Magazine article The CPA Journal

Testing Ethics: A Research Report

Magazine article The CPA Journal

Testing Ethics: A Research Report

Article excerpt

Ethics is a topic of major concern to accounting practitioners, educators, researchers, and regulators. We gave an ethics "test" to 372 accounting students and 53 accounting faculty from 10 schools in the New York/New Jersey area. The test consisted of two ethical dilemma cases taken from a 1991 study of the ethics of business, law, and medical students conducted by D.L. McCabe, J.M. Dukerich, and J.E. Dutton. The first concerns the willingness of an individual to use and disseminate insider information to trade stocks. The second asks CPA candidates--more specifically, candidates who are anxious to start a two-year assignment with VISTA--whether they would accept copies, summaries, or no part of an advance copy of the exam (if, hypothetically, these materials were illegally available). To expand the range of variance in our analysis, four possible responses were provided. Only one of these was ethically "correct"; the other three were all unethical to varying degrees.

To see whether certain characteristics were associated with higher degrees of ethical choice, we collected data on personality type as well as education history, social background, and career aspirations of the respondents. A standardized personality measure developed by J.L. Holland was used as the measure of personality type. Holland provides a spectrum of six different personality codes to which respondents can be assigned. We chose two of these in our research--"Conventional" and "Enterprising"--the two codes most relevant to the accounting profession. Accountants are assumed to be predominantly Conventional in personality; that is, they tend to be conformist, rule-minded, quick to initiate societal norms and rules, and honest. Enterprising is the secondary code assigned to accountants; enterprising individuals tend to be optimistic, self-confident, sociable, ambitious, and energetic. Extensive research has validated Holland's work. Numerous studies show an inter-relationship between his measures and various personality tests.


We were surprised and disappointed to find that only 52% of accounting students chose the only totally ethical response in the insider trading case: that is, to follow the letter of the law and not act on the inside information in any way. Only 39% of the students chose the totally ethical response in the CPA exam case; that is, not to look at an advance copy of the exam. The faculty response showed higher levels of ethical choice; with 87% (in the insider trading case) and 92% (in the CPA exam case) choosing the totally ethical response.

Regarding both ethical dilemmas, female respondents were more ethical than males. In fact, the most significant findings are in the area of gender. This finding points toward the probability of higher ethical standards in the future--since an increased number of females are entering, and rising in, the accounting profession.

Personality, tested by the methodology developed by Holland, also emerged as a significant explanatory variable. Those who are more Conventional are more ethical; those who a more Enterprising are less ethical. …

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