This study examines values and value types as well as scores in levels of moral reasoning for␣students enrolled in a business program. These two factors are measured using the Schwartz Personal Values␣Questionnaire and the Defining Issues Test 2. No statistically significant differences in levels of moral␣reasoning, rankings of values, and value types could be attributed to gender. However, eight significant correlations between value types and levels of moral reasoning provide evidence that a systematic relationship exists. The relationships are not only (...) internally consistent but also consistent with the model of values based on motivational goals (Schwartz S. H. and K. Boenke: 2004, Journal of Research in Personality, 38 230–255). (shrink)

There are many ways that accountants and managers can influence the reported accounting results of their organizational units. When such influence is directed at changing the amount of reported earnings, it is known as earnings management. The purpose of this paper is to present the results of surveys of undergraduate students, MBA students, and practicing accountants concerning their attitudes on the ethical acceptability of earnings management. Analysis of the survey results reveals how the attitudes of the three groups differ and (...) what variables are associated with these differences. Based on the analysis, the authors suggest changes in accounting education curriculum and ethics awareness programs in business which might increase students'' and practitioners'' sensitivity to the ethical ramifications of earnings management. (shrink)

Recent, well-publicized accounting scandals have shown that the penalties outsiders impose on those found culpable of earnings management can be severe. However, less is known about how colleagues within internal labor markets respond when they believe fellow managers have managed earnings. Designers of responsibility accounting systems need to understand the reputational costs managers impose on one another within internal labor markets. In an experimental study, 159 evening MBA students were asked to assume the role of a manager in a company (...) and respond to a scenario in which another manager (the target manager) has the opportunity to engage in earnings management. Participants provided causal attributions, assessed the morality of the target manager, and indicated whether they would change their judgments about the target manager's reputation. The study manipulated three between-subjects factors: (1) whether the target manager chose to engage in earnings management, (2) whether the company's budgetary control system was rigid or flexible, and (3) whether the target manager's work history was average or above average. We found that causal attributions are affected more by the budgetary systems when the target did not manage earnings than when the manager did. We also found that morality judgments were significantly associated with the target manager's behavior, but not with the budgetary system. In addition, participants' judgments about the target manager's reputation were more strongly associated with morality judgments than with causal attributions. We discuss implications of the role of reputation in management control systems design. (shrink)

This study investigates the differences in individuals'' ethical decision making between Canadian university business students and accounting professionals. We examine the differences in three measures known to be important in the ethical decision-making process: ethical awareness, ethical orientation, and intention to perform questionable acts. We tested for differences in these three measures in eight different questionable actions among three groups: students starting business studies, those in their final year of university, and professional accountants.The measures of awareness capture the extent to (...) which respondents felt that a particular action was unethical according to each of several ethical criteria. We found few differences between the two student groups on these measures, suggesting that their education had minimal effect on raising their awareness of the ethical issues in the vignettes. Indeed, overall, the graduating student''s scores were marginally lower than those of the entry-level students. However, the professionals viewed some actions as significantly less ethical than did the graduating students. (shrink)

This article explores links between the modern theory of rational choice and ethics. Ethics allows us to answer an unsolved question in modern decision theory: the structuring problem in decisions. Such a problem cannot be solved coming from the principle of expected utility. This principle can solve the problem of ‚choosing’ among given alternatives, but does not establish which alternatives should be taken into account in decision. In order to understand the structuring problem, the act of ‚choosing’ has to be (...) completed with three human acts: operating, predicting and evaluating. At the same time, the subjective criteria of rational choice – probability and utility – have to be completed with three objective criteria: efficiency, truth and goodness. Utility is a subjective value of an alternative considered in relation to another. Efficiency, truth and goodness are objective qualities of the joint alternatives in relation to the reality: the real operating possibilities of the agent, the real possibilities of his environment and the true good produced. So, the rule that guarantees a decision to be optimal would be: “do that which most certainly maximises our preferences, according to real operative resources, true knowledge and the right will”. However, this rule cannot be applied without the development of virtues, which could be seen as the main moral competences in decision-making. (shrink)

Earnings management behavior is a concern of standard-setters, regulators and the accounting profession. This study examines the ethics of this practice using a national sample of 763 accounting practitioners, faculty and students. Possible determinants of the ethics of this practice such as perceived role of ethics and social responsibility, and personal moral philosophies (i.e. idealism and relativism) are explored. Results indicate a positive relationship between social responsibility, focus on long-term gains, idealism, and the ethical perception of earnings management and negative (...) relationship between focus on short-term gains, relativism and the ethical perception of this practice. Implications for the accounting profession as it deals with the issue of earnings management are discussed. (shrink)

Many people believe in the intention principle, according to which an agent’s intention in performing an act can sometimes make an act that would otherwise have been permissible impermissible, other things being equal. Judith Jarvis Thomson, Frances Kamm and Thomas Scanlon have offered cases that seem to show that it can be permissible for an agent to act even when the agent has bad intentions. If valid, these cases would seem to cast doubt on the intention principle. In this paper, (...) I point out that these cases have confounding factors that have received little attention in the literature. I argue that these confounding factors undermine the putative force of these cases against the intention principle. Indeed, when cases without these confounding factors are considered, it becomes clear, so I argue, that intentions can be relevant for the permissibility of an act. (shrink)

In this paper, we develop a typology of auditors’ virtues through in-depth interviews with nine exemplars of the audit community.We compare this typology with prescribed auditors’ virtues as represented in the applicable Code of Professional Conduct. Ourcomparison shows that the Code places a primary emphasis on mandatory virtues including the virtues of “independent,” “objective,”and “principled.” While the non-mandatory virtues, which involve “going beyond the minimum” and “putting the public interest foremost,” were identified by our exemplars as essential to the auditor’s (...) role, they received little or no emphasis in the Rules of Professional Conduct. We find this particularly alarming, given that the exemplars interviewed for this study viewed these virtues are essential to the auditors’ role. If the audit profession wishes to uphold public confidence by encouraging the possession of non-mandatory auditors’ virtues, our research suggests that non-mandatory auditors’ virtues should be explicitly described and included in rules of professional conduct. (shrink)