This research builds on previous investigations seeking to understand how individuals reason about moral problems. Our research includes a preliminary investigation about Millennials and a cross‐generational analysis using secondary research data to understand this emerging generation's moral reasoning and assess trends in moral reasoning over time. This study addresses content‐bias in moral reasoning by using a new instrument with business‐based dilemmas, the Moral Recognition Interview, based on the well‐established moral reasoning framework of Lawrence Kohlberg. Results show that the Millennials in (...) this study exhibit differences in moral reasoning based on gender, intelligence, work experience, and academic major, however not necessarily in an expected manner. Differences in moral reasoning were found when the context or “story pull” of the ethical dilemmas presented is considered. In addition, a comparison to other studies shows that business student Millennials tend to reason at lower levels of cognitive moral reasoning than non‐business college students, as well as college students in the 1960s–1970s (Baby Boomers) and in the 1980s–1990s (Generation Xers). (shrink)

Most business ethics scholars interested in understanding individual moral cognition or reasoning rely on the Defining Issues Test. They typically report that managers and business students exhibit a relatively high percentage of principled moral reasoning when resolving ethical dilemmas. This article applies neurocognitive processes and Bloom’s Taxonomy of Educational Objectives, and its more recent revision, as theoretical foundations to explore whether differences emerge when using a recognition of learning task, such as the DIT or similar instruments, versus a formulation of (...) knowledge task, such as the Moral Judgment Interview or similar instruments, to assess individual moral reasoning. The data show that significantly different levels of moral reasoning are detected when using a recognition-based versus formulation-based moral reasoning instrument. As expected, the recognition-based approach reports an inflated, higher moral reasoning score for subjects compared with using a formulation-based instrument. Implications of these results for understanding an individual’s moral reasoning are discussed. (shrink)

The introduction and validation of a new instrument, The Moral Reasoning Inventory, designed to measure an individuals' moral reasoning (MR) in response to two moral dilemmas within a business setting is the subject of this article. The instrument consists of two moral dilemma scenarios with eight MR statements. Two measurement scales were used for analyzing patterns of individual responses: the strength of belief in the reasons and the importance of those reasons for resolving the dilemma. Managers enrolled in a part-time (...) MBA program were administered the new instrument. Data analysis clearly supported the effectiveness of the instrument to differentiate patterns of consistency in MR within decision groups. (shrink)

This paper compares the moral reasoning of 363 auditors from Canada and the United States. We investigate whether national institutional context is associated with differences in auditors'' moral reasoning by examining three components of auditors'' moral decision process: (1) moral development, which describes cognitive moral capability, (2) prescriptive reasoning of how a realistic accounting dilemma ought to be resolved and, (3) deliberative reasoning of how a realistic accounting dilemma will be resolved. Not surprisingly, it appears that institutional factors are more (...) likely to be associated with auditors'' deliberative reasoning than their prescriptive reasoning in both countries. Additionally, our findings suggest that the national institutional context found in the United States, which has a tougher regulatory and more litigious environment, appears to better encourage auditors to deliberate according to what they perceive is "the ideal" judgment as compared to the Canadian context. We then discuss the implications of these findings for regulators and for ethics research. (shrink)

This study introduces Moscovici’s (1976, 1985) model of social influence to the accounting research domain, and uses an experimentto assess whether his theory explains how different types of discussion affects consensus in auditors’ ethical reasoning. Moscovici’s theory proposes three modalities of influence to describe how consensus is achieved following discussion: conformity, innovation, and normalization. Conformity describes the situation where individuals in the minority (e.g., auditors that do not accept the dominant view) accede to the majority (e.g., auditors that hold the (...) dominant view) as a result of group discussion. Innovation describes the situation where individuals in the majority accede to the minority. Normalization describes the situation where there is reciprocal influence.We find that conformity occurs when auditors are asked to prescriptively discuss what ideally “should” be the resolution to an ethicaldilemma. Normalization occurs when auditors are asked to deliberatively discuss what realistically would be the resolution to an ethical dilemma. The results of this study suggest that prescriptive discussion of an ethical dilemma encourages auditor groups to strive to find the best response to a moral dilemma if it is represented by the majority view. In contrast, deliberative discussion of an ethical dilemma may encourage the elimination of multiple viewpoints. The results of this study have important implications for understanding the social influence process that affects auditors’ ethical reasoning. (shrink)

This study introduces Moscovici’s (1976, 1985) model of social influence to the accounting research domain, and uses an experimentto assess whether his theory explains how different types of discussion affects consensus in auditors’ ethical reasoning. Moscovici’s theory proposes three modalities of influence to describe how consensus is achieved following discussion: conformity, innovation, and normalization. Conformity describes the situation where individuals in the minority (e.g., auditors that do not accept the dominant view) accede to the majority (e.g., auditors that hold the (...) dominant view) as a result of group discussion. Innovation describes the situation where individuals in the majority accede to the minority. Normalization describes the situation where there is reciprocal influence.We find that conformity occurs when auditors are asked to prescriptively discuss what ideally “should” be the resolution to an ethicaldilemma. Normalization occurs when auditors are asked to deliberatively discuss what realistically would be the resolution to an ethical dilemma. The results of this study suggest that prescriptive discussion of an ethical dilemma encourages auditor groups to strive to find the best response to a moral dilemma if it is represented by the majority view. In contrast, deliberative discussion of an ethical dilemma may encourage the elimination of multiple viewpoints. The results of this study have important implications for understanding the social influence process that affects auditors’ ethical reasoning. (shrink)

Guanxi as one of the key factors leading to business success in China (PRC) has ironically been synonymous with bribery. This raises some serious questions: should Western foreign firms do business in China? How should they do business with Chinese firms? This study investigated the relationship between guanxi orientation and cognitive moral development in an attempt to determine whether the level of guanxi orientation of Chinese business people affects their ethical reasoning. Based on a classification of Chinese enterprises (Nee, 1992), (...) it was found that Chinese enterprises rely on guanxi for business to different extents. However, their levels of cognitive moral development are not significantly different, suggesting that guanxi orientation has very little to do with ethical reasoning (as captured through an established measure of cognitive moral development). Furthermore, time in profession was found to positively affect guanxi orientation; however, age failed to predict guanxi orientation and education turned out to be a negative predictor of guanxi orientation. (shrink)

This paper examines fraudulent financial reporting within the context of Jones' (1991) ethical decision making model. It was hypothesized that quantitative materiality would influence judgments of the ethical acceptability of fraud, and that both materiality and financial risk would affect the likelihood of committing fraud. The results, based on a study of CPAs employed as senior executives, provide partial support for the hypotheses. Contrary to expectations, quantitative materiality did not influence ethical judgments. ANCOVA results based on participants' estimates of the (...) likelihood that a "typical CPA" would manipulate reported results indicated that both materiality and risk significantly influenced the likelihood of fraud, but that the perceived morality of the action did not. In contrast, results based on participants' self-reported behavior indicated that materiality and the perceived morality of the action would influence the likelihood of fraud, but that financial risk would not. Regardless of the measure used for the likelihood of fraud, the results indicate that financial executives continue to be influenced by quantitative materiality when misstatements are clearly material on qualitative grounds. (shrink)

This study represents an improvement in the ethics scales inventory published in a 1988 Journal of Business Ethics article. The article presents the distillation and validation process whereby the original 33 item inventory was reduced to eight items. These eight items comprise the following ethical dimensions: a moral equity dimension, a relativism dimension, and a contractualism dimension. The multidimensional ethics scale demonstrates significant predictive ability.

This comparative field study evaluated the moral reasoning used by U.S. and Belizean business students in resolving business-related moral dilemmas. The Belizeans, citizens of a less-developed country with Western heritage and a values-based education system, revolved the dilemmas using higher stages of moral judgment than did the U.S. business students.

Investigations into ethical judgments generally seem fuzzy as to the relevant research domain. We first attempted to clarify the construct and determine domain parameters. This attempt required addressing difficulties associated with pinpointing relevant literature, most notably the varied nomenclature used to refer to ethical judgments (individual evaluations of actions’ ethicality). Given this variation in construct nomenclature and the difficulties it presented in identifying pertinent focal studies, we elected to focus on research that cited papers featuring prominent and often-used measures of (...) ethical judgments (primarily, but not exclusively, the Multidimensional Ethics Scale). Our review of these studies indicated a preponderance of inferences and conclusions unwarranted by empirical evidence (likely attributable at least partly to inconsistent nomenclature). Moreover, ethical judgments related consistently to few respondent characteristics or any other variables, emergent relationships may not always be especially meaningful, and much research seems inclined to repetition of already verified findings. Although we concluded that knowledge about ethical judgments seems not to have advanced appreciably after decades of investigation, we suggested a possible path forward that focuses on the content of what is actually being judged as reflected in the myriad of vignettes used in the literature to elicit judgments. (shrink)

Knowledge about ethical judgments has not advanced appreciably after decades of research. Such research, however, has rarely addressed the possible importance of the content of such judgments; that is, the material appearing in the brief vignettes or scenarios on which survey respondents base their evaluations. Indeed, this content has seemed an afterthought in most investigations. This paper closely examined the vast array of vignettes that have appeared in relevant research in an effort to reduce this proliferation to a more concise (...) set of overarching vignette themes. Six generic themes emerged from this process, labeled here as Dilemma, Classic, Conspiracy, Sophie’s Choice, Runaway Trolley, and Whistle Blowing. Each of these themes is characterized by a unique combination of four key factors that include the extent of protagonist personal benefit from relevant vignette activities and victim salience in vignette descriptions. Theme identification enabled inherent ambiguities in vignettes that threaten construct validity to come into sharp focus, provided clues regarding appropriate vignette construction, and may help to make sense of patterns of empirical findings that heretofore have seemed difficult to explain. (shrink)

We investigated associations between moral reasoning and epistemological beliefs in an accounting context using the sample of 140 senior accounting students from a public university in Midwestern U. S. We found no significant correlations between accounting students' principled reasoning about Thome's ethical dilemmas and their beliefs about knowledge measured by administering Schommer epistemological questionnaire. We conducted post-hoc power analysis and present the evidence that the lack of associations should not be attributed to the lack of power. Overall, our results suggest (...) that reflective thinking and moral reasoning represent separate dimensions of cognitive process which develop at a different pace. Thus, a stand-alone course of ethics in accounting education is warranted since higher moral reasoning does not automatically follow from extended technical education and improved critical thinking skills. (shrink)

This research explores the relationship of variant degrees of a country’s economic freedom to the ethical profiles of millennial business students, specifically an individual’s personal value orientation and post-conventional reasoning. Grounded in Social Identity, Personal Values, and Cognitive Moral Development theories, we construct an ethical profile to compare responses provided by millennial business students from eight countries. Our results suggest that a country’s degree of economic freedom has some association with an individual’s ethical profile, yet we also discuss other national (...) influences on an ethical profile. These results and their implications are discussed in the article. (shrink)

Moral reasoning typically relates unexpectedly weakly with both Machiavellianism and authoritarianism. Although researchers often explain this by pointing to apparent shortcomings in both the construct and the measure of moral reasoning, such explanations are questionable given the many instances of support for hypotheses involving moral reasoning using the same construct and measure. As these latter cannot only sometimes be flawed, we explored the possible influence of moral reasoning index choice on observed results by using multiple indices available in the Defining (...) Issues Test. In a sample of 201 employed persons surveyed in 1998, with results reported for the first time, advanced moral reasoners tended to be neither Machiavellian nor authoritarian. However, the specific moral reasoning index employed was critical to detecting these hypothesized inverse relationships. Specifically, we proposed that currently unavailable D scores would be the relevant index for examining inverse relationships with Machiavellianism and that P scores would be most appropriate in the context of inverse relationships with authoritarianism, particularly among persons inclined to utilize their characteristic moral reasoning. We extrapolate the conceptual logic underpinning such relationships, and suggest that appropriate index choice flows from this logic and is essential to hypothesis testing across a broad array of constructs. Future research could adopt this logic to examine relationships involving constructs with implications similar to those found in Machiavellianism and authoritarianism. (shrink)

Recent allegations of unethical decision-making by leaders in prominent business organizations have jeopardized the world's confidence in American business. The purpose of this research was to develop a measure of managerial moral judgment that can be used in future research and managerial assessment. The measure was patterned after the Defining Issues Test, a widely used general measure of moral judgment. With content validity as the goal, we aimed to sample the domain of managerial ethical situations by establishing links to dimensions (...) of managerial performance, as well as to the types of organizational justice issues managers encounter. Proposed scenarios were evaluated for realism by ethics officers and human resource managers. Results indicated that the new measure is reliable and correlates with a number of relevant variables in the hypothesized manner, demonstrating evidence of construct validity. Implications for future research and for human resources management are discussed. (shrink)

Recent allegations of unethical decision-making by leaders in prominent business organizations have jeopardized the world’s confidence in American business. The purpose of this research was to develop a measure of managerial moral judgment that can be used in future research and managerial assessment. The measure was patterned after the Defining Issues Test, a widely used general measure of moral judgment. With content validity as the goal, we aimed to sample the domain of managerial ethical situations by establishing links to dimensions (...) of managerial performance, as well as to the types of organizational justice issues managers encounter. Proposed scenarios were evaluated for realism by ethics officers and human resource managers. Results indicated that the new measure is reliable and correlates with a number of relevant variables in the hypothesized manner, demonstrating evidence of construct validity. Implications for future research and for human resources management are discussed. (shrink)

This study examined experimentally the effect of retaliation strength and accounting students’ level of moral reasoning, on their propensity to blow the whistle (PBW) when faced with a serious wrongdoing. Fifty-one senior accounting students enrolled in an auditing course offered by a large New Zealand university participated in the study. Participants responded to three hypothetical whistle-blowing scenarios and completed an instrument that measured moral reasoning (Welton et al., 1994, Accounting Education . International Journal (Toronto, Ont.) 3 (1), 35–50) on one (...) of two conditions – i.e., strong or weak retaliation for whistle-blowing. Consistent with the results of Arnold and Ponemon (1991, Auditing: A Journal of Practice and Theory 10 , 1–15) this study found that the strength of retaliation and participants’ moral reasoning level positively affected their PBW. Unlike results reported in Arnold and Ponemon (1991, Auditing; A Journal of Practice and Theory 10 , 1–15) a significant interaction effect of moral reasoning level and retaliation on participants’ PBW was not found. However, results showed that a participant’s gender has a significant effect on the relationship between his or her moral reasoning level and PBW. These results support the need to improve ethical awareness through accounting education and to increase protection for whistle-blowing (Miceli 2004, Journal of Management Inquiry 13 , 364–366). Furthermore, many participants found it difficult to take a stand when serious wrongdoing is discovered. Therefore, policymakers must exercise caution when placing heavy reliance on whistle-blowing, especially when whistle-blower protection processes are complex and not easily accessible, and processes to facilitate whistle-blowing may vary substantially between public and private sector organizations (Scholtens, 2003, Review of the operation of the Protected Disclosures Act 2000: Report to the Minister of State Services ). (shrink)

Using Hofstede's culture theory (1980, 2001 Culture's Consequences: Comparing Values, Behaviours, Institutions, and Organizations Across Nation. Sage, NewYork), the current study incorporates the moral development (e.g. Thorne, 2000; Thorne and Magnan, 2000; Thorne et al., 2003) and multidimensional ethics scale (e.g. Cohen et al., 1993; Cohen et al., 1996b; Cohen et al., 2001; Flory et al., 1992) approaches to compare the ethical reasoning and decisions of Canadian and Mainland Chinese final year undergraduate accounting students. The results indicate that Canadian accounting (...) students' formulation of an intention to act on a particular ethical dilemma (deliberative reasoning) as measured by the moral development approach (Thorne, 2000) was higher than Mainland Chinese accounting students. The current study proposes that the five factors identified by the multidimensional ethics scale (MES), as being relevant to ethical decision making can be placed into the three levels of ethical reasoning identified by Kohlberg's (1958, The Development of Modes of Moral Thinking and Choice in the Years Ten to Sixteen. University of Chicago, Doctoral dissertation) theory of cognitive moral development. Canadian accounting students used post-conventional MES factors (moral equity, contractualism, and utilitarianism) more frequently and made more ethical audit decisions than Chinese accounting students. (shrink)

As a contribution to the continuing debate about tax practitioner ethics, this paper explores the main streams of Western ethical thought that are relevant to tax practitioners’ work, most typically deontology and consequentialism. It then goes on to consider the impact of such ethical influences on the professional ethical codes of conduct that govern tax practitioners’ work, and attempts to unravel the complex work and ethical environment of the practice of tax in terms of tax compliance and tax avoidance. The (...) paper then examines the prior studies on tax practitioners and ethics and the type of dilemmas that practitioners face in the context of their work. The paper proceeds to examine empirically the extent to which tax practitioners take a consequentialist versus a deontological approach in their reasoning about moral dilemmas. This is carried out by an innovative use of the Defining Issues Test. (shrink)

This study uses three audit-specific ethical dilemmas to assess the level of ethical reasoning between Chinese accounting students (as proxies for new entrants to the auditing profession) and experienced auditors. A sample of U.S. accounting students is used as a base for comparison. Consistent with expectations based on particularly salient aspects of Chinese national culture, we find the Chinese students’ levels of ethical reasoning to be significantly lower than those of their U.S. counterparts in the two cases that invoked these (...) cultural attributes. In contrast, the Chinese students’ level of ethical reasoning is slightly higher than that of the U.S. students in the third, control case. We further find that the Chinese auditors’ levels of ethical reasoning are even lower than those of the Chinese students in two cases, while not being significantly different in the third. Together, these findings suggest that cross-national differences in auditors’ ethical reasoning depend on the nature of the ethical dilemma and caution against wholesale inferences about ethical reasoning levels in China. (shrink)

This paper compares and contrasts two distinct techniques for measuring moral judgment: The Moral Judgment Interview and the Defining Issues Test. The theoretical foundations, accompanying advantages and limitations, as well as appropriate usage of these methodologies are discussed. Adaptation and use of the instruments for business ethics research is given special attention.

This paper reports on the development of a research instrument designed to explore ethical reasoning in a tax context. This research instrument is a version of the Defining Issues Test (DIT) originally developed by Rest [1979a, Development in Judging Moral Issues (Univer sity of Minnesota Press, Minneapolis, MN); 1979b, Defining Issues Test (University of Minnesota Press, Minneapolis, MN)], but adapted to focus specifically on the environment encountered by tax practitioners. The paper explores reasons for developing a context-(and profession-) specific test, (...) and details the manner in which this was undertaken. The study on which it is based aims to compare the reasoning of tax practitioners in the taxspecific context and in the general social context covered by the original DIT, and to compare this with the reasoning of non-specialists in these two contexts. The paper therefore also considers the issues that arise when using such tests to compare reasoning in different domains or to compare groups. The focus on instrument development to measure ethical reasoning in a specific domain will contribute to the literature on research methods in the area of the DIT and will facilitate cross-study comparisons. (shrink)

This paper reports on the development of a research instrument designed to explore ethical reasoning in a tax context. This research instrument is a version of the Defining Issues Test originally developed by Rest [1979a, Development in Judging Moral Issues ; 1979b, Defining Issues Test ], but adapted to focus specifically on the environment encountered by tax practitioners. The paper explores reasons for developing a context- specific test, and details the manner in which this was undertaken. The study on which (...) it is based aims to compare the reasoning of tax practitioners in the taxspecific context and in the general social context covered by the original DIT, and to compare this with the reasoning of non-specialists in these two contexts. The paper therefore also considers the issues that arise when using such tests to compare reasoning in different domains or to compare groups. The focus on instrument development to measure ethical reasoning in a specific domain will contribute to the literature on research methods in the area of the DIT and will facilitate cross-study comparisons. (shrink)

While much of the empirical accounting literature suggests that, if differences do exist, Big Four employees are more ethical than non-Big Four employees, this trend has not been evident in the recent media coverage of Big Four tax practitioners acting for multinationals accused of aggressive tax avoidance behaviour. However, there has been little exploration in the literature to date specifically of the relationship between firm size and ethics in tax practice. We aim here to address this gap, initially exploring tax (...) practitioners’ perceptions of the impact of firm size on ethics in tax practice using interview data in order to identify the salient issues involved. We then proceed to assess quantitatively whether employer firm size has an impact on the ethical reasoning of tax practitioners, using a tax context-specific adaptation of a well-known and validated psychometric instrument, the Defining Issues Test. (shrink)

How tax practitioners approach ethical dilemmas remains generally unexplored in academic literature. We use here Rest’s original Defining Issues Test (Development in judging moral issues. Minneapolis: University of Minnesota Press, 1979; Moral development. Advances in research and theory. New York: Praeger Publishers, 1986), combined with a tax context-specific test and in conjunction with a control group of non-tax specialists, to examine tax practitioners’ moral reasoning in a social and tax context. We investigate: (i) the effect of a tax context on (...) issues raised (finding that practitioners generally reason at lower levels than in social scenarios); (ii) whether the profession attracts people who reason at certain levels (finding that it does not); and (iii) whether practitioners are affected by training/socialization in their professional context (finding that that they are). (shrink)