” Mintz noted. “In a rush, they may look at previous years’ numbers and then decide what to do rather than make an independent analysis.”


We have illusions about how ethical we really are, according to Ann Tenbrunsel, the David E. Gallo Professor of Business Ethics in the Mendoza College of Business at the University of Notre Dame. We tend to remember all the good things we do, but we don’t remember the bad things we do.

“We’re unaware that we fall prey to ethical fading, a process by which we don’t see that the decision we’re about to make has ethical implications,” Tenbrunsel said. “Compartmentalization—assuming ethics is the responsibility of someone else such as the compliance officer—and language euphemisms that hide the unethical behavior contribute to ethical fading.”

Many accountants and CFOs are blind to the behavior of others, particularly the employees they like and are loyal to, thus allowing unethical behavior to perpetuate. In addition, organizational incentive systems—particularly reward systems with goals that are difficult to reach—often push people to behave unethically.

“Beware the slippery slope of unethical behavior,” Tenbrunsel said. “Small unethical acts beget larger unethical acts. If we behave unethically, we erroneously believe that others would do the same. This is particularly true the more tempted you are to behave unethically.”


Most professionals have an internal ethical compass that tells them when something isn’t right, according to Patricia Harned, CEO of the Ethics & Compliance Initiative (ECI).

“It’s a ‘spidey sense’—when they’re asked, tempted, or pressured to do something wrong, they can talk themselves out of that,” Harned said. “Others make rationalizations all the time, saying ‘I had no other choice; everyone else is doing it; nobody’s really gonna get hurt; it isn’t that big of a deal; it’s just this one time.’ These are all very common ways of thinking, but most of the time if you’re thinking that way, you’re talking yourself out of what you know is the right thing to do.”


Eva Tsahuridu, a professor and industry fellow in the School of Accounting at RMIT University, said accountants’ ethical judgment traps include:

  • Conformity bias. Everyone else is doing it; these are the rules of the game. It’s particularly potent in teams.
  • Framing. How an issue is described affects what we decide to do.
  • Selective perception. What we see is colored by what we know, expect, or want to see and our vested interests.
  • Confirmation bias. We tend to look for and pay attention to information that supports our beliefs and disregard information that contradicts them. It affects our search for information, our interpretation of that information, and our recall.
  • Overconfidence. It interferes with the practice of serious reflection and consideration of ethical issues. We’re prone to justifying and rationalizing self-interested behavior.
  • Greed. When we’re motivated by a monetary incentive, we’re more likely to act unethically, failing to consider justice, fairness, and honesty.

“The accounting profession must address the deleterious influence of conflicts of interest,” Tsahuridu said.

The time is now to do an honest self-assessment to pinpoint your own biases, avoid common judgment traps, and ensure that you conduct yourself ethically.

See also: “When Best Intentions Aren’t Enough,” Strategic Finance, April 2019; “Everyday Ethics: Tougher Than You Think,” Strategic Finance, June 2015.


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, 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.