Federal discrimination laws have defined two distinct types of activity that constitute sexual harassment – "hostile environment" and "quid pro quo." The Civil Rights Act of 1991 and more recent Supreme Court rulings make it easier for workers to win lawsuits claiming they were sexually harassed in the work environment.While the public accounting profession continues to address gender-related problems, it remains vulnerable to claims of sexual harassment. In an attempt to better understand the underlying risk the (...) class='Hi'>public accounting profession faces, this study focuses on identifying (1) the extent of sexual harassment in the public accounting profession, (2) the type of harassing behavior that is most common, and (3) where the harassment occurs. (shrink)

This chapter contains sections titled: Introduction Public accounting services AICPA's code of professional conduct Enforcement of the Code of Conduct Illustrative disciplinary actions Controversial ethical issues in the accounting profession Conclusion.

This study examines the relationship between an employee's level of moral reasoning and a form of work performance known as organizational citizenship behaviors (OCB). Prior research in the public accounting profession has found higher levels of moral reasoning to be positively related to various types of ethical behavior. This study extends the ethical domain of accounting behaviors to include OCB. Analysis of respondents from a public accounting firm in the northeast region of the United (...) States (n = 107) support a positive and significant relationship between moral reasoning and two dimensions of OCB: interpersonal helping behaviors and sportsmanship behaviors. This study controls for previously identified determinants of OCB (e.g., procedural justice) and demographic variables (age, sex, tenure and social desirability). Results suggest that moral reasoning accounts for professional behaviors that are perceived as intrinsically good by the employee and economically beneficial by the employer. (shrink)

The purpose of this study is to expand our understanding of the factors that influence ethical behavioral intentions of public accountants. Recent scandals have dominated the news and have caused legislators, regulators and the public to question the role of the accounting profession. Legislative changes have brought about major structural changes in the profession and continued scrutiny will surely lead to further changes. Thus, developing an understanding of the personal and contextual factors that influence ethical (...) decisions is critical. An extension of the theory of planned behavior [Ajzen, I.: 1985, Action Control-From Cognition to Behavior ], the model used in this study examined the influence of personal, social and organizational factors on ethical intentions. Specifically, the individual level model tested direct eects of attitudes, subjective norms, perceived behavioral control, moral sensitivity and ethical climate. Professionals from five accounting firms completed a survey that measured responses to ethical dilemmas related to the public accounting domain. To minimize the potential impact of common method bias, the survey instrument was administered in two phases. Hypotheses were evaluated using a structural modeling technique, partial least squares. Results show strong support for a direct relationship between attitudes and ethical intentions. The proposed direct eect of subjective norms was not supported. However, a significant relationship between subjective norms and attitudes was found. Professionals' attitudes towards ethical issues clearly influence intentions. Moreover, this study illustrates the potential influence of social factors in attitude formation. Future research should explore the factors in the public accounting domain that most strongly influence attitude formation. This study suggests that the theory of reasoned action oers a useful framework for exploring these issues. (shrink)

The purpose of this study is to expand our understanding of the factors that influence ethical behavioral intentions of public accountants. Recent scandals have dominated the news and have caused legislators, regulators and the public to question the role of the accounting profession. Legislative changes have brought about major structural changes in the profession and continued scrutiny will surely lead to further changes. Thus, developing an understanding of the personal and contextual factors that influence ethical (...) decisions is critical. An extension of the theory of planned behavior [Ajzen, I.: 1985, Action Control-From Cognition to Behavior (Springer, Heidelberg)], the model used in this study examined the influence of personal, social and organizational factors on ethical intentions. Specifically, the individual level model tested direct effects of attitudes, subjective norms, perceived behavioral control, moral sensitivity and ethical climate. Professionals from five accounting firms completed a survey that measured responses to ethical dilemmas related to the public accounting domain. To minimize the potential impact of common method bias, the survey instrument was administered in two phases. Hypotheses were evaluated using a structural modeling technique, partial least squares. Results show strong support for a direct relationship between attitudes and ethical intentions. The proposed direct effect of subjective norms was not supported. However, a significant relationship between subjective norms and attitudes was found. Professionals’ attitudes towards ethical issues clearly influence intentions. Moreover, this study illustrates the potential influence of social factors in attitude formation. Future research should explore the factors in the public accounting domain that most strongly influence attitude formation. This study suggests that the theory of reasoned action offers a useful framework for exploring these issues. (shrink)

Business professions are increasingly faced with the question of how to best monitor the ethical behavior of their members. Conflicts could exist between a profession's desire to self-regulate and its accountability to the public at large. This study examines how members of one profession, public accounting, evaluate the relative effectiveness of various self-regulatory and externally imposed mechanisms for promoting a climate of high ethical behavior. Specifically, the roles of independent public accountants, regulatory and rule (...) setting agencies, and undergraduate accounting education are investigated. Of 461 possible respondents, 230 questionnaires (a 49.6% response rate) indicated that the profession's own rule setting body (The American Institute of Certified Public Accountants) and the use of peer review were perceived as the most effective mechanisms, while government regulation was ranked least. Respondents also evaluated the extent to which ethics should be covered in the accounting curriculum. For every course, the CPAs believed a greater emphasis on ethics is appropriate than presently exists. Suggestions for more effectively integrating ethics into accounting courses are made. Finally, respondents were also asked whether in answering the questionnaire they used a definition of ethics as either the Professional Code of Conduct or a moral and philosphical framework for guiding beliefs. Those who viewed ethics as abiding by a professional code had more confidence in the mechanisms addressed in this study to aid the public accounting profession's ability to ensure high ethical standards of conduct. Methodological implications of this distinction for future studies in business ethics are discussed. (shrink)

. The accounting profession’s image and reputation is built upon the members of the profession acting with the “highest sense of integrity” in “the public interest” (AICPA, 2003, www.aicpa.org/about). The Enron debacle initiated the latest crisis facing the profession regarding its image and reputation. The American Institute of Certified Public Accountants (AICPA) is the largest professional body representing the accounting profession and the one to which regulators have looked in establishing and upholding (...) professional standards relating to the public practice of accounting and auditing. One of the AICPA’s responsibilities is to “promote public awareness and confidence in the integrity, objectivity, competence and professionalism of CPAs ....” (AICPA, 2003, www.aicpa.org/about). We analyze the public statements issued by the AICPA (i.e., press releases, speeches of officers, testimony, published articles) during this ethical and identity crisis beginning with the AICPA’s first public statement on the Enron debâcle (AIPCA 2001) and concluding with the AICPA recognizing the need for a “new accounting culture” (Melancon 2002). In order to better understand the public discourse, we use image restoration theory (Benoit, 1995), because it provides a typology of strategies for dealing with the public face of crises. We identify the three most common strategies the AICPA employs during this period. Proposals for taking corrective action represent the most commonly employed strategy, but the analysis also indicates an attempt to evade responsibility by claiming defeasibility and to reduce the offensiveness of the situation by employing a bolstering strategy. A second analysis using DICTION, a software package useful in revealing latent dimensions in a text, indicates that early statements tend to use language related to accomplishing specific action while the later statements tend more toward general language that relates to peoples’ everyday lives. The findings raise questions as to substantive nature of the changes proposed by the AICPA, and thus, the extent to which the public interest is being served by them. (shrink)

Role morality can be defined as “claim(ing) a moral permission to harm others in ways that, if not for the role, would be wrong” (A. Applbaum: 1999, Ethics for Adversaries: The Morality of Roles in Public and Professional Life (Princeton University Press, Princeton, NJ) p. 3). Adversarial situations resulting in role morality occur most frequently in the fields of law, business, and government. Within the realm of accounting, professional obligations may place the accountant in a situation where he/she (...) is susceptible to the pressures of role morality. If the accountant engages in acts consistent with role morality, significant harm to others may result. The current study represents an initial investigation into role morality in accounting and includes survey data from three samples of professionals: accountants, physicians, and attorneys. Results suggest that accountants generally do not agree that role morality is acceptable. Additionally, when compared to the groups of physicians and attorneys, physicians agree the least with role morality, while attorneys agree the most. Implications for practicing accountants and suggestions for future research into the theory of role morality are offered. (shrink)

Access to a deep pool of talent is essential to the success of every professional services firm. The supply of that talent is contingent upon the available rewards for the exercise of that talent, and both the existence of the potential rewards and the beliefs that individuals hold about the existence of the rewards affect the decision to remain in the field. One structural factor that may affect the judgment about whether to remain in a profession concerns promotions based (...) on the gender of the employee. In this study, we examine the “glass ceiling” within the context of the accounting profession. While advances have been made within the accounting profession to address the glass ceiling, the continued existence—and perceptions about the continued existence—of the issue exert adverse effects upon the available talent pool and may create long-term problems for the profession. In this study, we investigate glass ceiling perceptions among a large sample of female accounting professionals employed in accounting; the sample includes both public accountants, and those employed in industry accounting. Our study yields the finding of beliefs in bias-driven effects, structural effects, and cultural effects among these accounting professionals. Glass ceiling perceptions are also influenced by several demographic factors. Furthermore, accounting professionals employed by industry are more likely to report a glass ceiling within their firms than accounting professionals employed by public accounting firms. The findings are of interest to researchers who explore gender-related issues in professional service firms such as the field of accounting, and to senior members of practice who are tasked with ensuring the integrity and quality of the talent pool and the equitable distribution of rewards to employees. (shrink)

This paper analyses the ethical cultures of the international accounting profession by using the concept of ‘mainstreaming’ to describe the commitment of an organisation to the ethical function in its operations. The objective of the research on which the paper is based was to rate the efforts of 62 respondent national associations of professional accountants worldwide to incorporate the ethics function into the core operations of their organisations. Sixteen environmental factors were used in the analysis. They were set (...) up as a group of criteria to assess the ethics procedures and systems of the accounting associations, and were divided into two categories. The first group was code based and contained items on code of ethics development and functions which would indicate whether ethically‐friendly management attitudes and systems were in place as a central focus of operations. Some of these elements were capable of fostering a ‘proprietary interest’ attitude on the part of members towards their codes of ethics, which in turn encourages code compliance. With the second group, other key operational aspects were examined to provide a balanced set of criteria. Interrelated elements among factors important to an ethical environment are included in the findings. The study concludes that on average the international accounting profession has attitudinal and systemic approaches that are ‘mainstream’. In general addressees were involved in code authorship and the public had adequate access to codes. However, increased use could be made of ethics professionals in the development of codes, of professional development courses to further the ethics skills of members, and of communication channels to foster a unifying approach to ethics. The study provides criteria for individual associations to assess their mainstreaming status against the international findings. (shrink)

This paper analyses the ethical cultures of the international accounting profession by using the concept of ‘mainstreaming’ to describe the commitment of an organisation to the ethical function in its operations. The objective of the research on which the paper is based was to rate the efforts of 62 respondent national associations of professional accountants worldwide to incorporate the ethics function into the core operations of their organisations. Sixteen environmental factors were used in the analysis. They were set (...) up as a group of criteria to assess the ethics procedures and systems of the accounting associations, and were divided into two categories. The first group was code based and contained items on code of ethics development and functions which would indicate whether ethically‐friendly management attitudes and systems were in place as a central focus of operations. Some of these elements were capable of fostering a ‘proprietary interest’ attitude on the part of members towards their codes of ethics, which in turn encourages code compliance. With the second group, other key operational aspects were examined to provide a balanced set of criteria. Interrelated elements among factors important to an ethical environment are included in the findings. The study concludes that on average the international accounting profession has attitudinal and systemic approaches that are ‘mainstream’. In general addressees were involved in code authorship and the public had adequate access to codes. However, increased use could be made of ethics professionals in the development of codes, of professional development courses to further the ethics skills of members, and of communication channels to foster a unifying approach to ethics. The study provides criteria for individual associations to assess their mainstreaming status against the international findings. (shrink)

The authors empirically examine the nature and extent of ethical problems confronting senior level AICPA members (CPAs) and examine the effectiveness of partner actions and codes of ethics in reducing ethical problems. The results indicate that the most difficult ethical problems (frequency reported) were: client requests to alter tax returns and commit tax fraud, conflict of interest and independence, client requests to alter financial statements, personal-professional problems, and fee problems. Analysis of attitudes toward ethics in the accounting profession (...) indicated that (1) CPAs perceive that opportunities exist in the accounting profession to engage in unethical behavior, (2) CPAs, in general, do not believe that unethical behavior leads to success, and (3) when top management (partners) reprimand unethical behavior, the ethical problems perceived by CPAs seem to be reduced. (shrink)

Current trends toward increased pace, more complex substance and lower tolerance of error have caused the financial marketplace to rely more heavily on the integrity of financial data and, therefore, of those who prepare the financial statements. At the same time, these trends place higher challenges before professional accountants and it is essential that they have excellent ethical guidance to live up to modern expectations. However, in view of the current codes of conduct, an accountant may not have a clear (...) understanding of what priority of interests to satisfy, who can be consulted for advice, to whom to report misdeeds, what protection is offered a right-doer and what sanction will be forthcoming for doing wrong. Possible solutions are offered to these problems in ways that ought to strengthen the accounting profession and prevent unscrupulous companies from taking advantage of both members of the profession and the unsuspecting public. To provide the appropriate quality of service to society in the future, the Canadian accounting profession should offer its members the improved guidance and enhanced mechanisms for confidential consultation, assistance and protection outlined herein. (shrink)

The accounting profession is concerned with the ethical beliefs of its members. To this end, the authors surveyed public accountants, questioning them about the AICPA''s Code of Professional Conduct and their perceptions of how potentially unethical behaviors impact the firm. The paper focuses on respondents'' perceptions of the impact on the firm''s practice, image and degree of concern.Public accountants appear to agree with the AICPA''s Code of Professional Ethics. Their mean responses indicate they believe the Code (...) components are important and extremely important. Some Code components were significantly more important than others, especially demonstrating professionalism and maintaining independence while performing independent audits. Gender, role and organizational level all had significant effects on the importance of the Code. Males, non-auditors and upper management all expressed stronger beliefs in the importance of the overall Code and its components. (shrink)

Recently there has been increased attention paid to the behaviour of those who call themselves professionals. The idea of acceptable professional conduct incorporates the expectations of a number of groups affected by the activities of professionals. The framework of professional behaviour considered acceptable at a point in time is an equilibrium among these groups' expectations. This paper argues that shifts in the expectations of any of these groups will disturb this equilibrium. This process of disequilibrium and change leads to altered (...) views of professional behaviour. Professional misconduct or unprofessional behaviour, that is, the failure to meet expectations, is inherent in the underlying framework of a profession.The framework is applied to the public (chartered) accounting profession, where the interacting groups are accounting professionals, their clients and the general public. Current issues of debate about professional behaviour are identifiable as consequences of altered expectations about acceptable behaviour. Acceptable conduct has become misconduct (and vice versa) and written rules of conduct conflict with unwritten rules. (shrink)

This volume explores the opportunities and challenges facing the accounting profession in an increasingly globalized business and financial reporting environment. It looks back at past experiences of the profession in attempting to meet its public interest obligation. It examines the role and responsibilities of accounting to society including regulatory requirements, increased emphasis on corporate social responsibility, accounting fraud and whistle-blowing implications, internationalization of public interest obligations, and providing the education needed to be successful. (...) The book incorporates an ethical dimension in making these assessments. Its focus is a conceptual, theoretical one drawing on classical philosophy, the sociology of professions, economic theory, and the public interest dimension of accountants as professionals. The authors of papers are long-time contributors to the annual symposium on Research in Accounting Ethics sponsored by the Public Interest Section of the AAA.. (shrink)

In the past decades, professions have increasingly been called to account. Several authors have reported that this increased public professional accountability, in the form of showing that professional conduct meets predefined standards or rules, has had severe negative consequences for professionals, their clients and society, and call for ‘intelligent’ forms of accountability; forms of accountability that may inform a wider public about professional conduct but do not harm it. In this paper, we propose a form of ‘intelligent’ (...) class='Hi'>public professional accountability. Taking Freidson’s notion of institutional ethics as a point of departure, we develop a form of accountability that seeks to account for the conditions required for professional conduct. The paper first discusses the current ‘dilemma of professional accountability,’ describes ‘ideal-type professional conduct’ and goes into the conditions it requires. Next, it shows what accounting for these conditions entails and that this form of accountability fits the criteria for intelligent accountability, as set by O’Neill Capital failure: rebuilding trust in financial services, Oxford University Press, Oxford, 2014). (shrink)

ABSTRACT We examine the influence of neo-liberalism in re-shaping the accountability of five professional groups (accountants, solicitors, social workers, nurses and doctors) and its consequence for their CPD policies. Documentary analysis and Quarterly Labour Force Survey data (n=31,260) from the 1990s to the present are integrated in a comparative method which examines whether changes are specific to a profession or represent more general patterns. Using complementary theories from neo-liberal economics and the sociology of professionalism, we show how regulatory oversight (...) has altered accountabilities. Its consequences for the autonomy of professions and individuals in determining CPD requirements differ amongst the five groups, mediated by status, public concern, regulator activism and, possibly, alignment with the financial sector. Efficiency and equity are analysed using theories of professional learning and human capital. Wider economic conditions influence the incidence of CPD with recent years showing declining participation; we also show changes in ?what counts? as CPD and its greater integration with performance management. Findings on selected equity criteria are also reported. Some regulators are becoming more specific about the content of CPD, while others are defining what constitutes good practice and requiring its use in planning CPD. Greater attention is being given to issues of ethics and probity. (shrink)

The need to maintain the public trust in the integrity of the accounting profession has led to increased interest in research that examines the moral reasoning abilities (MRA) of Certified Public Accountants (CPAs). This study examines the MRA of CPAs practicing in small firms or as sole practitioners and the factors that affect MRA throughout their working careers.The results indicate that small-firm accounting practitioners exhibit lower MRA than expected for professionals and that age, gender and (...) socio-political beliefs affect the moral reasoning abilities of small-firm practitioners. We also find that completion of an ethics course in college has a positive impact on MRA. Also, the survey respondents indicate overwhelming support for including ethics courses within the business curriculum. Finally, the fact that those accountants with the lowest MRA are the least supportive of ethical training may indicate the need for mandatory, rather than optional, training in ethics both in university and Continuing Professional Education courses. (shrink)

This collection of original essays by leading and emerging scholars in the field examines the history, conditions, organization, and strategies of pro bono lawyering. Private Lawyers and the Public Interest: The Evolving Role of Pro Bono in the Legal Profession traces the rise and impact of the American Bar Association's campaign to hold lawyers accountable for a commitment to public service and to encourage public service within law schools. Combining empirical legal research with reflections by practitioners (...) and theorists about the meaning and practice of pro bono legal work, this collection of essays interrogates the public service ideals that are inscribed within the legal profession and places these ideals within a broader social, economic, ideological, and normative context. Particular attention is paid to the factors that explain why lawyers engage in pro bono work and the ways in which their views of pro bono are mediated by the institutional context of their legal practice. The book also explores the concept of "public" in public service and compares pro bono as a means of delivering legal services with other mechanisms such as state funding. Collectively, these essays investigate the evolving role of pro bono in the legal profession and in law schools, the relationship between pro bono ideals and pro bono in practice, the way that pro bono is shaped by external forces beyond the individual practitioner, and the multi-faceted nature of legal professionalism as expressed through pro bono practice. (shrink)

The public accounting industry’s voluntary code of conduct in the United States is the American Institute of CPA’s Code of Professional Conduct. Based on our analysis, we conclude that the accounting industry’s current code is limited in its ability to serve the public interest in three respects. Specifically, the code is input-based, requires no third-party attestation of compliance with the code, and contains no public reporting process of code compliance/noncompliance at the accounting firm level. (...) We propose that the accounting profession should reorient its largely input-based Code of Professional Conduct to include output-based performance measurements. We also conclude that third-party attestation of compliance with the profession’s code would help to promote compliance. Finally, we maintain that the accounting industry should initiate a public reporting process at the individual accounting firm level. Such a requirement would add a degree of public accountability as to whether a firm complies or fails to comply with the industry’s voluntary code of conduct. (shrink)

The public accounting industry's voluntary code of conduct in the United States is the American Institute of CPA's Code of Professional Conduct. Based on our analysis, we conclude that the accounting industry's current code is limited in its ability to serve the public interest in three respects. Specifically, the code is input-based, requires no third-party attestation of compliance with the code, and contains no public reporting process of code compliance/noncompliance at the accounting firm level. (...) We propose that the accounting profession should reorient its largely input-based Code of Professional Conduct to include output-based performance measurements. We also conclude that third-party attestation of compliance with the profession's code would help to promote compliance. Finally, we maintain that the accounting industry should initiate a public reporting process at the individual accounting firm level. Such a requirement would add a degree of public accountability as to whether a firm complies or fails to comply with the industry's voluntary code of conduct. (shrink)

With the demise of Andersen, LLP and new legislation that puts an end to self-governance in public accounting, the effectiveness of current models of accounting ethics have been seriously called into question. We argue that the profession suffers from fundamental limitations in its ethical framework that makes it impossible to effectively address ongoing ethical problems. The dominant representation of professional behavior is an agency model of ethics, in which the ultimate responsibility for identifying and dealing with (...) ethical dilemmas resides with the individual. We argue that structural forces such as control over resources, meaning systems, and community norms and values also have a strong influence on the actions of accountants and that these must also be considered. The recent legitimation crisis has forced the accounting profession and its constituencies to begin to recognize and address the structural aspects of ethics as they enable and constrain action. We propose a framework based on structuration theory and learning theory that allows for systematic, multi-level investigation of the structural forces that cause ethical dilemmas to arise and to be recognized and that influence the manner in which they are analyzed and resolved. This framework should be capable of continual critique and reconfiguration as environmental conditions change. (shrink)

The growing reliance on non-governmental independent regulators in many social and economic domains, including corporate financial reporting, has brought to the fore concerns over their regulatory accountability. This study looks at one aspect of the regulatory due process-regulatory impact assessment (IA). Drawing on the analytical framework developed by Bovens (Public accountability: a framework for the analysis and assessment of accountability arrangements in the public domain. CONNEX papers, Research Group 2, Democracy and Accountability in the EU, 2006, Eur Law (...) J 13(4): 447–468, 2007), we evaluate the contribution of IA as an instrument for enhancing regulatory accountability in the context of the Financial Reporting Council, an independent regulator for the accountancy profession in the UK. The study’s findings suggest that, despite an increasing level of sophistication in the manner in which IA is used within FRC, the contribution of IA to regulatory accountability remains limited. Specifically, there are concerns as to whether IA is used to achieve a transparent and fair regulatory process or simply to maintain an image of good governance and justify policy decisions that would have been made even in the absence of IA. (shrink)

Over the past decade, a number of accounting and financial reporting frauds have led to lost stock wealth, destroyed public trust, and a worldwide recession that called for necessary reform. Regulatory responses and systemic reforms quickly followed, and we show that, while necessary, these reforms are insufficient. The purpose of this paper is to forward virtuous professionalism as a necessary path toward restoring financial reporting systems. We take the position of external observer and analyze the accounting (...) class='Hi'>profession over time to assess what has transpired within our financial reporting systems. Our analysis reveals that the combined influence of commercialism and regulatory response has led to a systemic decline in accounting’s professional ideals and, as a result, an erosion of public trust. We then propose virtuous professionalism as a necessary process for restoring financial reporting systems based on sociological, professional, and philosophical theories. We argue that virtuous professionalism is necessary for restoring the public servant identity of the accounting professional. We conclude that efforts to restore financial reporting systems should begin with reforms that restore professional identity shaped by virtues. (shrink)

The public accounting profession has long relied on its reputation for integrity and veracity as justification for its professional status and monopoly privilege predicated on claims of acting in the public interest. If such status and privilege are to be justified and sustained, serious consideration of what constitutes ethical behavior, how such behavior is motivated as well as an explicit recognition of the rights and interests of affected parties constitutes an ethical imperative for the profession. (...) Traditionally, work on ethics and auditing is quite narrow, failing to recognize the social context of individual actions, failing to identify the relevant constituencies of the profession, and failing to articulate processes through which the constituencies interests can be identified. Generally, the accounting literature has taken a cognitive perspective on ethical decision making which views the resolution of ethical dilemmas as primarily a function of the moral makeup of the actor responding within the context of the Code of Professional Conduct. The purpose of this paper is to broaden the theoretical base of ethical research, specifically within the area of professional accounting and more generally in the area of business. We propose the application of structuration theory in conjunction with stakeholder theory and a responsibility ethic. The application of stakeholder theory is a means for identifying affected constituencies. A responsibility ethic recognizes the situatedness of an individual within an ongoing professional community. Structuration theory provides a theoretical framework for articulating and investigating both the structures within which action is carried out as well as the interaction between the social structures and the actors. Taken together, the theories allow for an enhanced ability to define ethical behavior within a business context and to understand the contextual antecedents and consequences of ethical acts. (shrink)

The American Institute of Certified Public Accountants monitors the misconduct of its members using the AICPA Code of Professional Conduct. To accomplish this task, the AICPA relies on various stakeholders to report known violations of its CPC. We examine the full population of sanctions imposed by the AICPA on its members under its CPC from 2008–2013 to identify recent trends in the misconduct of accounting professionals. While we find that multiple stakeholders identify and report violations, we also find (...) that the most common types of violations remain consistent with those reported in the 1990s. Further, we develop a taxonomy based on prior accounting literature to determine whether the AICPA CPC is being enforced to defend the public interest and/or the private interests of the accounting profession. In contrast to prior studies, our results suggest that as the accounting profession emerges from a recession and period of intense public scrutiny, the AICPA CPC is largely being enforced to defend the public interest. This public interest focus was most pronounced during the recessionary years of 2008–2010, as evident from misconduct reported by parties such as the Internal Revenue Service, Securities and Exchange Commission, Public Company Accounting Oversight Board, and state boards of accountancy. Although key stakeholders have recently focused on reporting misconduct that threatens the public interest, we believe there are still areas in need of improvement, especially around the level of detail provided in the AICPA’s sanction records. We propose some possible solutions to improve public transparency. (shrink)

The current financial reporting environment, with its increasing use of accounting estimates, including fair value estimates, suggests that unethical accounting estimates may be a growing concern. This paper provides explanations and empirical evidence for why some types of accounting estimates in financial reporting may promote a form of ethical blindness. These types of ethical blindness can have an escalating effect that corrupts not only an individual or organization but also the accounting profession and the (...) class='Hi'>public interest it serves. Ethical blindness in the standards of professional accountants may be a factor in the extent of misreporting, and may have taken on new urgency as a result of the proposals to change the conceptual framework for financial reporting using international standards. The social consequences for users of financial statements can be huge. The acquittal of former Nortel executives on fraud charges related to accounting manipulations is viewed by many as legitimizing accounting gamesmanship. This decision illustrates that the courts may not be the best place to deal with ethical reporting issues. The courts may be relied on for only the most egregious unethical conduct and, even then, the accounting profession is ill equipped to assist the legal system in prosecuting accounting fraud unless the standards have been clarified. We argue that the problem of unethical reporting should be addressed by the accounting profession itself, preferably as a key part of the conceptual framework that supports accounting and auditing standards, and the codes of ethical conduct that underpin the professionalism of accountants. (shrink)

Recent highly publicized ethical breaches including those at Enron and WorldCom have focused attention on ethical behavior within the accounting profession. At the heart of the debate is whether ethical attitudes of accountants are to blame. Using a nationally representative sample of accounting practitioners and a multidisciplinary student sample at two Southern United States universities, we compare sample responses to 25 ethically charged vignettes to test whether they differ. Overall, we find no significant difference - even for (...) a specific "accounting tricks" vignette, which resembles the Enron and WorldCom situations. We do find, however, that the practitioners were more accepting of vignettes that involved physical harm to individuals and those that were legal. We postulate that accounting practitioners may apply a legalistic framework to their assessment of the acceptability of each vignette. Focusing on an "accounting tricks" vignette, we also find no significant difference between auditors and institutional practitioners compared to all other types of accountants in the sample. We conclude that ethical attitudes of accounting practitioners do not differ significantly by specialty area. (shrink)

Every profession requires special knowledge and skills, and each professional is expected to possess certain essential personal qualities. Likewise, in the accounting profession, accountancy students need to possess certain essential personal qualities that their employers look for. The growing concern over the ethics of professionals makes it important consider the perceptions of the public, students, and accountants of the values of accounts in the working world.A questionnaire was given to a sample population of 500 which included (...) the public, accounting students, and accountants. The questionnaire was designed to examine the personal qualities of accountants. From this study, the perceptions of the personal qualities of accountants are that accounts should be ethical and have integrity. These perceptions reflect the importance of ethics in the accounting profession. On other qualities, the public differ in perception from that of the students and accountants. (shrink)

The American Institute of certified public accountants (AICPA) has promulgated a Code of Professional Conduct , which has served as the primary ethical standard for public accountants in the United States for more than 20 years. It is now out of date and needs to be replaced with a code of ethics. Just as U.S. generally accepted accounting principles are being migrated toward “principles-based accounting” as part of a convergence with international financial reporting standards, a similar (...) process needs to occur with ethics. This article organizes the primary rules of the AICPA Code around five essential virtues: objectivity, integrity, inquisitiveness, loyalty, and trustworthiness. These virtues correspond to the general principles set forth in the Code of Ethics for Professional Accountants of the International Federation of Accountants (IFAC). From this virtue ethics perspective, various rules of the AICPA Code are critiqued as being inadequate at best, and poorly crafted at worst. The article concludes with the proposition that principles-based ethics serves the profession and the financial reporting process better than the current rules-based approach. (shrink)

Ethical Issues in Accounting offers a comprehensive and accessible introduction for students and teachers of business studies and accountancy as well as the practicing accountant. The book covers the ethical implications of several aspects of accounting: * ethics and taxation * creative accounting * ethics in accounting regulation * ethical dilemmas in the public sector * whistleblowing * various aspects of social accounting, including environmental accounting. The fitness of the accounting profession (...) as guardians of accounting and auditing ethics is also discussed in detail. (shrink)

Recent highly publicized ethical breaches including those at Enron and WorldCom have focused attention on ethical behavior within the accounting profession. At the heart of the debate is whether ethical attitudes of accountants are to blame. Using a nationally representative sample of accounting practitioners and a multidisciplinary student sample at two Southern United States universities, we compare sample responses to 25 ethically charged vignettes to test whether they differ. Overall, we find no significant difference – even for (...) a specific “accounting tricks” vignette, which resembles the Enron and WorldCom situations. We do find, however, that the practitioners were more accepting of vignettes that involved physical harm (PH) to individuals and those that were legal (but ethically questionable). We postulate that accounting practitioners may apply a legalistic framework to their assessment of the acceptability of each vignette. Focusing on an “accounting tricks” vignette, we also find no significant difference between auditors and institutional practitioners compared to all other types of accountants in the sample. We conclude that ethical attitudes of accounting practitioners do not differ significantly by specialty area. (shrink)

MacKay’s Public Health Virtue Ethics offers a distinctive approach to public health ethics, with social structures at the forefront. MacKay’s helpful overview of the recent literature considers three distinct referents for ascribing virtues in public health ethics: (i) individuals, such as public health practitioners, (ii) social structures, such as public health institutions and policies and (iii) the communities affected by public health policy. While MacKay is interested in virtuous structures, I am interested in the (...) structure of virtue as a precursor to this approach. In this commentary, I seek to unpack the structure of virtue itself, to delineate what various accounts of public health virtues offer, including MacKay’s new account. For such clarity, I turn to David Pears’ neo-Aristotelian essay on moral courage, in which he distinguishes external goals, internal goals and countergoals. Additional virtue vocabulary advances discussion of how the moral psychology of virtue traditions can be best adapted to public health professions, policy and practice. (shrink)

The authors apply the issue life cycle model to analyze the 1999 through 2001 dispute between the Securities and Exchange Commission and the accounting profession concerning auditor independence. The analysis also brings additional insights that extend understanding of the issue life cycle and issues development. This analysis highlights the roles of a trigger event, the shift of an issue from a technical concern to a public debate, and likely recurrence. The reappearance of the auditor independence issue in (...) 2002 with accounting scandals is consistent with the article’s findings and highlights the use of the issue life cycle model and issue evolution. (shrink)

_Ethical Issues in Accounting_ offers a comprehensive and accessible introduction for students and teachers of business studies and accountancy as well as the practicing accountant. The book covers the ethical implications of several aspects of accounting: * ethics and taxation * creative accounting * ethics in accounting regulation * ethical dilemmas in the public sector * whistleblowing * various aspects of social accounting, including environmental accounting. The fitness of the accounting profession as (...) guardians of accounting and auditing ethics is also discussed in detail. (shrink)

This paper examines ethical violations committed by Certified Public Accountants in Puerto Rico in the 2002–2010 period and the related disciplinary actions taken by the local regulatory bodies. The institutional settings for the accounting profession in PR are different from those of the United States. Ethical complaints are investigated by the PR Society of CPAs and evaluated based on the Code of Professional Conduct of the American Institute of Certified Public Accountants, although most CPAs in PR (...) are not affiliated with the AICPA. Our study is based on data provided by the PR Society of CPAs that is not publicly available. We examine the association between the occurrence of the ethical violations and certain variables such as gender, type of practice performed by the CPA, and whether the CPA participates in a peer review program. Results of a multiple correspondence analysis suggest that not being a member of the AICPA, practicing as a sole practitioner, and not participating in a peer review program seem to be more associated with the occurrences of ethical violations by CPAs. We compare our findings with prior research on ethical infractions committed by CPAs in the United States and find some differences attributable to the institutional settings in PR. Overall, our results suggest the importance of codes of conduct in the accounting profession and compliance with such ethical guidelines by practicing accountants. (shrink)

In this article, we extend the research on the public interest to non-audit engagements performed by accounting firms and public accountants. Our thesis is that non-audit engagements, as private goods, require a distinct approach to the public interest than auditing. We suggest that a public value perspective can be used conceptually to provide substantial criteria for designing non-audit engagements conducive to public value creation and greater accountability. We illustrate the applicability and consequences of a (...) public value perspective by analyzing and contrasting the decision of two judicial opinions deciding whether Deloitte and the lead partner of a consulting engagement failed to act in the public interest in engineering the sale of collapsed British carmaker MG Rover. We advocate for a significant change in ethical codes of conduct by defining public interest obligations, not only in terms of professional attributes, but also in terms of outcomes. Our approach also suggests a requirement regarding planning a non-audit engagement, including establishing a public value proposition detailing the planned nature of the engagement, and extent of the assessment of the intended public value creation. We discuss the aspirational function of codes of conduct to provide accountability other than in terms of technical output, and to maintain the legitimacy and purpose of the profession. (shrink)

There has been considerable interest in the literature about how professions operate in both the private and public interest. This paper examines this issue in the context of the enforcement of the professional code of conduct of a particular professional accounting association. The paper explores whether certain enforcement actions of the association suggest behaviour motivated at least partially by private interest. It then considers whether the consequences of such behaviour or practices are troubling.

This study investigates how one important accounting professional authority—CPA Canada—discusses accounting ethics and exhorts its members to think about ethics-related issues. To do this, we rely on empirical evidence of the types of arguments used by CPA Canada to describe what they consider acceptable moral justifications in a variety of practical situations that accountants may encounter. We argue that the articles contained in the profession’s primary publication for all members, CPA Magazine, offer a wealth of such evidence. (...) We analyze 237 articles about accounting ethics that were published in CPA Magazine from January 2000 to December 2017, and find evidence of moral pluralism. Six categories of justifications dominate: private commitments, utility, perfectionist ends, general duties, and specific obligations, plus self-interest. Of these categories, the specific obligations logic is the most widely used. We offer a tentative explanation, and discuss the implications of our findings for a better grasp of the complexities of accountants’ practical conflicts and a rethink of the ongoing tension between professionalism and commercialism. (shrink)

Over the last 80 years, a major goal of medical educators has been to improve the quality of applicants to medical school and, hence, the resulting doctors. To do this, academic standards have been progressively strengthened. The Medical College Admission Test (MCAT) in the United States and the undergraduate science grade point average (GPA) have long been correlated with success in medical school, and graduation rates have been close to 100 percent for many years. Recent studies have noted that some (...) doctors having difficulties in practice were found to have had similar problems while in school. In this essay, we present a brief historical account of attitudes and approaches to admissions requirements, then discuss basic broad areas of accomplishment in clinical practice: academic mastery, clinical acumen, and professionalism. We then review data that suggest that lack of competency can often be detected very early in a student’s career and may or may not be immune to remediation efforts. We end with a recommendation for a course of action that upholds and fulfills the profession’s social responsibility. This will be a moral argument, defending an aggressive but equitable approach to maintaining both public accountability and trust. (shrink)

Public accounting firms can build integrity within their organizations through early detection of fraud. One way to reduce and detect fraud is to encourage whistleblowing as a prosocial behavior. We explore the impact of mentoring on intention to report fraud. A survey with 120 responses from the US public accountants suggests that quality mentoring relationships, a common feature in the profession, and caring ethical climate positively relate to internal reporting of fraud. Two intermediate variables, trust and (...) affective commitment, mediate these effects. Mentor-relationship quality also increases perceptions of caring ethical climate. The study contributes to two bodies of research by finding extended benefits from mentoring, beyond those typically discussed in academic literature; and identifying a previously unexplored firm intervention capable of positively influencing prosocial behavior and combating fraud. (shrink)

In this research, we review the current level of ethics education prior to college and the emphasis of the Association to Advance Collegiate Schools of Business (AACSB) on business ethics education in college using an ‘across the curriculum’ approach. We suggest that business schools and accounting practitioners can forge a more meaningful partnership than what currently exists through the traditional business advisory council prevalent at most schools of business. Ethical conduct is inherent in the practice of public (...) class='Hi'>accounting and a hallmark of the accounting profession. Accounting practitioners can play a significant and positive role in helping business schools to reexamine their obligations to society and their students by actively engaging in the exchange of views by academics on the necessity for ethics education as well as those of professional accounting bodies.1. (shrink)

Ethics and Law for the Health Professions is a cross-disciplinary medico-legal book whose previouseditions have been widely used in the medical world. This new 3rd edition is fully revised with all ethics and law topics updated to reflect recent developments. New chapters include dealing specifically with children, health care and the environment, infectious diseases, public health, and ethics and chronic disease. All law sections have been extensively re-visited by Dr Cameron Stewart. Its special features are its focus on a (...) clinically relevant approach, and its recognition that health care professionals are often confronted by legal issues and ethical issues at the same time. Health professionals have to satisfy both, and their legal advisers need to be aware of the dilemmas this can present. This book is careful to distinguish between ethics and law. Its chapters take account of all the health professions, and their differing responsibilities, and cover a very wide range of the issues they face. (shrink)

In the aftermath of the accounting scandals of the early 2000s, the accounting profession experienced increased legislation and rules regulating ethical behavior of professional accountants and accounting firms. This paper considers ethics education for professional accountants (particularly Certified Public Accountants (CPAs)) and concludes that there is a need for a broader, principles-based approach to continuing professional ethics (CPE) in the United States. This conclusion is supported by the recent trend toward principles-based global ethics standards and (...) a review of the current professional standards and CPE requirements for ethics education for CPAs. We present tools, such as listing core values, creation of a personal mission statement, and the utilization of a comprehensive ethical decision-making framework, that can be incorporated into ethics CPE courses for CPAs, ethics education in academic programs, and ethical decisions in practice. We also present results from a survey about ethical dilemmas distributed to a sample of CPAs taking CPE ethics courses. Consistent with our expectations, we find that for ethical dilemmas in which professional standards more clearly apply and the facts were less ambiguous, the CPAs in the sample responded with higher average levels of ethicality and more agreement than for ethical dilemmas when professional standards were not as applicable and facts were more ambiguous. Finally, the paper demonstrates how a comprehensive ethical decision-making framework may be applied to ethical dilemmas, particularly those that cannot be satisfactorily resolved using a rulesbased approach and makes recommendations for future research. (shrink)

The need to integrate ethics into professional life, from the grassroots up, has been recognized, and a comprehensive ethics program has been proposed as a model. The model includes the four dimensions of: consensus building, ethics guidelines development and review, education, and implementation. The activities of the International Society for Environmental Epidemiology (ISEE) are presented as examples and compared with the proposed model. Several innovative activities are described and incentives for ethical professional conduct are highlighted. The examples are provided for (...) emulation by other professional organizations in the hope that, thereby, greater protection of the public interest will be achieved. (shrink)

The sociological models of functionalism and conflict are introduced and utilized to analyze professionalism in the accounting profession as it is manifest in the American Institute of Certified Public Accountant's Code of Conduct. Rule 203 of the Code and provisions of the Code related to the public interest are examined using semiotic analysis to determine if they are most consistent with the functionalist or conflict models. While the analysis does not address intent of the Code, it (...) is determined that the Code contains semantic defects which result in different interpretations of the Code to different readers. The defects found are most consistent with the conflict model of professionalism. This has implications for the public and for individuals within the profession, making the Code less useful to both groups. The defects are seen as a potential battleground for the self-interest vs the public interest orientation of the accounting profession. (shrink)