Magazine article The CPA Journal

Teaching CPAs about Serving the Public Interest

Magazine article The CPA Journal

Teaching CPAs about Serving the Public Interest

Article excerpt

A continuing deluge of articles, editorials, and speeches addresses the need of ethics education in the curriculum of accounting majors. One must wonder, however, if teaching ethics at the college level is too late. Have we become immunized against ethical behavior? Are the primary criteria for behavior whether or not one will be better off, and the chances of being caught? As youngsters, do we learn at the dinner table that the family vacation was funded by expense-account padding? And do we hear our parents talking about overstating their tax deductions? Are simple laws, such as speed limits and parking rules, expected to be ignored in our society? Do our baseball heroes cork their bats and use steroids? Do our political leaders question "what the definition of 'is' is"? Are cheating on school exams and plagiarizing papers via the Internet common occurrences? Are examples of child abuse prevalent among those supposedly dedicated to religious service?

If the answer to these questions is yes, then how can we expect those who choose accounting as a career to be exceptions to the rule? Are they a higher caliber of individual than those who choose a religious life? Did the decision-makers at Enron and WorldCom not know that what they were doing was wrong? Did they need a course that would have taught them not to conduct business the way they did? We read that the guards at the Abu Ghraib prison in Iraq were not trained in the Geneva Conventions. Did the guards need a course to learn that the way they treated the prisoners was wrong?

What Can Help?

At best, one can only hope that education can help. Accounting students should be well grounded in ethics; however, society's attitude must also change. Perhaps a sound basic foundation in ethics, which teaches methods of measuring the consequences of decisions in ethical terms, can help.

In taxation, there is a difference between tax evasion and tax avoidance. Surely no one would suggest that each of us should pay taxes by deciding what our fair share should be. So we learn that minimizing our taxes is acceptable as long as we do not violate the law.

Unfortunately, the attitude toward teaching "ethics" in most curricula consists primarily of learning rules. Acting ethically then becomes merely not violating particular rules. An auditing course may go further, listing the AICPA rules of professional conduct, but still say little about how protecting the public interest is a CPA's responsibility. Some legal discussions may occur in a business law course, or a tax course may include some discussion of tax ethics. With the ethical compass that this attitude fosters, one is able to work at WorldCom and rationalize capitalizing line costs to apply them against future revenues. Shoehorning an accounting treatment into a GAAP principle is considerably easier for auditors than asking themselves whether stakeholders are receiving a fair picture of the company: "After all, everyone manages earnings."

The National Association of State Boards of Accountancy (NASBA) responded to the recent scandals by forming a task force to investigate the extent of education in protecting the public interest. The American Accounting Association (AAA) agreed to cosponsor a survey of educators on the issue of ethics education on campus. The following results were obtained:

* 46% of the schools offered a separate course in ethics.

* 68% of those offered the course in the school of business.

* 18% offered the course in the accounting department.

* 56% indicated that the course provided separate coverage for protecting the public interest.

* Where offered, 51% stated it was a requirement for accounting majors.

* Where offered, 45% stated it was a requirement for other business majors.

* 90% indicated that protecting the public interest was covered in the auditing course.

For those survey participants that opted to identify their affiliation, a syllabus of the courses was obtained. …

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