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Will incorporating ethics into the accountancy curriculum reduce the
Will incorporating ethics into the accountancy curriculum reduce the
incidence of financial scandals?
Address for Correspondence:
Dr Esinath Ndiweni
Cardiff School of Management
University of Wales Institute, Cardiff
Colchester Avenue Campus
Cardiff CF23 9XR
Telephone: +44 (0)29 20417322
Fax:
+44 (0)29 20416940
E-mail: [email protected]
Will incorporating ethics into the accountancy curriculum reduce the
incidence of financial scandals?
Abstract
Recent financial scandals have focused attention on the contributory and preventative roles of
accountancy education and training. The paper attempts to evaluate whether incorporating ethics into
the accountancy curricula is likely to mitigate financial scandals. It achieves this through a review of
current literature on accounting and ethics. It complements the review with empirical evidence
gathered from an examination of undergraduate accountancy curricula in four universities in the UK
and two in Zimbabwe.
The emphasis in the paper is on analysing, accountancy education within its socio-economic, political
and institutional contexts. It argues that institutional contexts have a role in shaping our understanding
of ethics. Similarly, accountants’ ethics are a product of the prevailing socio-economic, political and
cultural institutions and therefore compatible with the overall ethos of a particular society. The paper
questions the efficacy of a Eurocentric ethical framework when applied to other cultures such as in
Asia, the Arab world and Africa. The implementation of ethics on a global scale is bound to evoke
different meanings as individuals construct their social realities. The paper concludes by suggesting
that critical approaches to the teaching of accounting courses might help learners develop critical
thinking skills so that their ethical judgements result from a critical evaluation of situations other than
following some abstract international code of ethics.
Key words: accounting education, ethics, critical thinking, critical accounting
2
Introduction
The repercussions from financial scandals such as Enron in the US and Parmalat in Europe
are still echoing through the corridors of the accountancy profession. Some commentators
have attributed corporate scandals to a gradual erosion of professional and ethical standards
and an abrogation of public in favour of private commercial interests (Briloff, 2001; Mayer,
2002; Wyatt, 2004). Most infamously, accounting practices at Enron and Parmalat provide
evidence of unethical behaviour by some accountants. This has led to widespread questioning
of accountants’ ethics and the role of regulators, the profession and academia.
In response, governments have put in place enhanced regulatory regimes designed to restore
confidence in the capital market system such as the US Sarbanes-Oxley Act 2002 and the
newly established Public Company Accounting Oversight Board (PCAOB). The UK
revamped the accounting oversight institutions and created the Professional Oversight Board
for Accountancy (POBA), also in 2002. POBA has recently completed a review of
accountancy training and education aimed at restoring confidence in the profession (POBA,
2005). However, and perhaps surprisingly, this review specifically excluded the role of ethics
in accountancy training.
The accountancy bodies have responded to financial scandals by revising their ethical codes
and introducing more topics on ethics in their professional examinations (see for example
APB 2004; IFAC 2005; CIMA 2006, ACCA 2007). Whilst these measures might reduce the
conflict between private and public interests, they may address the symptoms rather than the
causes of unethical behaviour.
The focus of this paper is to examine, how and to what extent accounting academics and
education systems have responded to the ethical challenges highlighted by recent financial
3
scandals. Just like accountancy, further and higher education is a globalised activity and my
exploration takes a similar perspective. The paper also evaluates the potential efficacy of
incorporating ethics into the accountancy curricula in improving professional conduct, while
at the same time questioning the basis of our ethical framework.
The paper is divided into five further sections. The next explores the concept of ethics and
perceptions of it amongst accountants. The third section interrogates academic accounting
research on ethics. In section 4 the accountancy curricula in further and higher education
institutions is examined to determine the extent to which ethics is addressed. Section 5
analyses and discusses the themes from the literature and links these with the findings from
the review of the curriculum. The sixth section concludes by proposing an alternative way of
resolving ethical dilemmas in accounting through the adoption of critical approaches to the
teaching of accountancy at institutions of higher education.
Conceptualisations of ethics
The Oxford English dictionary defines ethics as a set of moral values or principles held by an
individual/group. This suggests that conceptualisations of ‘ethics’ are socially and culturally
dependent. There are a variety of approaches to what constitutes ‘ethics’, a subject addressed
by moral philosophers since Classical Greece. Such moral philosophy approaches can be
categorised as virtue, deontology and teleology. I consider each in turn.
Aristotle espoused virtue ethics, arguing that a moral virtue is an innate habit that enables a
human to live according to reason. Important virtues include honesty and integrity. The
virtues not only provide criteria for evaluating actions, but also social institutions and
practices.
4
In contrast, Immanuel Kant (1724-1804) is primarily associated with the deontological
approach to ethics, which focuses on the development of universal moral laws. Grounded in
Christian notions of absolute moral rules, deontology focuses on one’s mutual obligations to
perform according to certain societal rules.
As the name suggests, teleological approaches are concerned primarily with the consequences
of actions. For instance, utilitarianism is based on the premise that the right choice in any
situation is the one that produces the greatest good for the greatest number. Proponents of
teleological approaches argue that they are rational, secular and grounded in notions of human
happiness and well-being. They, it is argued, avoid the authoritarian basis of law and religion
as well as the subjectivity, arbitrariness and irrationality that may characterise cultural or
totally personal moral views. I would argue that such claims are a chimera – that ultimately
all moral and ethical judgements are subjective.
These moral philosophy approaches all tend towards the production of regimes of truth with
regard to ethics. That is, ethics is either an innate and fixed characteristic of the human soul,
or founded in religious and moral laws or the product of positivistic and ‘rational’ processes.
But all of these discourses are, of course, in themselves socio-cultural or economic products,
not absolute truths. Taylor (1975) observed that
One of the most commonly held opinion in ethics is that all moral norms are relative to
particular culture. These rules of conduct applicable in one society, it is claimed, do not apply
to the actions of people in another society. Each community has its own norms and morality
is entirely a matter of conforming to the standards and rules accepted in one’s own culture (p.
13).
Early notions of the morality of accountancy relied almost exclusively on Aristotelian
notions of the innate ‘gentlemanly’ qualities of the first professional accountants. Matthews et
al. (1998) trace the origins of the attest function in auditing to Victorian Britain, where social institutions engendered moral trust and the auditor was a ‘gentleman’. McMillan
5
(2004) posits that early accountants earned their professional status and trust by exploiting
this (gentlemanly) ideal. It has been argued that the transformation of accountants from
gentlemen professionals to ‘experts’, particularly in the US, served to undermine the trust
which the profession had hitherto enjoyed (McMillan, 2004). This prompted the development
of strict moral or ethical codes for accountants – a codification and formalisation of the
gentlemanly virtues (Plender, 1927).
Abbott (1983) argues that ethical codes are the most concrete cultural form in which
professions acknowledge their societal obligations. One of the hallmarks of a profession is the
commitment by its members to a high standard of professional conduct (Abbott, 1988). The
accountancy profession has traditionally defined ethics narrowly, construing it as a matter of
etiquette and professional manners (Gowthorpe and Blake 1998).
Harris (1994) argues that professional codes of ethics appear to fit into a deontological moral
theory of a Kantian kind. However, it could also be argued that professional codes of ethics
also draw heavily from Aristotle’s virtue theory. For example, ethical standards in auditing
focus on character such as independence, integrity and honesty. Given such origins, it is a
moot point whether such codes are primarily designed to act as guidance for members or authoritative public statements that support and sustain the reputation of the trustworthiness of accountants. In recent years, the persistence of financial scandals has prompted some to allege that accountants have been the main contributors to the decline in ethical standards in business (McCabe et al. 1991; Modic, 1987 cited in Davis and Welton, 1991). O’Connell,
(2004), points out that in the case of Enron; Arthur Andersen appears to have assisted
6
management in misleading the public. In another recent development involving the largest
criminal tax case ever filed, KPMG, one of the Big Four accountancy firms admitted
engaging in a fraud that generated at least $11bn in phony tax losses which, according to
court papers cost the US at least $2.5bn in evaded taxes (Gosling, 2005). The persistence of
such incidents suggests the failure of self-regulating codes of ethics; hence interventions by
governments through statutory regulatory regimes such as Sarbanes-Oxley. These new regimes are more reflective of a teleological-utilitarian approach. That is,
accounting ethics are formulated to maximise and protect the public good and accounting
behaviour is deemed ‘ethical’ by this yardstick. In truth, elements of all of these moral
philosophy approaches are evident within accountancy from the notion of the virtuous
accountant, the self-regulatory moral codes and now the imperative for public/social good.
Despite this heterogeneity of approaches, it remains the case that all of them are intrinsically
rooted in Western traditions of thought. But accounting is now globalised, and it has carried
with it, it might be argued, these Western and essentially universalistic ethical and moral
frameworks. This might be problematic if such approaches generate disjunctures (Appardurai,
2001) in local contexts. For example, Waldman (2000) contrasts Confucian ethics with
Western ones and points out that the former would favour loyalty to the employer rather than
an abstract code of ethics.
The next section captures the views of accounting academics on ethics and what they consider
their role to be, if any, in driving the business ethics agenda in the light of recent scandals.
Academic research on accounting and ethics
A number of writers have questioned the efficacy of professional codes of ethics for
accountants. Sherman (1982) argues that codes of ethics lack authority and leave scope for
7
various interpretations. In a New Zealand study, O’Grady (1993, cited in Tan and Chua 2000,
p. 261)) found no difference in knowledge of ethics between members who had read the code
of ethics and those who had not. According to Velayutham (2003), codes of ethics for
accountants are no longer concerned with moral values; rather they are about quality
assurance. His argument is that the focus is now on compliance with the requirements of
standards. This argument supports Abbott’s (1988) observation that there has been a
fundamental shift in society, and consequently in the professions, from legitimacy of
character to legitimacy of technique. In the twentieth century, character lost much ground to
science and technology with emphasis placed on rationality and objectivity. Velayathum
(2003) contends that professional examinations that focus on technical competence rather
than personal moral values are a reflection of this shift in the basis for professional
legitimacy.
I would argue that codes of ethics are a legitimation tool intended to convince the public that
the accountancy profession can still be trusted. I would further add that the contents of the
codes of ethics merely represent a checklist that professionals should mechanically comply
with.
Perhaps, unsurprisingly, in recent times, ethics has attracted considerable interest in
accounting education curricula debates (see Lehman, 1988; Gray et al., 1993; Loeb, 1994;
Puxty et al., 1994; Kerr and Smith, 1995). Traditionally, in both academic and professional
courses the teaching of ethics has been somewhat narrowly confined to professional codes of
ethics in auditing. It is only recently, that researchers have considered other areas such as
taxation and environmental accounting. Several writers have indicated that taxation has raised
a distinct set of ethical dilemmas for accountants engaged in tax practice. These include
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compliance, client advocacy for tax evasion and tax planning (Finn et al., 1988; Leung and
Cooper, 1995). However, not all academics prioritise the teaching of ethics in taxation.
Craner and Lymer (1999) found that 76.5 % of UK tax educators viewed a student’s ability to
carry out detailed computations an important aspect of their course objectives. This reflects a
focus on technique and competence, rather than the social implications of taxation. Chua
(1990 cited in Tan and Chua 2000, p. 261) found that 90% of the tax courses in Australasia
did not allocate any time to the teaching of ethics at the undergraduate level. In another
survey, Fry et al., (1998) found that only 60% of accountancy courses in New Zealand had an
ethics component. Some tax educators cite lack of space in the curriculum, a lack of time, lack
of current relevant materials as some of the reasons for not teaching the ethics of taxation
(Cohen and Pant, 1989; McNair and Milam, 1993). Most of the academic literature calls for
the inclusion of ethics in the accountancy curriculum.
There is now anecdotal evidence of the incorporation of ethical issues in a few academic
accounting and professional courses in the UK (Gowthorpe and Blake, 1998). There has
tended to be an ad hoc approach to the teaching of ethics in the UK, often depending mainly
on the interests of the academics leading the courses. Recently there has been an interest by
some accounting academics to incorporate ethics under the rubric of environmental
accounting. In the 1990s environmental accounting gained ascendancy, against the backdrop
of criticisms by the Greenpeace Movement. The debate initially focused on pollution and was
later extended to corporate social responsibilities of businesses, such as conservation of
resources, health effects of certain production technologies on employees and communities.
However disclosure in this area by corporations has remained voluntary and is often done as a
public relations exercise. Several accounting academics do not see why they should privilege
environmental accounting (Gray and Collison 2002).
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Since 1988 about one third of the business colleges in the US have included the subject of
ethics in their curricula (the Association to Advance Collegiate Schools of Business).
However it has been claimed that the teaching of accounting ethics in the US mirrors the
relativistic, individualistic and materialistic approach (Bowie and Duska 1990; Brooks 1995).
These claims are unsurprising, because I consider ethics to be a situated practice. The values
they refer to reflect the ethos of capitalism, hence my argument that our institutional contexts
inform our ethical practices. In reference to business managers, Ulrich and Thielemann
(1993) claim that the ‘prevailing thinking pattern among managers is not ethical opportunism
or cynicism’ but ’economism’- that is, the ethical conviction that economically appropriate
action itself is ethically good. The classical economics school of thinking has thus influenced
our curriculum in businesses schools, our worldview and probably our perceptions of ethics. These studies also found that it is very rare to locate ethical matters in their
institutional and social contexts, an approach suggested under critical accounting.
After Enron there has been a revival of ethics in academic institutions. For example, Berkeley
established a Centre for Responsible Business followed by Harvard, which introduced a
compulsory ethics course on its MBA in 2003. Wharton followed by launching a PhD
programme on ethics and legal studies in 2004. Further to these developments, KPMG and
Alliance Capital Management funded the establishment of a Centre for Leadership and Ethics
at Columbia University (Cooper et al., 2005). However, Cooper et al. (2005) note that when
ethics is taught, the material is detached from the general curriculum whose dominant
discourse has been about competitive behaviour, profit maximisation, hence depicting an
ethics of survival of the fittest (Lehman, 1988). Reilly and Kyj (1990) echo similar
sentiments, to the effect that; marketing, finance and accounting personnel learn that proper
10
behaviour is defined in terms of its impact on the profits of the firm. My main concern is that
if the teaching of ethics is construed within the confines of capitalism, its efficacy in terms of
helping us prevent financial scandals might be compromised.
Some writers warn that the teaching of ethics might be self-serving and dangerous (McPhail,
1999). Drawing from Foucault’s form of ethical analysis, which is concerned with how the
notions of right or wrong become embodied within an individual’s self-understanding and
how they are used by individuals and the interests they serve, teaching ethics to accounting
students might yield unintended results. McPhail cautions that accounting education may
engender an overly rationalistic view of ethics and may even construct dangerously rational
and threatening ethical accountants as the application of ethics is likely to be reduced to a
procedural rule book. Unless critical theories are deployed to sensitise students about the
impact of their accounting choices which ultimately become moral choices, the consequences
of teaching ethics could be dire. For example, a decision to close the coal mines in the ‘80s
was based on a notion of cost effectiveness and efficiencies but downplayed the moral issues
in terms of the social costs associated with the affected communities (Berry et al.,1985;
Cooper and Hopper, 1988).
Recently, there has been a considerable amount of published research on how academics in
various countries responded to the Enron crisis. US academics claim that much academic
debate largely lacks moral force and fails to question the processes that lead to financial
scandals (Ravenscroft and Williams, 2005). On the other hand, US accounting educators are
being urged to drive sound ethical business practice by emulating their counterparts in Europe
and the UK who locate accounting practice in its socio- economic and political context.
However, this practice in Europe is restricted to only a few universities, while the majority
focus on employability competencies. The import of this suggestion, it can be argued is that
11
students who understand the roles of accountancy in its social and institutional context, a
main feature of critical accounting, might recognise its ethical dimensions. Some European
commentators were mainly concerned by the lack of reaction to the Enron scandals by both
academics and the profession, particularly in Spain and Germany (see Gonzalo & Garvey
2005; Becker and Messner, 2005). Cooper et al., (2005) lament the domination of accounting
research in Canada by neo-classical economic traditions while Owen (2005) deplores the
dominance of shareholder value orientation. It is within these wider concerns that some have
advocated for the incorporation of ethics into the accountancy curriculum. My critical
engagement with the literature by accounting academics on ethics is complemented by a
review of accountancy curricula in FE and HE institutions.
Review of the undergraduate accountancy curricula
In this section I examine evidence of incorporation of ethics in undergraduate accountancy
curricula. My sample includes six universities and nine FE colleges offering an honours
degree in Accounting and Finance. (See table1)
Insert table 1 here
Universities A and B are in a developing country, Zimbabwe a former British colony, while
the remainder are in the UK. C and D are ‘older’ universities while E and F are former
polytechnics and comparatively ‘new’1. The Zimbabwean universities have been included in
the sample to underscore my argument that ethics is a situated practice, yet we seem to adopt
a universal ethical framework. All the nine FE colleges are in the UK and run degrees
franchised by University E.
1
‘old’ universities = pre 1992, ‘new’ universities = post 1992
12
There is some evidence of the incorporation of ethics into the accountancy curriculum at
undergraduate level. However, it is not all academics who have heeded the calls to introduce
ethics into their curriculum. There is also a varied degree of depth even in cases where ethics
is taught. In universities A, B and D the teaching of ethics is confined to professional codes
of conduct in Auditing.
In university E and its regional partners (9 FE colleges) ethics is taught under a broad module
called Social Cultural and Ethical Dimensions. Some elements of ethics are also taught under
environmental accounting in Financial Reporting and Analysis. Case studies, role play and
videos are some of the methods employed in teaching of ethics.
The incorporation of ethics into the accountancy curriculum was also evident at university F a
former college of higher education. It offers a module on Business Ethics as an elective to all
undergraduates but compulsory for accounting students. However one of the lecturers
indicated that the high schools had not equipped learners with any critical thinking skills. She
thought that this deficiency hampered effective grasping of ethical concepts. Elements of
ethics are also taught in the Credit and Risk Management module. However, it is evident
from the review of the curriculum that the teaching of ethics is not embedded in other
modules but is viewed to be a standalone bolt on module. A case could be put for ethics to be
integrated into other modules and taught across the curriculum, for example in taxation,
financial reporting, management accounting and so on.
There is no module dedicated to the teaching of ethics at university C but there is a
commitment to the use of the critical approach to teaching across the whole curriculum. I will
discuss this approach later in this paper. The curriculum at university D is rigorous and
13
focuses on techniques and their application in the business world. The adoption of critique
was ad hoc with only one member of staff who had trained as a sociologist/ cum accountant
committed to the critical approach to accounting.
Discussion
The discussion draws from the literature, empirical findings and my personal experiences
teaching in some of the above universities. The objective of the paper was to conduct the
analysis taking into account the socio-economic, political and institutional contexts. The key
question is whether the incorporation of ethics into the accountancy curriculum would reduce
the incidence of financial scandals. My analysis and reflections on the nature of ethics; the
issues raised in the literature and empirical work, suggest that our ethical framework; coupled
with the dominant positivist approaches to the education and training of accountants, hinder
our efforts in producing ‘ethical’ accountants.
Nature of ethics and the Western ethical framework
There is evidence from the literature that ethics is a situation specific practice and therefore
relative (MacIntyre,1999). Even the work of early philosophers reflects this fluidity. Yet, our
ethics modules/ framework is predicated on this work of early philosophers which is
essentially Eurocentric at a time when accounting is practised globally. The adoption of
both international accounting and auditing standards by many countries implies that these
standards draw from Western ethical conceptions. The increasing numbers of international
students in Western universities has not influenced those who write up the curriculum to
consider other possible philosophies underpinning ethics such as Confucian. The argument of
this paper is that ethics is shaped by local institutional contexts and is likely to mean different
things to different societies even within Europe and the US. For example in certain societies,
14
bribery is not considered to be unethical, but has been institutionalised and accepted as part of
business protocol. Such practices will lead accounting students to react differently, depending
on where they are located. The argument of this paper is that emphasis should not be on the
teaching of ethics per se but on developing social analytical skills to enable learners to
understand their social world and be conscious of the consequences of their accounting
decisions. In the next section I consider the influence of capitalism on our ethical practices.
Institution of capitalism
It is assumed that the purpose of accounting education in a capitalist society is to turn out
stewards and custodians of corporate assets. The system of accounting under capitalism
privileges investors as the main dominant class whose interests should be protected. This
rhetoric is repeated in accounting and finance textbooks that we dare ask why other
stakeholders are not considered important. Such thinking influences an accounting graduate to
maximise shareholders’ wealth at any costs. The boundaries or limits to the pursuit of this
goal are never discussed in the literature, hence many a times overzealous graduates overstep
the mark leading to corporate failure. There is a tendency in our accounting reports to place an
emphasis on corporate profits but never state what aspects of business or workers’ lives were
neglected in the process of generating such profits. Overall, our use of accounting language in
various business contexts reinforces unethical pursuits of profit, as alluded to in the literature.
These notions of capitalism are further reproduced in the classrooms as part of the
accountancy curriculum. Cheng-Man Lau (2001) argues that curriculum development reflects
the distribution of power in society. It can also be added that education plays a significant role
in maintaining the hegemony of growth within political and economic debates regarding the
future direction of societal ‘progress’ (Gramsci, 1971). Although accountancy curricula serve
15
the interests of the state and those who supply capital; this does not in any way preclude a
different type of accounting in the future. It has been argued in the literature that accountancy
is a technology which helps to sustain the capitalist system (Sikka and Wilmott, 1995).
Drawing from this perspective, it would appear important that the education of accountants
sensitises future accountants to the importance of their role/ potential roles in the global
market place.
The institution of capitalism on behalf of the State has enacted both the accountancy
profession and universities to further its cause. The accountancy profession is one of the main
beneficiaries from the expansion of global capitalism and propagates the concepts of ethics
without radically transforming its activities. Such a position succeeds because of the
dominance of positivist approaches to the teaching and training of accountants. The emphasis
is placed on technical rationality and professional competence. This helps to avoid most of the
questions which could arise if critical approaches were adopted to provide a platform for the
education of accountants. My argument is that positivist approaches to the teaching of
accountancy have been institutionalised to an extent that the majority of the academics
subscribe to them. Once the minds of both the lecturers and learners have been framed in this
way, abstract subjects like ethics are also taught using technical competence based
approaches. It is rarely questioned how one could become competent in ethics, hence some of
our teaching of ethics might be less effective.
In five of the universities included in this study, positivist approaches dominate the teaching
of accountancy. This is a legacy of the neo- classical school of economics where positivist
methods are held in high esteem (Cooper et al., 2005). This finding is unsurprising, because
most of the lecturers are a product of competence based training systems in accountancy
16
firms. Notwithstanding its pedigree, I still consider such an approach to have inherent
weaknesses when applied to soft subjects like ethics and in fostering critical thinking skills.
Because the competence based /technical model is premised on the assumption that decisions
can be arrived at on a rational objective basis, I would argue that it is incompatible with the
concept of ethics which is inherently subjective.
Capitalism has also extended its tentacles to embrace universities under the ‘modernisation’
project.
The corporatisation of universities and its impact on curricula
Recent reforms intended to make capitalism work better have resulted in a blurring of
boundaries between the public and the private sector and led to the ‘modernisation’ of
universities. In the process of modernisation some universities have negated their role of
producing responsible citizens by abandoning liberal education and engaging in training to
meet the needs of industry and the markets (Puxty et al., 1994; Craig et al., 1999). In
addition, the advent of corporatisation of universities in the UK in the early 1980s has eroded
the power of academics to engage in liberal education. Saravanamuthu and Tinker (2002)
argue that the traditional nature of university education had been ‘liberal’, it prepared a
‘gentleman’ to think, and act morally, without encumbering him with specific skills, which
could be acquired when he entered whichever service, if any, he chose upon leaving the
university. There is compelling evidence in the literature which explains why universities
have abandoned their traditional role of educating responsible citizens (Marginson, 1997;
Lawrence and Sharma, 2002). In contrast now, universities have been turned into training
centres other than citadels of education
There has been a move by universities to engage in mass education in order to justify their
existence to the providers of funds. Mass education engenders the franchising of degrees by
17
mainly the `new’ universities such as E. This practice has been extended not only to colleges
within the UK but to other universities abroad and these developments demand a uniform
product to be delivered across the many sites. Universities have to compete for overseas
students and view them as customers whose needs should be satisfied. However, Parker and
Jary, (1995) argue that a high quality academic service is not only about ‘pleasing customers’
but is also about critical teaching and challenging conventional wisdoms. But in the new
environment students view themselves as having rights and expect to pass regardless of the
effort they put into their studies.
Mass education has in turn led to the commodification of courses, as evidenced by the
growth of distance learning and a proliferation of course packages. An example from this
study is university E which has regional partnerships comprising 9 FE colleges in addition to
centres abroad. Common teaching materials are disseminated to the affiliated colleges and
learners sit common examinations. Individual academic freedom within such a system is
stifled and it would be difficult under these conditions for academics to tinker with the
module specifications and teach ethical matters.
Willmott, (1995) argues that commodification has been extended to academic labour where
academics are now pre-occupied with doing those things which can be factored into the
performance measurement system. Universities and FE colleges in particular now prefer to
use part-time / contract lecturers in order to save costs. For example, senior managers in one
FE college which is included in this study laid off permanent staff in order to maintain a ratio
of 25% full-time to 75% part-time staff as a cost saving measure.
18
The performance measurement systems and the rhetoric of efficiency shifts focus to outputs
such as pass rates, retention and achievement. It is not surprising that, under such regimes, the
positivist technical approach to teaching is preferred to the critical one because it is a useful
tool for atomising learning into bite-size chunks which can be taught across the board. It is
claimed that university education, particularly in accounting has been turned into training for
the accountancy firms who need a ‘ready made product’ in order to cut costs and maximise
their profits (Dillard, 2001). This new role of the universities is therefore problematic.
How academics view their new roles
A synopsis from the literature about reactions of accounting academics to financial scandals
led me to identify at least four camps. The first group comprises academics who call for the
incorporation of ethics into the accountancy curriculum. Many US academics would fall into
this category. In the second group are academics that have actually incorporated ethics into
their curricula; here we have the majority of US academic institutions, some tertiary
institutions in New Zealand and some universities in the UK such as E and F. The third group
includes academics that are reluctant to incorporate ethics into their curriculum as if they are
not convinced it is their responsibility. They fall into the category that sees accounting as a
technical neutral subject and would rather do nothing to change the status quo. Finally there is
a group of academics who are committed to adopting a critical approach to the teaching of
accounting. Their focus is to illuminate accounting’s current and potential roles. The four
groups are polarised and pre-occupied with advancing their different agendas.
Academics find themselves trapped within this system which privileges the use of accounting
information for the benefits of capital at the expense of the public interest. This discourse has
become so powerful that it is perpetually reproduced by some accounting faculties without
19
any radical questioning, hence, some academics do not find anything problematic about their
curricula. The teaching of business ethics within the confines of capitalism is in direct
conflict with its hidden goals; hence it has attracted criticism (see McPhail, 1999).
There have been several calls for reforms in accountancy education to address the problems of
depth in curricula. Albrecht and Sack (2000) argue that current curricula are too narrow, with
too little attention to globalisation, technology and ethics. Other writers have indicated that
academics ignore the historical context of accounting developments and focus on the
techniques. Pedagogy is lecture and textbook driven, with too much focus on preparation for
examinations. My personal experience from teaching on professional accountancy and
academic programmes is that academics conveniently use the same resources to save time on
preparation. Study texts prepared by training companies such as BPP are simultaneously used
on both degree and professional programmes. The problem with using such training material
is that it is presented in note form with very little theory and rarely referenced. It may be
argued that the approach short-changes learners on a degree programme who might wish to
follow up on issues. Some of these tendencies can be explained by the workload, particularly
in FE colleges delivering HE courses where the teaching load is 800 hours per annum.
In order to map the way forward in restoring credibility to the accountancy profession both
academics and the profession should work together. It is easier in other countries than in the
UK where we have the oldest accountancy professional bodies.
Relationship between the profession and the academics
In the UK in particular, the relationship between academics and the accountancy profession is
ill-defined. There could be historical reasons for this because most practitioners were trained
20
and not educated in accounting. On retirement some of these members of the profession take
up part-time lecturing jobs. Prior to April 2001, accounting degrees in the UK were
submitted to the Board of Accreditation of Accountancy Educational Courses (BAAEC),
which was a committee of the Consultative Committee of Accountancy Bodies (CCAB). The
BAAEC acted on behalf of the main UK professional accountancy bodies except for ACCA,
which carried out accreditation independently. In this way accountancy professional bodies
wielded a powerful influence over the accounting curricula. In other words, if they
considered it important to incorporate more ethics in these courses they would have long
achieved that, however they have been very careful in selecting what counts as knowledge.
The abolition of the BAAEC in 2001 provided an opportunity for academics to determine
what could be taught. Students can apply for individual exemptions while universities can
also apply for institutional exemptions for their students directly from the professional bodies.
However, there has been some disquiet in accountancy firms about the quality of the
graduates they get from universities. Some of the deficiencies cited include poor
communication and technical skills, in spite of the focus of some academics on developing
technical skills. This has been a source of tension in the UK because only a minority of
qualified accountants hold relevant degrees (Gray and Collison, 2002; Annisette and
Kirkham, 2007). Senior members of accountancy firms who were interviewed by (Gray and
Collison , 2002) had reservations about the usefulness of relevant accounting degrees, and
preferred to recruit holders of non-accounting degrees. Surprisingly, there is very little in
the literature about the sources of these concerns and how they are being addressed by
academics and the profession.
21
In the UK in 1997 the proportion of accounting graduates holding ‘relevant degrees’ entered
into training contracts with the ICAEW was only 17% (ICAEW 1997b, p.3). However, this
statistic has decreased further with only 4% entered into training contracts with ICAEW
between 2001 and 2004 (Annisette and Kirkham, 2007). Such statistics raise the question of
the usefulness of a relevant degree (Dewing and Russell, 2000). One might cynically argue
that incorporating ethics into the accountancy curricula might not reduce instances of
unethical behaviour because the majority of trainees with accountancy firms do not
necessarily hold relevant degrees (UK only).
There have been similar outcries about the quality of accounting graduates in the US and
Australia. Mathews (2001) in reference to accounting education in Australia suggested that
an entrant whose first degree is in a non-business area, followed by studies in accounting,
should bring a broader knowledge and world view to bear on accounting and reporting issues.
The US has responded to this disquiet by prescribing what percentage of modules in
undergraduate courses should consist of liberal and social studies. The UK major accounting
firms make up for this deficiency by employing non-accounting graduates.
Accounting education which is in most cases synonymous to training suffers from an acute
tension between its role in including technical (vocational) expertise for its future practice and
its wider; critical, educational (transcendent) roles (French et al., 1992; Gray et al., 1994;
Humphrey et al., 1996). Zeff (1989, p. 167) argued that- ‘students are indoctrinated in the
rules of extant practice and are seldom exposed to the historical background or institutional
framework that has shaped current practice’. It can be argued that the professional
examination system has an impact on accounting programmes, where universities set out to
gain as many exemptions as possible and dovetail their academic programmes to achieve this.
22
For meaningful reforms to take place in accountancy education and training some argue that
professional bodies should lead since they have a powerful influence on both academic
programmes and individual entrants. Those academics who subscribe to the neo-classical
economic model and market forces view themselves as providing a product to accountancy
firms, who should provide the specification.
Conclusion and alternative way
In this paper I have questioned the efficacy of our ethical framework as a platform for
educating ethical accountants, who might help reduce the frequency of financial scandals. I
have also identified the institution of capitalism as the key player in shaping and informing
our ethical practices. Together with its attendant approaches such as positivism, it has played
a key role in framing our minds in a way that we do not critically question or reflect on some
of our practices, which we take for granted. The paper has also argued strongly that ethics is a
‘situated practice’ and does not believe that it can be universalised.
This leaves academics with one alternative way of producing ethical accountants, that of
adopting critical approaches to the teaching of accounting, such as deploying social theories
to help learners understand their social, political, economic and institutional context. This is
not a new call amongst critical accounting academics, except that this paper argues that
adopting critical approaches to teaching any subject matter, accountancy included, is likely to
increase ethical awareness amongst graduates.
Several academics have been at the forefront of the critical accounting project to facilitate
transition to a more enabling accounting (Puxty et al., 1994; Humprey, 1996; Roslender,
1996a; Sikka and Wilmott, 1997; Tinker, 2000; Singh, 2004). Academics can contribute to
23
this cause through developing accounting curricula which will help learners understand the
role of accounting in society rather than serve the professional bodies and business. Adopting
appropriate teaching approaches and exposing the weaknesses of positivist centred methods in
accounting and in ethics both practices which are essentially a social construction.
Humphrey et al.,(1996) call for accounting academics to give greater attention to how
accounting knowledge is constituted and to liberate notions of ‘relevant’ accounting education
from their implicit, but still powerful, professional and institutional strangleholds. For this
paper this call is extended to an examination of how accounting ethics is constituted and how
we are implicated in its reproduction. It is just another call for universities to revert to their
traditional roles of liberal education and developing intellectual capacities of learners. The
recurring argument of this paper is that sensitising learners to ethical dilemmas begins with a
focus on the development of their critical thinking skills. In this paper critical thinking refers
to the process of purposeful, self-regulatory judgement which gives reasoned consideration to
evidence, context, conceptualisations, methods and criteria (APA Delphi Report, 1990).
A few writers have linked critical thinking with ethics, for example Cava (1990), however in
this paper I question the efficacy of the teaching of ethics without developing critical thinking
skills. Singh (2004) aptly suggests that sowing the seeds of critical thinking should act as an
ethical scanner in the mind of the organic graduate. I would argue that fostering such skills,
particularly, in an environment where the positivist technical perspective is so dominant will
not be easy.
On the other hand, Carroll (1998) suggests that developing an ethical curriculum implies a
programme of studies which helps students to reach their intellectual potential while building
qualities of tolerance, altruism, trust, respect, empathy, fairness, justice and open-mindedness
24
which are central to constructing integrity. He also suggests that accounting education, in
addition to addressing issues of values, should help students develop the habits of critical and
reflective thinking. The above approaches are compatible with critical approaches to the
teaching of accounting.
I acknowledge that academics that spearhead the critical accounting project (see Roslender,
1996a; Sikka and Willmott, 1997; Tinker, 2000) are more likely to increase students’
awareness of ethics. It can be inferred from the UK literature that the critical approach to
accounting focuses on sharpening the critical thinking skills of learners so that they transcend
the technical competence barrier and analyse social problems. However, scholars informed by
different critical theories, ranging from Marxists to Foucault have all contributed to the
development of the critical approach to the teaching of accounting through their research.
Critical accounting academics who seek to highlight the contradictions in the role of the
accountancy profession are in the minority and face a formidable task in trying to change the
status quo. Although there are obstacles against radical accounting research, the profession is
likely to regain its status, only if those engaged in the education and training of accountants
pay attention to the social context within which it is practised and expose it for what it is.
It is argued in this paper that developing critical thinking skills of learners and illuminating
the roles of accounting, does not privilege Western thoughts- but inculcates ability to analyse
the roles of accounting in any social setting whether it is in the Middles East, China,
Afghanistan or Africa. Graduates equipped with these generic skills are more likely to discern
ethical dilemmas, using different lens. The main argument of the paper is that ethics itself is a
situated practice, therefore in a globalised environment we cannot universalise it, however
developing critical thinking is a generic skill that can be taught across the globe.
25
However I am not claiming that there is a direct link between ethics and critical thinking. The
paper challenges academics to help to restore the role of universities by engaging in critical
reflective practices and developing strategies of overcoming current obstacles. My
conclusion is that financial scandals are likely to persist as long as society continues to
reproduce the institutional structures which nurture capitalism and its attendant systems such
as accountancy.
Table 1-Characteristics of undergraduate accountancy degrees
Institution No. of
Teaching
Modules
modules model
incorporating
ethics
A
24
Technical/
Competence Auditing
based
B
15
Technical/
Competence
based
Auditing
C
15
Critical
approach
Not expressly
stated
D
15
Competence
based
Auditing
Assessment
Strategies
Electives
Coursework
+ 3 hr exam
Nil
30% C/W
70% Exam
Nil
Term papers
C/W +Exam
Exam only
Sociology
Philosophy
Maths
C/W +Exam
Spanish
Sports Studies
Maths
C/W +Exam
E & 9FE
F
22
22
Technical/
Competence
based
Technical/
Competence
based
Auditing
Social,Cultural
&Ethical
Dimensions
Business Ethics
Entrepreneurship
HRM
C/W + Exam
Credit Risk
Management
26
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