1. MOSAIC Conference, University of Konstanz, 27-31 July 2009
Ethics to Accountants:
Challenges of a Global Qualification
Devendra Kodwani,
ACCA and Open University, UK
Marcia Schillinger,
University of Education Weingarten, Germany

2. Presentation plan Introduction and aims
ACCA’s approach to ethics/moral judgment competence
The Moral Judgment Test (MJT, Lind)
Accounting Judgement Exercise (AJE)
Analysis of AJE responses
Conclusions, questions, way forward

3. Introduction and aims
Accounting profession and importance of ethics and moral judgment competence
Primary aims are:
Describe ACCA’s approach to ethics/moral competence
Discuss the results from AJE
Raise questions for future research
Primary purpose of this paper is to highlight the efforts and needs of professional accounting bodies to teach ethics to students of accounting. Accountants as managers and auditors are involved in decisions on reporting of financial performance of organisations. Accountants’ judgements directly influence the reliability and accuracy of financial information and financial decisions. The financial world has been hit by one after another scandal involving fraudulent reporting and accounting practices. The response from higher education and professional bodies has seen a qualitative shift in its approach to teaching of ethics in last 3 decades or so. We aim to present a brief survey of literature which covers this qualitative shift. Then we describe how a particular large accounting body offering internationally recognised accounting qualification has responded to the challenge of integrating ethics in their curriculum. As part of integrating ethics teaching across the components qualification ACCA requires students to go through an Online Ethics Module which includes a dilemma based exercise. We present analysis of the results of a random sample of 200 students who responded to this Accounting Judgement Exercise which was inspired by Morality Judgement Test developed by Prof. Lind. Finally we raise few questions for further research on teaching ethics to accounting students.

4. Accounting profession and importance of ethics
Role of accountants in society
They produce accounting reports (communication about economic conditions of firm, economy, and other organisation)
Doctors/pathologists of financial condition of any organisation (they sign the health and death certificates for organisations)
Accountants are gate keepers between the producers of information and users of information

5. The Association of Chartered Certified Accountants (ACCA):
Some facts:
Global qualification - 72% of ACCA members and students are based outside the UK
In over 170 countries ACCA students sit the same exams and achieve the same qualification
ACCA has 362,000 students and 131,500 members, with a network of 82 offices and centres across the world
Accountants for business - 60% of ACCA members work in the corporate sector
Benefit to the profession - ACCA has 57 global accountancy partnerships around the world
Over the past year, more than 210,000 students registered for examinations online

6. ACCA’s approach to sensitize students to ethical and moral issues
To gain ACCA qualification comprises:
14 written exams
minimum three years of relevant professional experience, and
a Professional Ethics Module.

7. ACCA’s approach to ethics and moral competence
The ethics is integrated through the examined components in varying degrees.
The ethics content is examined in range of papers but one of the compulsory papers at Professional level called Professional Accountant specifically examines ethical and professional dilemmas through realistic case studies and discursive questions.
ACCA requires all the students to go through an Ethics Module which is done by students online.

8. Ethics Module and Integration of Ethics
Although the Module is not formally examined in a paper, its completion is compulsory and its content has direct relevance for most Professional level examinations in particular to Professional papers on Corporate Governance and Ethics and Audit and Assurance.

9. ACCA Five Ethical Principles
integrity,
objectivity,
professional competence
due care,
Confidentiality and professional behaviour
ACCA Rulebook contains the full text of these principles. ACCA emphasise legal compliance in different jurisdictions as well as compliance with ACCA fundamental principles for all its students, affiliates and members as it notes in the module, “as a human being, you and your ethics are shaped by your upbringing and your experience. As a professional accountant or student accountant, you are bound by the laws of your country, and all regulations that flow out of them. As an ACCA member, student, or affiliate, you are also bound by the fundamental principles of ACCA.” ACCA Professional Ethics Module.

10. Development of the accountant‘s dilemma
Based on the MJT methodology.
Related to accountant`s work life.
Two validation studies with ACCA students
MJT and Accountant dilemma (AJE)
1st. Part (June, 2007); N = 320
2nd. Part (Sept. 2008); N =200
Online survey (worldwide)

11. Moral Judgement Test C-score
Valid N
Mean
St. Dev.
MJT
318
16,8
13,9
Workers
29,9
21,9
Doctors
27,7
23,6

12. Moral judgement competence along the years of study

13. Moral judgement competence by age groups
N = 318; age (mean) = 33,4.

14. MJT C-score by working experience
Working experience or age alone are not responsible for fostering moral judgment competence.
Statistically significant inverse correlation between years of working experience and levels of moral judgment competence.

15. Accounting Dilemma
As a professional accountant, Jane faces a difficult situation. She has found out that her highly regarded manager, who had always supported her and has consistently acted with integrity, has been involved in suspicious activity. Jane discovered that he had created a series of small fictitious payables accounts within the purchase ledger, all of which remain wholly unsettled. She knows that she ought to report any irregularities. Yet, this could lead to the dismissal of her manager, ending a very promising accounting career. When checking the accounts again, she discovers that the ‘fictitious’ accounts have suddenly disappeared. After thinking it over, she decides to keep all this information to herself.

16. Accoutant’s Dilemma (cont.)
Students are then asked to choose the level of agreement or disagreement with Jane’s decisions on a 7 point scale with -3 as Strongly Disagree to 3 as Strongly Agree.
Students are then presented 6 arguments each Pro and Contra and are asked to choose on a 8 point scale to indicate whether each argument is accepted or rejected.
As a complement to the AJE, students are then asked to give their opinion about the nature of the problem: legal, personal, economic, ethical or political

17. Accounting Judgement Exercise
The accountant dilemma did not fulfil the validation criteria.
However, ACCA chose to use AJE in their module because the main objective of AJE as part of Ethics Module was to sensitize students to moral dilemmas faced in accounting context.
Ethics Module as it appears to students:

18. Analysis of AJE responses
Responses to AJE from 200 students are analysed
Students’ agreement or disagreement with Jane.
participants showed little sympathy with the decision of the actor in the dilemma-story (Jane). This might indicate that they do not conceive the story as a dilemma at all. Actually, more than 80% of the respondents said they disagree with Jane

19. Accountant´s dilemma (AJT) Opinion on how the dilemma was solved
I strongly disagree
I strongly agree

20. Legal or personal dilemma?

21. Political or ethical dilemma?

22. Analysis of qualitative responses
Out of 200 students whose AJE responses were analysed, 133 provided feedback on the question: What have you learned from this module?

23. Analysis of qualitative responses
A preliminary analysis of these responses shows that following few themes are recognised by the students:
Integration of ethics across curriculum
Ethics goes beyond laws and reinforces ‘public interest’ role for accountant
Many factors influence ethical behaviour (age, gender, country)
Ethics can be taught, framework for dealing with dilemma. Do they expect ready answers?

24. 1.Hierarchical preference order for the Kohlbergian stages

25. 2. Affective-cognitive parallelism

26. 3.Quasi-simplex structure

27. Conclusion
The analysis of responses to AJE shows that students prefer stage 4 and reject other higher or lower stages.
However, nearly 80% of students showing disagreement with Jane’s decision suggests that AJE does not seem to generate the moral conflict as would be expected from other MJT studies.

28. Conclusion
Literature review (not presented here) shows that there is growing need to bring ethical dilemmas into the accounting and business educational programmes
Global association of accounting bodies IFAC, has formally required all its affiliate bodies to ensure ethics is taught and assessed in their qualifications
Given the nature and scale of ACCA qualification ACCA needed to find a practical and effective way of integrating ethics in its qualification.
Initial response from the students to Ethics Module and Professional Accountant papers suggest that students appreciate this opportunity to engage with moral dilemmas in non-threatening academic setting provided by ACCA exams and assessment.

30. How to become Chartered Accountant through ACCA

31. Professional Experience
ACCA Accounting Qualification: An Overview of Professional Educational Framework
Design Syllabus
ACCA
Awarding
Body
Tuition
Providers:
Prepare
students
for exams
Student:
Writes exam
Professional Experience
Ethics Module
Conduct Exam
Quality Control
Online Ethics Module

34. Professional Accountant Paper