Teaching ethics to accounting majors.

• Author: Monsour, Edward

Accounting professionals have faced increased pressure from regulators and the public in the wake of corporate scandals over the last few years. The sight of chief executive and financial officers parading into courtrooms has raised public awareness and concern about ethical behavior in management and accounting. With the creation of the Sarbanes-Oxley Act of 2002 and Statement on Auditing Standards No. 99, Consideration of Fraud in a Financial Statement Audit, ignoring ethics in accounting education is no longer an option.

Currently, the accounting profession relies on codes of conduct to express its obligations to the public, employers, clients and colleagues. The AICPA Code of Professional Conduct identifies principles that express the basic tenets of ethical and professional conduct. These principles should guide CPAs in the performance of their professional responsibilities and should include, for example, the public interest, integrity, objectivity, independence and due care.

CPA requirements are currently being reviewed and revised. The National Association of State Boards of Accountancy has proposed revisions of Rules 5-1 and 5-2 of the Uniform Accountancy Act that would require a three-semester credit hour course, "Ethics and Professional Responsibilities of CPAs."

Need for Ethics Courses

Despite widespread agreement that ethics should be an integral part of accounting education, implementation has been slow. Several surveys have found little integration of ethics into the accounting curriculum. A recent survey by the American Accounting Association found that only 46% of schools offered a separate course in ethics. The majority of those courses did not provide adequate coverage of ethics, values and appropriate professional conduct; see Mastracchio, "Teaching CPAs About Serving the Public Interest," CPA Journal (January 2005), available at www.nysscpa.org/cpajournal/2005/105/perspectives/p6.htm.

On the bright side, many studies have concluded that ethics education has a positive effect on students. A survey of college sophomores found no significant differences between accounting and other business majors in their willingness to "manipulate earnings"; see Clikeman and Henning, "The Socialization of Undergraduate Accounting Students," 15 Issues in Acct'g Ed. 1 (February 2000). A resurvey of these same students as seniors indicated that accounting majors were less willing to manipulate earnings than were other business majors, suggesting that accounting education promotes fundamental ethical awareness of professional responsibility. Despite evidence that ethics education can be effective, many accounting programs continue to avoid...