Transcript MOSAIC Conference, University of Konstanz, July 2009

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
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Presentation plan
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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
Introduction and aims
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Accounting profession and importance of
ethics and moral judgment competence
Primary aims are:
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Describe ACCA’s approach to ethics/moral
competence
Discuss the results from AJE
Raise questions for future research
Accounting profession and importance of ethics
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Role of accountants in society
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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
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
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ACCA’s approach to sensitize students to ethical
and moral issues
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To gain ACCA qualification comprises:
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14 written exams
minimum three years of relevant professional
experience, and
a Professional Ethics Module.
ACCA’s approach to ethics and moral
competence
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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.
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.
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ACCA Five Ethical Principles
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integrity,
objectivity,
professional competence
due care,
Confidentiality and professional behaviour
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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.
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Development of the accountant‘s
dilemma
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Based on the MJT methodology.
Related to accountant`s work life.
Two validation studies with ACCA students
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MJT and Accountant dilemma (AJE)
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1st. Part (June, 2007); N = 320
2nd. Part (Sept. 2008); N =200
Online survey (worldwide)
Moral Judgement Test C-score
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C-score
Valid N
Mean
St. Dev.
MJT
318
16,8
13,9
Workers
318
29,9
21,9
Doctors
318
27,7
23,6
Moral judgement competence along
the years of study
MJT C-score by educational level (examlevel)
Current effect: F(3, 277)=,15483, p=,92652
Effective hypothesis decomposition
Vertical bars denote 0,95 confidence intervals
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35
30
MJT C-score
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20
15
10
5
0
1/2
12
2
2/3
EXAM_LEVEL
3
Moral judgement competence by age
groups
Moral Judgment competence and age
Current effect: F(2, 315)=3,1129, p=,04584
Effective hypothesis decomposition
Vertical bars denote 0,95 confidence intervals
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MJT C-score
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25
20
15
10
5
0
<29
>28<40
>39
Age_groups
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N = 318; age (mean) = 33,4.
MJT C-score by working experience
Moral judgment competence by working experience
Current effect: F(2, 315)=9,4942, p=,00010
Effective hypothesis decomposition
Vertical bars denote 0,95 confidence intervals
Working experience or age alone
are not responsible for fostering
moral judgment competence.
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MJT C-score
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Statistically significant inverse
correlation between years of
working experience and levels of
moral judgment competence.
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20
15
10
5
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< 5 years
> 4 and <16 years
Working experience
> 15 years
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.
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Accoutant’s Dilemma (cont.)
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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
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:
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Analysis of AJE responses
Responses to AJE from 200 students are
analysed
Students’ agreement or disagreement with
Jane.
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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
Accountant´s dilemma (AJT)
Opinion on how the dilemma was solved
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I strongly
disagree
I strongly
agree
Legal or personal dilemma?
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Political or ethical dilemma?
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Analysis of qualitative responses
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Out of 200 students whose AJE responses
were analysed, 133 provided feedback on
the question: What have you learned from
this module?
Analysis of qualitative responses
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A preliminary analysis of these responses
shows that following few themes are
recognised by the students:
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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?
1.Hierarchical preference order for the
Kohlbergian stages
Accountant's dilemma
Preference order for the Kohlbergian stages
(ACCA 1st. Study)
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MJT (Moral Judgement Test)
Preference order for the Kohlbergian stages
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(ACCA 1st. Study)
Mean
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-1
2
-2
1
-3
0
-4
SUACST1
SUACST3
SUACST2
SUACST5
SUACST4
SUACST6
Mean
-1
Accountant's dilemma
Preference order for the Kohlbergian stages
-2
(ACCA 2nd. Study)
2,5
-3
2,0
1,5
-4
1,0
0,5
Mean
-5
-6
0,0
-0,5
SUST1
SUST2
SUST3
SUST4
SUST5
SUST6
-1,0
-1,5
-2,0
SUACST1
SUACST3
SUACST2
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SUACST5
SUACST4
SUACST6
2. Affective-cognitive parallelism
Accountant's dilemma 1
Correlation between moral judgment competence and stages of moral orientation
(ACCA 1st Study)
0,5
0,4
0,3
0,5
0,4
0,2
Correlation with C-score (AJT)
MJT
Correlation between moral judgment competence and stages of moral orientation
(ACCA 1st Study)
0,1
0,0
-0,1
Correlation with C-score (MJT)
-0,2
0,3
-0,3
0,2
-0,4
SUACST1
SUACST3
SUACST2
0,1
SUACST5
SUACST4
SUACST6
Stages of moral orientation (Kohlberg)
0,0
Accountant's dilemma 2
Correlation between moral judgment competence and stages of moral orientation
(ACCA 2nd. Study)
-0,1
0,5
-0,2
0,4
-0,3
-0,5
SUST1
SUST2
SUST3
SUST4
SUST5
Stages of moral orientation (Kohlberg)
SUST6
Correlation with AJT C-score
0,3
-0,4
0,2
0,1
0,0
-0,1
-0,2
-0,3
-0,4
SUACST1
SUACST3
SUACST2
SUACST5
SUACST4
Stages of moral orientation (Kohlberg)
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SUACST6
3.Quasi-simplex structure
Accountants' dilemma 1
Factor loadings of the six moral orientations.
Principled component analysis, varimax rotation (quasi-simplex structure)
(ACCA 1st Study)
0,9
ACST6
ACST4
0,8
0,7
Moral Judgment Test (MJT)
Factor loadings of the six moral orientations.
Principled component analysis, varimax rotation (quasi-simplex structure)
(ACCA 1st. Study)
ST5
Factor 2
0,9
0,6
ST6
0,5
0,4
0,3
0,8
ACST5
0,2
0,7
ST4
ACST3
0,1
0,0
0,0
0,6
0,1
0,2
0,3
Factor 2
0,5
0,6
0,7
0,8
0,9
Factor 1
0,5
ST3
0,4
Accountants' dilemma 2
Factor loadings of the six moral orientations.
Principled component analysis, varimax rotation (quasi-simplex structure)
(ACCA 2nd. Study)
0,3
0,2
ST2
Rotation: Varimax normalized
Extraction: Principal components
0,1
0,9
ST1
ST6
ST4
0,8
0,0
0,7
0,6
0,0
0,1
0,2
0,3
0,4
0,5
Factor 1
0,6
0,7
0,8
0,9
0,5
1,0
Factor 2
-0,1
-0,1
0,4
ACST1
ACST2
0,4
0,3
ST5
ST3
0,2
ST2
0,1
0,0
ST1
-0,1
-0,2
0,0
0,1
0,2
0,3
0,4
0,5
Factor 1
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0,6
0,7
0,8
0,9
Conclusion
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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.
Conclusion
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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.
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How to become Chartered Accountant through ACCA
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ACCA Accounting Qualification: An Overview of Professional
Educational Framework
Design Syllabus
ACCA
Awarding
Body
Student:
Writes exam
Professional Experience
Ethics Module
Conduct Exam
Quality Control
Online Ethics Module
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Tuition
Providers:
Prepare
students
for exams
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Professional Accountant Paper
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