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Ethics Education in Accounting:

Moving Toward Ethical Motivation
and Ethical Behavior

Article in Journal of Accounting Education March 2003

DOI: 10.1016/S0748-5751(02)00017-9

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 J. of Acc. Ed. 21 (2003) 116
www.elsevier.com/locate/jaccedu

Main article

Ethics education in accounting: moving toward

ethical motivation and ethical behavior
Mary Beth Armstronga,*, J. Edward Ketzb, Dwight Owsenc
a
Accounting Area, College of Business, California Polytechnic State University,
San Luis Obispo, CA 93407, USA
b
MBA Oce, Smeal College of Business, 106 Business Administration Building,
The Pennsylvania State University, University Park, PA 16802-3000, USA
c
Department of Accounting, College of Business, Louisiana State University,
Baton Rouge, LA 70803-6304, USA

Received 1 January 2001; accepted 1 August 2002

Abstract
This paper reviews the literature on ethics education in accounting and utilizes Thornes
1998 Integrated Model of Ethical Decision Making to categorize that literature. The review
reveals a preponderance of work discussing moral development, which consists of sensitivity
and prescriptive reasoning, but a shortage of work addressing virtue, which consists of ethical
motivation and ethical behavior. Because of this deciency, the authors explore the potential
of exhortation and moral exemplars to increase ethical motivation among accounting students,
faculty, and practitioners.
# 2002 Elsevier Science Ltd. All rights reserved.
Keywords: Ethics education; Moral development

1. Introduction

One can hardly pick up a business publication today without noting some refer-
ence to an accounting scandal. Enron is only one dishonor to the profession, though
perhaps the best known; other recent accounting and auditing failures include
WorldCom, Microsoft, Peregrine Systems, Rite Aid, Sunbeam, Tyco, Waste Man-
agement, W.R. Grace, and Xerox, among many others. The sheer number of

* Corresponding author. Tel.: +1-805-756-2084; fax: +1-805-756-1473.

E-mail addresses: marmstro@calpoly.edu (M.B. Armstrong), k55@psu.edu (J.E. Ketz).

0748-5751/03/$ - see front matter # 2002 Elsevier Science Ltd. All rights reserved.
PII: S0748-5751(02)00017-9
2 M.B. Armstrong et al. / J. of Acc. Ed. 21 (2003) 116

accounting abuses serves as prima facie evidence that something more is needed in
terms of accounting ethics.1 What else needs to be done is less clear.
The objectives of this paper are twofold: rst, to utilize Thornes (1998) Inte-
grated Model of Ethical Decision Making as a framework to categorize the existing
literature in accounting ethics education as a guide to future researchers; second, to
draw attention to two elementsexhortation and moral exemplarsas particularly
helpful for accounting educators to realize one component of Thornes model, ethical
motivation.
Application of Thornes model helps identify topics that researchers have pursued
and directions for future research eorts. In addition to the two objectives listed
above, this paper discusses the strengths and weaknesses of various approaches to
teaching ethics in accounting (e.g. philosophical approaches, psychological approa-
ches, case studies, codes of conduct, virtue) as an aid to accounting instructors who
wish to integrate more ethics into their accounting courses.
The next section of this paper explains Thornes model. Sections three and four
catalog the accounting literature in ethics education into the major categories of
Thornes model, moral development and virtue. Section ve describes implemen-
tation issues and provides direction for future research, and the nal section of the
paper presents the conclusion.

2. Thornes model of ethical decision making

Thorne (1998) proposes a model that integrates James Rests Four-Component

Model of ethical behavior with the tenets of virtue ethics theory. The basic idea
behind Rests four-component model is that various (four) inner psychological
processes together give rise to outwardly observable behavior. The four processes,
briey, are as follows (Rest, 1986; Rest, Narvaez, Bebeau, & Thoma, 1999, p. 101):

1. Moral sensitivity: interpreting the situation, role taking how various actions
would aect the parties concerned, imagining causeeect chains of events,
and being aware that there is a moral problem when it exists.
2. Moral judgment: judging which action would be most justiable in a moral
sense.
3. Moral motivation: the degree of commitment to taking the moral course of
action, valuing moral values over other values, and taking personal respon-
sibility for moral outcomes.
4. Moral character: persisting in a moral task, having courage, over-coming
fatigue and temptation, and implementing subroutines that serve a moral goal.

1
Calls for teaching more ethics in accounting education have come from the American Assembly of
Collegiate Schools of Business (AACSB, 1988), the American Accounting Association (AAA, 1986), the
American Institute of CPAs (AICPA, 1988a), the Accounting Education Change Commission (AECC,
1990), the National Commission on Fraudulent Financial Reporting (NCFFR, 1987), and the white
paper jointly written by the largest accounting rms (Arthur Andersen & Co. et al., 1989).
 M.B. Armstrong et al. / J. of Acc. Ed. 21 (2003) 116 3

According to virtue ethics theory, virtues characterize the decision maker. Pos-
session and exercise of virtues tend to increase the decision makers propensity to
exercise sound ethical judgments. Virtues increase the likelihood that one will act in
accordance with ones ethical judgments. To use Aristotles wonderfully concise
description of personal characterWe are what we repeatedly do (Gough, 1998,
p. 5). Thorne observed that the rst two components of Rests model are primarily
intellectual in nature, while the last two components are intimately connected with
virtue. Thus, the two basic categories of Thornes model are moral development (the
cognitive acts of recognizing moral issues and thinking them through) and virtue
(the ethical motivation and intention to act morally and the ethical character to
bring that intention to fruition). Integrating Rests four-component model and vir-
tue ethics theory leads to Thornes Integrated Model, depicted in Fig. 1 (Thorne,
1998, p. 298).
Fig. 1 indicates that moral development and virtue are both required for ethical
behavior. Fig. 1 further suggests that moral development comprises sensitivity to the
moral content of a situation or dilemma and prescriptive reasoning, or the ability to
understand the issues, think them through, and arrive at an ethical judgment. Simi-
larly, virtue comprises ethical motivation, which describes an individuals willingness
to place the interests of others ahead of his or her own, and ethical character.
According to Pincos (1986, p. 91), moral virtues are those attributes of character
that describe an individuals direct concern for others; therefore, Fig. 1 shows ethical
motivation as a moral virtue. Pincos (1986, p. 84) also indicates that instrumental
virtues make it more probable that a person will be successful in pursuing goals,
ends, or objectives. Hence, according to Thorne (1998, p. 299), the integrative
perspective suggests that an individuals ethical character is a reection of his or her
instrumental virtue. Appropriate cognitive activity, including sensitivity to ethical

Fig. 1. Thornes integrated model of ethical decision making.

4 M.B. Armstrong et al. / J. of Acc. Ed. 21 (2003) 116

issues and prescriptive reasoning, leads to ethical judgment. Thorne combines this
with virtue to result in ethical behavior. But virtue consists of two elements: moral
virtue and instrumental virtue. The ethical intention to act on behalf of others is a
moral virtue. Instrumental virtue, which includes items such as courage and for-
titude, helps enable the individual to achieve his or her intentions.
Note that Fig. 1 contains a two-headed arrow between understanding and
moral virtue. According to Thorne (1998, p. 299) that arrow is:

. . .used to depict the reexive nature of the association between these two con-
cepts. Although not inconsistent with cognitive-development theory, the nature
of this association largely reects a virtue-ethics emphasis which accepts that
virtuous individuals possess both the understanding of what is good and the
desire to be good. . . Hence, the integrated perspective explicitly acknowledges
that an individuals prescriptive understanding of an ethical dilemma is integral
to his or her desire and ability to act virtuously, and that an individuals ethical
character is integral to his or her prescriptive understanding of an ethical
dilemma.

Thorne categorizes research on auditors ethical decision-making according to her

integrated framework. By doing so she can identify which parts of the model
researchers have insuciently examined. This paper utilizes a similar approach,
categorizing ethics education in accounting and identifying parts of the framework
that are less well examined.2 In addition, this paper advocates the use of exhortation
and moral exemplars to enhance moral motivation in accounting students.

3. Moral development

According to Thornes integrative model, sensitivity and prescriptive reasoning

are components of moral development. This paper, therefore, divides the literature
review into those two categories.

3.1. Sensitivity

The ethical decision process begins when the decision-maker recognizes that a
particular situation will aect the welfare of others, and thereby identies the moral
content of the issue. Before one can act ethically, one must understand that an
ethical issue exists. Fulmer and Cargile (1987) and Armstrong (1993b) illustrate this
approach.
Fulmer and Cargile (1987) report the results of an empirical study that showed
accounting students who had been exposed to the AICPAs Code of Professional

2
Some important works in accounting ethics education do not t well into Thornes model. These
include Armstrong (1993a), Armstrong and Mintz (1989), Cohen and Pant (1989), Ingram and Peterson
(1989), Karnes and Sterner (1989), Loeb (1988, 1991), and Mintz (1990, 1997).
 M.B. Armstrong et al. / J. of Acc. Ed. 21 (2003) 116 5

Conduct perceived ethical issues more frequently than other business students in a
given scenario. Even though the accounting students perceived ethical issues more
frequently, there were no signicant dierences in the actions chosen by accounting
students and other business students. Simple exposure to ethical issues may be
necessary, but not sucient, to change students ethical behavior (the basic tenant of
Rests four-component model).
Armstrong (1993b) reports the results of an intervention in ethics and profession-
alism (E&P). She nds a statistically signicant dierence in changes in DIT P3
scores among students who took the E&P course over those in a control course in
intermediate accounting. She also reports an interactive eect that indicates the E&P
course combined with previous classes in ethics is particularly eective in predicting
moral-reasoning maturation. Consequently, Armstrong advocates a sandwich
approach that consists of a general course in ethics, followed by a variety of
accounting courses in which case studies and homework problems help students spot
ethical issues and reinforce good ethical reasoning. A capstone course in ethics and
professionalism taught by accounting faculty would complete the sandwich. The
Armstrong study ts in both components one and two of Thornes model because of
the emphasis on using the sandwich approach to increase students awareness of
ethical issues and to increase their moral reasoning ability.

3.2. Prescriptive reasoning

The second component of Thornes model, prescriptive reasoning, leads to ethical

judgment and is the critical-thinking component of the model and the component
that has received the most attention by academic accountants. Several approaches to
teaching prescriptive reasoning have been advocated in the literature: the psychol-
ogy of moral development, classical philosophical theories, case analyses, codes of
conduct, and virtue.
We make a distinction between normative ethics (what one should do) and
descriptive ethics (how people, in fact, make moral decisions). For centuries, philo-
sophers have investigated questions of good and bad, right and wrong, so their
theories are typically normative. Kohlberg (1984), Rest (1986) and Gilligan (1982),
all developmental psychologists, are more concerned with nding out how people
actually make moral choices than with philosophical issues, such as what one should
do. Their work is empirical and descriptive; hence, their work is more relevant to
accounting researchers than to accounting educators.4
Several textbooks in accounting ethics (Armstrong, 1993a; Epstein and Spalding,
1993; Mintz, 1992) present classical normative ethical theories to construct a foun-
dation for applying ethics to accounting. Typically included are the theories of ego-
ism, utilitarianism, and deontology. Understanding these theories can be benecial

3
Rests Dening Issues Test (DIT) results in a P score which measures the percentage of time
respondents utilize stage 5 or 6 reasoning (principled reasoning) in choosing solutions to given scenarios.
4
Some authors (Rest, 1986, pp. 8186; Armstrong, 1993a, pp. 7981) advocate teaching the theories of
moral development to students, while others disagree (Rest et al., 1999, pp. 932; Shaub, 1994b, pp. 129143).
6 M.B. Armstrong et al. / J. of Acc. Ed. 21 (2003) 116

to students because they encounter the theories in their business courses without
necessarily realizing it. For example, students are exposed to the theories of Adam
Smith in their economics classes. Students may erroneously conclude from such
classes that always acting in ones own self interest is not only allowed, but prefer-
able because doing so ultimately works to maximize societys interests. A discussion
of egoism should point out that Adam Smiths assumption that people act in their
own self interest is just that-a model assumption. He made neither a normative
statement (e.g. people should act in their own self interest) nor an empirical
statement (e.g. people do act in their own self interest).
Similarly, teachers may expose students to utilitarian concepts without students
realizing it. For example, accountants frequently invoke cost/benet methods into
their discussions and evaluations of various topics. Utilitarianism rests on the idea
that the ends justify the means, but this is logically equivalent to the notion that one
should engage in projects in which the benets exceed the costs.
Deontology, on the other hand, focuses on moral obligation, rights and duties,
and examines the act itself, not just the consequences of the act. Students are intro-
duced to deontological concepts in accounting courses, because emphasis in
accounting is on principles (e.g. matching and revenue recognition) and the right
way to do it, regardless of the consequences.
The danger of teaching these classical ethical theories is that students may be left
with the impression that they are equally appropriate or always morally justiable.
Worse, students may adopt an air of theoretical agnosticism and conclude that each
theory is as irrelevant as the next. If instructors nonetheless teach these theories to
students, the instructors should explain the strengths and weaknesses of each. For
example, some argue that egoism is not a moral concept since it denies a premise
that most consider essential to all moral concepts, that self-sacricing behavior
(when warranted) is required. Utilitarianism, which seeks to bring about the greatest
good for the greatest number has no way of protecting minority interests; thus, for
example, a logical utilitarian argument could be constructed for slavery.
Langenderfer and Rockness (1989) propose the use of short cases, using an eight-
step model as the tool for analysis. They further advocate integrating these cases
throughout the accounting curriculum. Langenderfer and Rockness emphasize that
such an approach does not replace ethics classes, but augments them. Armstrong
(1990) critiques Langenderfer and Rocknesss eight-step method because the model
attempts to blend deontological considerations with utilitarian considerations (a
strength), but ultimately consequences (utilitarian considerations) dominate the
choice (a weakness). While the role of individual cases to instruct students in
accounting ethics appears essential, thought must be given to the selection of the
paradigmatic cases that serve to best illustrate the ethical principles (e.g. integrity,
objectivity) that the community of accountants has chosen as essential to moral
practice.
Several authors have advocated teaching professional guidance such as the
AICPA (2002) Code of Professional Conduct and the AICPA (2000) Statements on
Standards for Tax Services. The danger exists that instructors might teach this
material as an end in itself, rather than as a means of understanding professional
 M.B. Armstrong et al. / J. of Acc. Ed. 21 (2003) 116 7

responsibilities. For example, the rules section of the AICPA Code is a bit proble-
matic. To focus on the rules is to invite a rigid understanding of professional
responsibilities, devoid of professional judgment and available for loopholing and
hair splitting. At the same time, the profession as a whole suers irreparable damage
when the public learns about an excess of 8000 violations of independence rules
committed by one large accounting rm (SEC, 1998b). Professionals who under-
stand ethical principles, such as independence, without appreciating a need to
understand the rules on independence as well, can lead to wide-spread violations,
even assuming well-intentioned individuals.
An alternative approach to teaching detailed rules, such as independence rules,
might be as follows: after a careful analysis of the need for independence, the inde-
pendence concept and certain key cases involving independence, an instructor might
assign a few scenarios involving independence and ask the students to form small
groups to discuss the scenarios and determine whether or not, in each case, inde-
pendence was impaired. As a follow-up, teachers could assign students to research
the answers in an electronic data base of independence rules (AICPA or SEC), then
write a short paper discussing the dierences between their group judgments about
independence in given cases and the guidance they found in ocial sources. Such an
assignment combines group work, research skills, critical thinking skills, writing,
and ethics. It treats the rules as something that the students should be able to
research, because compliance is important to the profession, but does not treat the
rules as answers or ends in themselves.
Some recent authors have advocated teaching students about virtue, as opposed to
attempts to increase virtue, which the paper discusses in the next section. For
example, one might teach Pincos (1986) classications of virtues, or the fact that
MacIntyre (1984) considers virtue to be the means of achieving excellence in a
profession. Teaching Pinco s theories or MacIntyres theories about virtue would
be cognitive exercises, but are not necessarily intended to increase virtue in stu-
dents. Rather, such teaching is intended to increase students understanding of
virtue.
Dobson and Armstrong (1995, pp. 189190) advocate the use of virtue ethics
theory in accounting ethics education and describe four basic attributes of the the-
ory: generally accepted virtues, an active community, sound moral judgment, and
moral exemplars or role models. Mintz (1995) describes virtue theory, especially as
understood by Pincos (1986), and then discusses the virtues in accounting and
pedagogical considerations related to virtue ethics. In addition to advocating peda-
gogies that might increase virtue, Mintz (1995, p. 260) analyzes the virtues in
accounting that he believes are linked to requirements of professional codes of con-
duct, namely trustworthiness, benevolence, altruism, honesty, integrity, impartiality,
open-mindedness, reliability, dependability, and faithfulness.
In a later paper, Mintz (1996) again addresses the role of virtue in accounting
education. He explains the concept of virtue, relying more heavily on MacIntyre
(1984) than Pincos (1986), as he did in 1995, and the role of virtue in the accounting
profession. Mintz then gives a case study of how he incorporates virtue considerations
into an introductory nancial accounting course. He also provides guidelines that
8 M.B. Armstrong et al. / J. of Acc. Ed. 21 (2003) 116

may be useful in determining whether accounting students are successfully learning

about virtue.5

4. Virtue

The second category in Thornes 1998 model is virtue, which consists of two
components: ethical motivation/intention and ethical character/behavior. The paper
next examines each of these components.

4.1. Ethical motivation/intention

Pincos (1986) denes moral virtue as the positive attribute of character that
describes an individuals direct concern for the interest of others despite personal
risks (Thorne, 1998, p. 298). According to Rest (1986), ethical motivation is the
degree of commitment to taking the moral course of action, placing moral values
over other values, and taking personal responsibility for moral outcomes (Thorne,
1998, p. 298). Thorne (1998, p. 298) blends the two as follows: An integrated view
suggests that an individuals ethical motivation is a reection on his or her moral
virtue. This, in turn, suggests that individuals which are morally virtuous are more
motivated in their intention to act ethically than less morally virtuous individuals.
Gough (1998, p. 142), a professor of ethics and philosophy, exhorts his students
and readers to take charge of personal ethics in their everyday lives and to develop
virtuous character traits, which will ultimately lead to personal fulllment and
mastery of ones own destiny. His formula for achieving ethical excellence is as
follows:

Thoughts ! Act ! Habit ! Character ! Destiny

Gough distinguishes between character (ones ethical self) and personality (ones
psychological self). He concedes that psychologists may be correct when asserting
that ones personality changes little in life, but dismisses this fact when it comes to
ethics because ones character is malleable. He then develops four main points (1998,
p. 10):

(1) You, like all human beings have the capacity to determine who you are or
what you want to beor should beover and above what you are by nature.
(2) What you are in your essence has an inescapable ethical dimension. (3) You
have the innate ability to choose to be good. (4) In sum, when it comes to the kind
of person you are, you and you alone ultimately determine your own destiny.

5
Additional articles and books devoted to the prescriptive reasoning component of Thornes model
are Albrecht (1992), Armstrong (1987), Brooks (1995, 2000), Epstein and Spalding (1993), Hiltebeitel and
Jones (1991), Huss and Patterson (1993), Lampe and Finn (1994), Loeb (1990), Magill and Previts (1991),
Ponemon (1993), Ponemon and Glazer (1990), Shaub (1994a, 1994b), Sisaye (1997), and Windal (1991).
 M.B. Armstrong et al. / J. of Acc. Ed. 21 (2003) 116 9

Gough proceeds to amplify these claims in his book through various arguments and
anecdotes, the focus pivoting on the idea that we become better individuals by acting
in an ethical manner. Gough encourages his readers and his students to practice
good behavior. Because virtues are good habits, the repeated doing of good actions
leads to advances in moral character.
Following Gough, accounting educators should attempt consciously to instill in
students a sense of pride in the accounting profession and a desire to live up to the
highest ideals embodied in the notion of professionalism. While Gough animates his
readers and students to achieve virtues necessary to lead the good life, accounting
faculty could exhort students to acquire the virtues necessary for excellence in the
practice of accounting (e.g. objectivity, integrity, truth-telling, professional skepti-
cism). Stewart (1997) urges the use of narrative to enhance moral motivation and
encourages accounting faculty to relate professional responsibilities to such works as
Robert Penn Warrens All the Kings Men, Harper Lees To Kill a Mockingbird, and
John Grishams The Firm.
Example is another (silent) means of exhortation. As Dobson and Armstrong
(1995, p. 199) point out: This pursuit of personal excellence is only possible within
a polis6: a community that nurtures such pursuit. Often the accounting students
rst encounter with the accounting profession consists of interaction with its aca-
demic branch. The academic accounting community becomes the polis necessary for
the virtues to ourish, and the professors lead the students in that polis. Students
observe what their instructors do and how they comport themselves. If students
perceive that their teachers care about others and live honestly and forthrightly, they
will comprehend the tacit lesson to live in the same way. If students notice instruc-
tors succeeding by backstabbing, by not keeping promises, by mistreating others
(including students), or by not conscientiously fullling their teaching responsi-
bilities, they will denigrate ethics, regardless of what the professor may say.
Dobson and Armstrong (1995, p. 192) also describe the essential role played by
moral exemplars, or role models, or white-hat accountants. They point out that:
The role of exemplars is critical for the application of virtue ethics because it is
from these individuals that the virtues are disseminated throughout the profession.
One could utilize dilemmas in the rst two components of Thornes model to help
increase students moral sensitivity and reasoning skills. An educator also might
employ accounting horror stories, or actual cases where the accountant in prac-
tice did the wrong thing. These horror stories also might provide students with the
motivation to avoid these errors in their own ethical situations. For example, one
might illustrate the unethical behavior by accountants in the Phar Mor fraud (SEC,
1996), the Sensormatic Electronics case (SEC, 1998a; Ketz and Miller, 1998), and
others found in the nancial press, and thus enhance students ability to reason
eectively or spot ethical issues more eectively. On the other hand, positive exam-
ples will enhance students pride in the heroes of the profession and increase their
motivation to emulate them. As DeMarco points out (1996, pp. 1314), it is insu-
cient to eliminate vice, and so one must also cultivate virtue.

6
Originally signied an ancient Greek city-state. Used here to signify any community of people.
10 M.B. Armstrong et al. / J. of Acc. Ed. 21 (2003) 116

Trying to become virtuous merely by excluding vice. . . is as unrealistic as trying

to cultivate roses solely by eliminating weeds. After clearing the garden of
weeds, one must still plant seeds or cuttings and nurture their growth; other-
wise, the weeds simply return. The best way to exclude vices is to crowd them
out with the presence of strong virtues.

Knapp, Louwers, and Weber (1998) published an article titled Celebrating

Accounting Heroes: An Alternative Approach to Teaching Ethics. Discussion of
individuals who carried out ethically sound actions provides good examples to stu-
dents and might encourage them to act similarly when they face ethical challenges.7

4.2. Ethical character/behavior

The fourth component of Thornes model is ethical character, which leads to

ethical behavior. Thorne (1998, pp. 298299) notes,

According to the cognitive-developmental perspective, an individuals ethical

character aects his or her willingness and ability to act in accordance with his
or her ethical intention. According to virtue ethics theory, the property of
character critical to an individuals ability to implement his or her ethical
intention is instrumental virtue. Hence the integrative perspective suggests that
an individuals ethical character is a reection of his or her instrumental virtue.

Rest et al. point out (1999, p. 101) that courage is an essential virtue in component
four. Courage enables one to go from ethical intention to ethical behavior. MacIn-
tyre (1984, p. 191) identies courage as essential for all practices, stating that, We
have to be prepared to take whatever self-endangering risks are demanded along the
way [to excellence]. Other instrumental virtues for example, perseverance, might
also be needed to cause ethical intentions to result in ethical behavior.
Loeb (1988) discusses the goals of ethics education in accounting, including one to
set the stage for a change in ethical behavior. He does not go so far as to imply
accounting educators have the power to bring about good or bad behavior on the
part of students. Indeed, this fourth component is probably beyond accounting
educators abilities. Educators set the stage for ethical behavior by increasing
moral sensitivity, moral reasoning and moral motivation, but students must take
that last step themselves. To do so, they must acquire the necessary instrumental
virtues (e.g. courage, fortitude, perseverance), and such virtues are acquired
through practice and repetition, while the individual is sustained and encouraged in
a nurturing community. Whatever accounting educators can do to provide such a
nurturing community is helpful, but eventually academia will turn the students
over to the larger accounting community to continue the work begun at the col-
legiate level.

7
Additional articles relating to Thornes third component are Douglas, Barker, and Schwartz (1995)
and Mintz (1995).
 M.B. Armstrong et al. / J. of Acc. Ed. 21 (2003) 116 11

Dirsmith and Ketz (1987) describe how they engaged students in a discussion of
integrity. Dirsmith and Ketz gave students an intermediate accounting exam and
arbitrarily added ten points or decreased by 10 points students scores, while leaving
some scores unchanged. The authors nd that most students with 10 fewer points
than they deserved asked for an adjustment, while none of the students who had 10
undeserved points reported the error. When the students learned of this behavior,
they were particularly energized to debate the issue of integrity in a concrete,
immediate, and relevant setting.

5. Directions for future research

Thornes model of ethical decision-making encapsulates moral development and

virtue. Within the model, moral sensitivity and moral judgment compose moral
development, while virtue comprises moral motivation and moral character. The
literature review indicates that accounting education researchers have primarily
focused on ethical judgments and the prescriptive reasoning process. The primary
inference of this paper is that accounting education researchers should place greater
emphasis on the other three aspects of ethical decision-making (sensitivity, motiva-
tion, and character), for they might provide avenues for improvements in ethical
decision-making.
In terms of moral sensitivity, there is a need to identify cues that accounting
professionals and students employ to help them spot the ethical content in issues
they face. What societal and institutional factors help or hinder the development
of moral sensitivity? What psychological traits lead to greater moral sensitivity
and can students learn these traits? How can educators help enhance students
moral sensitivity? Perhaps there are even greater research opportunities to investi-
gating ethical motivation and ethical character. Empirical researchers can examine
variables that inuence motivation and lead to ethical behavior. While this facet
may be dicult to study, especially with respect to dierentiating empirically the
four components in Thornes model, such research would assist educators and
others in the profession to improve ethical decision making. These studies would
include testing the ecacy of exhortation, exemplars, faculty, and professional
mentors.
This paper has identied some implementation issues for accounting faculty
throughout the body of the paper and many of those issues are highlighted here:

 Increasing moral sensitivity is a necessary but insucient ingredient for

increasing moral behavior (Fulmer & Cargile, 1987).
 Armstrongs (1993b) education intervention was successful in increasing pre-
scriptive reasoning and the greatest increases took place among students with
prior exposure to ethics classes. Hence, she advocates a sandwich approach
whereby ethics cases are integrated throughout the accounting curriculum
and students take a general ethics course early in their academic careers as
well as a capstone course in accounting ethics.
12 M.B. Armstrong et al. / J. of Acc. Ed. 21 (2003) 116

 Exposing students to ethical theories might help students recognize the the-
ories when they encounter those theories, often as underlying assumptions, in
their coursework
 The paper discusses the need to develop paradigmatic cases to best illustrate
ethical principles in accounting, such as the public interest, independence,
integrity, and objectivity.
 Usage of exemplars, both good and bad, might contextualize the issues for
students and provide role models to emulate (or villains not to follow).
Unfortunately, few papers explore personalities within accounting; thus,
there is a need to research and publish biographies of accountants and those
who use or misuse accounting.
 Another issue within the university setting is for faculty to model good pro-
fessional behavior.8 Such modeling is an example of silent exhortation.
Because accounting faculty are often the rst accounting professionals to
whom students are exposed, the university provides a natural setting for stu-
dents to observe and to imitate the faculty and thereby model professional
behavior.
 Research studies might examine how faculty members make ethical decisions
and the extent to which students reproduce their behaviors.
 Exhortation ought not be limited to role modeling. Urging students to aspire
to professional ideals and a life well lived, as Gough (1998) does, can be
achieved through direct exhortation or use of novels, case studies (especially
cases involving virtuous accountants), or other creative means.

An interesting issue for both teaching and research is whether certain teaching
methods are better suited for particular areas of ethics content in accounting (e.g.
ethical theories or content of codes of conduct) or for teaching any particular com-
ponent in Thornes model. For example, do case studies, role-playing exercises, or
guest lectures by accounting professionals increase moral motivation? Which teach-
ing methods best convey ethical content? One also can extend this explication into
an investigation of the nexus among ethics content, method, and course, given that
educators can teach ethics in stand-alone non-accounting and accounting ethics
courses, within a variety of accounting course, in a capstone course, or in some
combination.

6. Conclusion

This paper has examined the literature pertaining to ethics education in account-
ing and has categorized it according to Thornes Integrated Model of Ethical Decision-
Making. Table 1 summarizes that categorization and reveals that the majority of the
literature reviewed pertains to the rst category of Thornes model, moral development,

8
If faculty make unethical decisions and serve as poor role models, then academia unwittingly may be
contributing to the accounting and auditing failures that are reported in the business and popular press.
 M.B. Armstrong et al. / J. of Acc. Ed. 21 (2003) 116 13

Table 1
Literature review of ethics in accounting education

Component of decision Ethical process Research studies and texts

Moral development
Sensitivity ! Identication of Armstrong (1993b); Dirsmith & Ketz (1987);
dilemma Fulmer & Cargile (1987)

Prescriptive Reasoning ! Ethical Judgment Albrecht (1992); Armstrong (1987, 1990, 1993a, 1993b);
Brooks (1995, 2000); Dobson & Armstrong (1995);
Epstein & Spalding (1993); Hiltebeitel & Jones (1991);
Huss & Patterson (1993); Lampe & Finn (1994);
Langenderfer & Rockness (1989); Loeb (1990);
Magill & Previts (1991); Mintz (1990, 1995, 1996, 1997);
Ponemon (1993); Ponemon & Glazer (1990);
Shaub (1994a, 1994b); Sisaye (1997); Windal (1991)

Virtue
Ethical Motivation ! Ethical Intention Dirsmith & Ketz (1987); Dobson & Armstrong (1995);
Douglas, Barker, & Schwartz (1995);
Knapp, Louwers, & Weber (1998); Mintz (1995);
Stewart (1997)

Ethical Character ! Ethical Behavior Dirsmith & Ketz (1987); Ponemon (1993)

but not as much emphasis is given to virtue, the second category of the model. Even
within the rst category, the two components are not equally addressed. Accounting
researchers should explore ways to enhance sensitivity of accounting students, per-
haps utilizing models such as Bebeaus (1994) in dentistry. The preponderance of
research is found to be in the second component of Thornes model, prescriptive
reasoning.
The paper emphasizes a need to further explore ways of enhancing moral moti-
vation, component three of Thornes model. To increase accounting students moral
motivation, the paper recommends exhorting students to good behavior, pointing
out that they, indeed, are masters of their moral selves, and encouraging them to
take pride in their profession. The paper also advocates the use of accounting
exemplars to help instill moral virtues in accounting students. Finally, the paper
urges all accounting faculty to recognize that they also play an important part in
their students moral maturation. Accounting faculty are the leaders of that branch
of the accounting community to which students are rst exposed, the academic
accounting community. As such, they are responsible for setting the moral tone of
the community and providing a nurturing environment in which ethical motivation
and ethical behavior can ourish. As explained in the paper, directly enhancing
students ethical behavior is probably beyond the scope of academic accountants.
Finally, the paper addresses implementation issues and directions for future
research.
14 M.B. Armstrong et al. / J. of Acc. Ed. 21 (2003) 116

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