Academic journal article Issues in Accounting Education

A Note on Ethics Educational Interventions in an Undergraduate Auditing Course: Is There an "Enron Effect"?

Academic journal article Issues in Accounting Education

A Note on Ethics Educational Interventions in an Undergraduate Auditing Course: Is There an "Enron Effect"?

Article excerpt

ABSTRACT: In light of recent accounting scandals and the ensuing "crisis in confidence" facing the public accounting profession, there is a new challenge to accounting educators: how to effectively incorporate ethics into accounting courses, and increase the moral reasoning abilities of their students. Providing accounting students with the ability to reason effectively with respect to moral dilemmas may help to minimize future judgment errors in accounting and auditing settings.

This article describes several different educational interventions that were adopted in an undergraduate auditing course. Students' moral reasoning was assessed both at the beginning and the end of the course to determine whether their moral reasoning scores improved based on the interventions. This was done over two semesters: one occurring in 2001 ("pre-Enron"), and one occurring in 2002 ("post-Enron"). Accounting context-specific scores were collected in both semesters (using Thorne's [2000] Accounting Ethical Dilemma Instrument [AEDI]), and general moral reasoning scores (Rest's [1979] Defining Issues Test [DIT]) were also collected in the post-Enron semester. Results indicate increases in AEDI scores, which were robust over both semesters. There was no corresponding increase in DIT scores, which is consistent with previous research; however, students' DIT scores were not significantly different than AEDI scores, which is contrary to the findings of Thorne (2001). In addition, the educational interventions appear to be equally effective in both the pre-Enron and post-Enron semesters, indicating the absence of an "Enron effect."



Since the Enron bankruptcy in late 2001, and the subsequent demise of Arthur Andersen in 2002, the public accounting profession has been faced with a "crisis in confidence" and questions regarding the profession's credibility (Kahn 2002). In addition, there has been recent press coverage regarding whether ethics education has been adequately emphasized in business schools, and in accounting programs in particular (e.g., Madison 2002; Stape 2002; Lim 2002); with the general conclusion that business and accounting curricula have not been substantially revamped to cover ethics in response to recent accounting scandals.

Among the arguments against incorporating more ethics into the curriculum is that many professors are hard pressed to find the time to teach the technical content they normally cover, let alone incorporate ethics into their courses (Stape 2002; Lim 2002). (1) Others argue that they already incorporated an appropriate level of ethics instruction into their courses prior to the Enron scandal (Stape 2002). (2) Still others argue that ethics cannot be taught in the classroom. For example, some claim that an individual's virtue derives from his or her upbringing, and therefore college courses have very little impact on individual responses to ethical issues (Stape 2002). Others believe that ethical dilemmas must be dealt with on the job as they are encountered, rather than in a classroom setting (Petrecca 2002). Ironically, a study of accounting firms' attitudes toward ethical training found that the vast majority of firms "rely primarily on colleges to cover the ethics and ethical behavior expected in the profession" (Warth 2000, 69), rather than provide ethics training on the job.

The purpose of this article is to examine the effectiveness of ethics educational interventions in promoting student moral development in a one-semester auditing course. We hope to accomplish two objectives. The first is to provide accounting educators with ideas for incorporating ethics educational interventions into undergraduate auditing courses. The second objective is to provide additional insights into previous research on ethical interventions in a one-semester course, which have provided mixed results.

In addition to examining the question of whether particular ethics interventions are effective, we also address whether recent events occurring in public accounting have an impact on ethics education. …

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