A code of ethical professional conduct is the cornerstone of any profession, but it doesn’t make for compelling reading for students, whether it’s assigned for homework or in the classroom. Historically, accounting ethics education has focused on preparing students for licensure exams and providing familiarity with rules, laws, and regulations. In brief, accounting ethics are guiding principles and moral values that are an integral part of business and may cause serious consequences for individuals and organizations if not followed.
What’s the right way to embed these principles in students’ and professionals’ minds? How can we develop their skills to be able to cope, address, and respond to unethical behaviors with a proactive approach?
There are alternatives to a traditional theory-laden lecture-based approach that provide more robust instructional pedagogical solutions and tools for teaching ethics to accounting students and professionals to help them deal with real-life challenges that they’re likely to face in the workplace.
GOING BEYOND CODES OF ETHICS
A primary challenge for professors tasked with teaching accounting ethics is navigating the continuum between cookie-cutter solutions to problems and the complexities and abstractions found in ethical theory.
The theory of ethics provides a necessary foundation for understanding the basic concepts and building blocks of ethical reasoning. This stage of an accounting ethics course exposes students to the primary ethical frameworks of virtue ethics, deontological ethics, and consequentialism, among others. If too much time is devoted to theory, however, students may lose interest and likely won’t develop the ethical decision-making skills necessary to thrive in the accounting and finance profession, hence the need for a case-based pedagogical approach for conducting ethics courses.
BRING THEORY TO LIFE
After different theoretical ethical lenses are presented and discussed, accounting cases can be interwoven into the various ethical decision-making models to ground the theory in actual or hypothetical concrete examples. Exposing students to real-world cases reinforces ethical decision-making processes. Detailed cases illustrating ethical conundrums often demonstrate how regulations and laws were altered in response to fraud or other misconduct.
Students respond better when they’re engaged in the research of current cases. This is especially true if the cases aren’t only more recent, but more local (i.e., having occurred in the same industry and state, region, or country). It’s challenging to spot unethical conduct when students lack actual work experience, which is why case-prompted debates on various potential courses of action can prepare them to better identify unethical conduct, how to notice red flags, and how to approach ethical dilemmas effectively.
When students are tasked with finding cases, evaluating them based on an ethical framework, and using a specified ethical decision model, their understanding of ethical dilemmas becomes more sensitized and nuanced. Although cases in textbooks are typically thorough and often provide excellent examples, they lack recency. For example, most textbooks dedicate examples to Crazy Eddie and Enron, which are excellent examples of fraud, but they're distant events that occurred before most current students were born.
I showed my students a case involving a local mayor who had abused her position to embezzle less than $1,000. Then they went through the published information and applied the principles and standards of the IMA Statement of Ethical Professional Practice to the case and examined the issues. It proved to be an interesting case because there was some gray area. By examining real-world cases, students’ ethical sensitivity was heightened. The students identified standards violations in the areas of competence and integrity. After identifying the issues, they articulated various ethical approaches to resolution.It’s also beneficial to offer discussions on relevant current events that involve unethical conduct. Finding current cases that map to a given week’s primary topic requires additional effort but aids the students in honing their ethical radar and judgment. Student engagement is essential to bridge the gap from learning about ethics to becoming an ethical practitioner that has well established ethical decision-making skills.
BENEFITS OF ETHICS EDUCATION
Accounting educators sometimes focus on ensuring that students have the technical competencies necessary to thrive in the profession without instilling the professionalism requisite to succeed. There’s significantly more to mastering accounting ethics than being able to pass a state licensure ethics examination. It’s important for us to remind students that many of the accounting fraud cases they’ve read about often involve someone who had passed one or more licensure examinations and may have even graduated near the top of their class.
Teaching ethics to accounting students is as important as teaching T-accounts, consolidations, and tax accounting. Ethics lend your financial reports credibility, enhance your reputation, and attract more investors. Multiple approaches should be employed to sharpen students’ understanding of ethics and the biases or blind spots that may influence their own decision making. The students of today become the professionals of tomorrow. Their performance reflects on the institutions that trained them, the companies that employ them, and the associations that certify them.
Besides accounting ethics education in academic curricula, experiential learning in a workplace with accounting and finance professionals who perform ethically would further develop students’ ethical skills. For the good of the profession, it’s necessary that we reinforce these lessons throughout students’ careers—while they’re in school, with ethics education; through employers’ strong ethical commitment; and through effective continuing professional education and training in ethics.
August 2022
