A New Approach to Teaching Ethical Decision Making to Accounting Students

By Mintz, Steven | The CPA Journal, September 2019 | Go to article overview

A New Approach to Teaching Ethical Decision Making to Accounting Students


Mintz, Steven, The CPA Journal


Accounting educators typically use an ethical decision-making model to teach ethics to accounting students. These models provide a systematic way to think through ethical issues, identify alternative courses of action, evaluate the ethics of each alternative, and decide what to do.

Traditionally, the decision-making models used to teach ethics to accounting students have focused on applying philosophical reasoning methods to the analysis of what should be done. These models tend to downplay or ignore the importance of organizational culture in the decision-making process, including internal policies and practices, the code of ethics, and individuals in the organization who might help resolve the conflict.

Given the added focus on organizational ethics since passage of the SarbanesOxley Act of 2002 (SOX) and the profession's recognition of the importance of the control environment, accounting educators should look for new ways to incorporate organizational factors to make the ethics curriculum more relevant. Moreover, the AICPA Code of Professional Conduct now addresses ethical conflicts and describes the process to resolve them, including steps internal to an organization.

Ethical conflicts are specifically recognized in the AICPA code (section 1.000.020) as potential obstacles to following an appropriate course of action due to internal or external pressures and conflicts in applying relevant professional standards or legal standards. The following process is outlined to deal with ethical conflicts: 1) consider relevant facts and circumstances, including applicable rules, laws or regulations; 2) identify the ethical issues involved; and 3) evaluate established internal procedures. CPAs are also told to consider consulting with appropriate persons within their firm or the organization that employs them before pursuing a course of action.

It is time for accounting educators to rethink the scope of decision-making models used to teach accounting ethics. If ethical issues that arise in the context of organizational culture are not dealt with properly, then it is less likely ethical conflicts will be resolved. Consideration of the internal systems within organizations is missing from traditional decisionmaking models and should be given a more prominent role.

Ethical Decision-Making Models

An ethical decision-making model first developed by Bill May at the University of Southern California and included in his book Ethics in the Accounting Curriculum: Cases & Readings (American Accounting Association, 1990) served as a resource for the "Eight-Step Method of Ethical Decision Making" developed by Harold Langenderfer and Joanne Rockness ("Integrating Ethics into the Accounting Curriculum: Issues, Problems, and Solutions," Issues in Accounting Education, March 1989, http://bit.ly/2Z4HJsR). This model is summarized in Exhibit 1.

One shortcoming of this model is that it introduces an organizational perspective at the end, almost as an afterthought, and no guidance is given as to what should be included in the organizational analysis, other than to seek out a trusted person. Discussing an ethical matter with a trusted advisor just before decision making limits its usefulness. Imagine, for example, that an organization pressures an accountant to overlook financial wrongdoing. It seems logical to find out what can and cannot be done right away and determine the key individuals in the organization to ensure that organizational culture is adequately considered in crafting a solution to the ethical problem.

Linda Thorne took a different approach in developing an ethical decision-making model. Thorne's model relies on characteristics of ethical behavior to decide on a course of action, giving the model a distinctively "virtue ethics" feel to it. Her model integrates James Rest's Four-Component Model of Moral Behavior with the foundation of virtue ethics theory (James R. Rest, "Morality," Handbook of Child Psychology: Cognitive Development, vol. …

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