ISSUES IN ACCOUNTING EDUCATION American Accounting Association
Vol. 27, No. 2 DOI: 10.2308/iace-50119
2012
pp. 399–418
Ethics and Accounting Education
Stuart Thomas
ABSTRACT: The current study investigates how a university accounting education
affects the rationales used by accounting and first-year business students in making
ethical decisions, the level of deliberative reasoning they employ, and their ethical
decisions. Senior accounting students (with approximately four accounting courses to
complete) were found to exhibit higher deliberative reasoning, make more frequent use
of post-conventional modes of deliberative reasoning, and make more ethical decisions
than first-year accounting students. These results suggest that a university accounting
education has a positive effect on deliberative reasoning, on the use of post-conventional
modes of deliberative reasoning, and on ethical decisions. There was no difference
between the level of deliberative reasoning and ethical decisions of first-year accounting
and first-year business students, but there were differences in their modes of deliberative
reasoning. These results suggest that first-year accounting and first-year business
students may make ethical decisions differently, implying the need for a different
emphasis when teaching ethics to these two groups of students.
Keywords: deliberative reasoning; modes of deliberative reasoning; ethical decisions;
university accounting education.
INTRODUCTION
Education has been suggested as a means by which ethics may be improved in the
accounting profession. The American Accounting Association, Committee on the Future
Structure, Content, and Scope of Accounting Education (AAA 1986) has stated that the
introduction of ethical standards is one of the purposes of accounting education, and this has found
widespread support (e.g., Stark et al. 1986). The transference of ethical standards has been
described as essential to the socialization of students into the accounting profession (Clikeman and
Henning 2000). Warth (2000, 69) even claims that the vast majority of accounting firms ‘‘rely
primarily on colleges to cover the ethics and ethical behavior expected of the profession,’’ rather
than providing ethics training themselves.
Research indicates that a university education has a positive effect on accounting students’
ethical standards (Keller et al. 2007), their cognitive moral capability (e.g., Armstrong 1987, 1993;
Armstrong and Mintz 1989; Bernardi 1995; Cohen and Pant 1989; Jones et al. 2003; Ponemon
1993; Ponemon and Glazer 1990; St. Pierre et al. 1990), and their prescriptive reasoning (e.g.,
Dellaportas et al. 2006 and Welton et al. 1994). The current study reexamines the effect of a
Stuart Thomas is an Associate Professor at the University of Lethbridge.
Published Online: January 2012
399
university education on ethical decisions in an accounting context by investigating its effect on
deliberative reasoning rather than cognitive moral capability or prescriptive reasoning. Cognitive
moral capability (prescriptive reasoning) is the level of ethical reasoning an individual is capable of
in general contexts (in a particular context). Deliberative reasoning, however, is the actual level of
ethical reasoning an individual is utilizing in a particular context (Rest 1979). This is important,
since research indicates that accounting students may not use their full moral capability when facing
ethical accounting dilemmas and have higher prescriptive reasoning scores than deliberative
reasoning scores (Thorne 2001). The current study is the first to examine how the modes of
deliberative reasoning utilized by accounting students are affected by an accounting university
education and how this ultimately affects ethical decisions. Understanding these issues will allow
accounting educators to better understand possible deficiencies in the ethical decision making of
accounting students beginning their accounting education as well as those who are on the verge of
completing theirs and, hence, provide some direction in terms of what needs to be emphasized in
order to improve students’ ethical decision making.
University accounting educators are typically charged with teaching at least two accounting
courses to non-accounting business students. Treating them the same as accounting students may
negatively impact the effectiveness of the ethics education they receive if the ethical decision
making of these two groups of students differs. In fact, a disproportionately high level of accounting
students and practicing accountants has a sensing/thinking cognitive style that is associated with
low levels of ethical reasoning (e.g., students: Geary and Rooney 1993; Fisher and Ott 1996; and
practicing accountants: Vaassen et al. 1993; Schloemer and Schloemer 1997; Abdolmohammadi et
al. 2003). Studies indicate that accounting students have the same or higher cognitive moral
capability, the degree to which an individual may potentially incorporate higher order principles
into his/her ethical reasoning (Thorne 2001), than other business students (Icerman et al. 1991;
Jeffrey 1993). The current study again compares the ethical reasoning of first-year accounting and
first-year business students. The study compares deliberative reasoning rather than cognitive moral
capability because, as discussed above, this may be a more relevant measure of ethical decision
making.
COGNITIVE MORAL CAPABILITY AND DELIBERATIVE REASONING
Most ethical research in accounting has assessed ethical reasoning using Rest’s (1979)
Defining Issues Test (e.g., Lampe and Finn 1992). The Defining Issues Test (DIT) calculates an
individual’s p-score, a measure of cognitive moral capability. Higher cognitive moral capability has
been linked to better ethical decision choices in practicing accountants (Ponemon 1992), accounting
students (Abdolmohammadi and Baker 2007), university students (West et al. 2004), and
individuals generally (Blasi 1980). Empirical results, however, have been mixed (see Blasi 1980;
Rest 1986 for reviews). Statistically significant relationships have been found in about two-thirds of
the studies reviewed in Rest (1986), and the size of the correlation has been modest. Cognitive
moral capability explains 10–15 percent of the variation in ethical behavior (Thoma 1994).
Issues have been raised about the relevance of using cognitive moral capability as a measure of
ethical reasoning (e.g., Thorne et al. 2003). Thorne (2000, 2001) argues that while cognitive moral
capability measures the level of principled ethical considerations of which an individual is capable,
it does not describe the actual level of principled ethical considerations an individual applies in
resolving an ethical issue. Empirical results suggest, for example, that cooperative accounting
students do not use their full cognitive moral capability when making accounting-specific ethical
decisions (Thorne 2000, 2001). Cognitive moral capability is also measured in a context-free setting
as opposed to, say, an accounting setting. This is an issue since it is widely held that context plays a
major role in ethical decisions (e.g., Shaub 1994; Arnold 1997; Rest et al. 1999).
400 Thomas
Issues in Accounting Education
Volume 27, No. 2, 2012
The current study assesses deliberative reasoning, ‘‘the formulation of an intention to act on a
particular moral (ethical) dilemma’’ (Thorne 2001, 106). Rest et al. (1999) posit that individuals are
more likely to use more principled ethical reasoning to resolve context-free ethical issues than
issues they face in everyday life. In support of this, Thorne (2001) found that accounting students’
cognitive moral capacity was significantly greater than their deliberative reasoning. Consequently,
Earley and Kelly (2004) suggest that it would be interesting to examine potential differences
between the results obtained using the DIT measure of cognitive moral capacity and accounting
specific measures such as Thorne’s (2000, 2001) measure of deliberative reasoning.
MODES OF DELIBERATIVE REASONING
A multidimensional ethics scale (MES) has been used in a number of studies (e.g., Flory et al.
1992; Cohen et al. 1993, 1996, 2001) to measure the use of different modes of reasoning in
resolving ethical issues. The MES assumes that individuals can use one or more rationales in
making ethical decisions and that the reliance on these rationales may vary with the decision
context. Moral equity, contractualism, relativism, utilitarianism, and egoism are five rationales of
ethical reasoning from the moral philosophy literature that have been identified (Reidenbach and
Robin 1988). Moral equity posits that decisions should be evaluated in terms of their inherent
fairness, justice, goodness, and rightness. With contractualism, decisions are based on the implied
responsibilities individuals have toward each other. Relativism proposes that ethical decisions
depend on their context; there are no universal rules. Utilitarianism asserts that decisions should be
based on the outcome; the goal being to maximize benefits and minimize costs. Like utilitarianism,
egoism is focused on benefits and cost, but with egoism, the focus is on the individual decision
maker rather than society (Reidenbach and Robin 1990).
Previous studies using the MES approach have used general business (e.g., Cohen et al. 1992,
1996; Reidenbach and Robin 1990), management accounting (e.g., Flory et al. 1992), and auditing
contexts (Ge and Thomas 2008). Empirical results indicate that auditors were most aware that
actions were culturally/traditionally unacceptable (relativism) and least aware that they violated
rules and unspoken promises (contractualism). Auditors and business students relied on moral
equity, contractualism, and utilitarianism but not relativism when assessing the morality of most of
the actions taken. Auditors relied primarily on these same three factors when determining if they
would perform the act (Cohen et al. 1996, 2001).
COGNITIVE MORAL DEVELOPMENT AND MODES OF
DELIBERATIVE REASONING
Research indicates that the five modes of deliberative reasoning used by decision makers are
affected by their level of deliberative reasoning (Ge and Thomas 2008). The five modes of
deliberative reasoning have been placed into three levels described by Kohlberg’s (1969, 1976)
Cognitive Moral Development (CMD) Theory. At the pre-conventional level, decisions are based
on the benefits the decision maker will experience as a result of the decision. This is consistent with
the egoism approach identified by Reidenbach and Robin (1988). At the conventional level, the
focus is on the expectations of significant others. This is consistent with relativism, another of the
five modes of ethical reasoning. With relativism, ethical rules are not universal; they are
context-dependent. At the post-conventional moral development level, individuals apply universal
ethical principles when making ethical decisions. This is consistent with the other three modes of
reasoning identified by Reidenbach and Robin (1988). At this level, individuals consider universal
fairness (moral equity), the good of society (utilitarianism), and personally held principles
(contractualism) when making ethical decisions.
Ethics and Accounting Education 401
Issues in Accounting Education
Volume 27, No. 2, 2012
HYPOTHESIS DEVELOPMENT
Empirical results suggest that a university education has a positive effect on the cognitive
moral capability of accounting students (e.g., Armstrong 1987, 1993; Armstrong and Mintz 1989;
Bernardi 1995; Cohen and Pant 1989; Ponemon 1993; Ponemon and Glazer 1990; St. Pierre et
al.1990). Although research indicates that accounting students do not use their full cognitive moral
capability when facing accounting-specific ethical dilemmas, it has been found to be positively
correlated with deliberative reasoning (Thorne 2001). It is, therefore, expected that a university
education will have a positive effect on deliberative reasoning. The first hypothesis is, therefore, as
follows:
H1: Senior accounting students use higher deliberative reasoning than first-year accounting
students.
Students choosing accounting have a cognitive style associated with low levels of ethical
reasoning (e.g., Geary and Rooney 1993; Fisher and Ott 1996; Abdolmohammadi et al. 2003).
However, research indicates that first-year accounting students have a higher moral capability than
first-year business students (Jeffrey 1993). The current study, therefore, revisits this issue, this time
examining deliberative reasoning, the level of principled ethical considerations actually applied to
resolve ethical dilemmas, instead of cognitive moral capability or prescriptive reasoning, the level
of principled ethical consideration an individual is capable of using (Thorne 2001). The second
hypothesis is, therefore, stated in the null form as follows:
H2: There is no difference between the level of deliberative reasoning of first-year accounting
and first-year business students.
Since the five modes of deliberative reasoning used by decision makers are affected by their
level of deliberative reasoning (Ge and Thomas 2008) and senior accounting students are
hypothesized to have higher deliberative reasoning than first-year accounting students (H1), it
follows that senior accounting students will make more frequent use of higher modes of deliberative
reasoning. On the other hand, it is unclear whether first-year accounting students have higher
deliberative reasoning than first-year business students, so no predictions can be made regarding
their use of different modes of deliberative reasoning. The next two hypotheses are, therefore, as
follows:
H3a: Senior accounting students make more use of post-conventional modes of deliberative
reasoning than first-year accounting students.
H3b: There is no difference in the use of post-conventional modes of deliberative reasoning
between first-year accounting and first-year business students.
Cognitive moral capability is the highest level of principled ethical consideration of which an
individual is capable and has been linked to more ethical decisions (e.g., Abdolmohammadi and
Baker 2007). Research indicates that higher deliberative reasoning leads to more ethical decision
choices (Ge and Thomas 2008). Since senior accounting students are expected to use higher
deliberative reasoning than first-year accounting students, they are further hypothesized to make
more ethical decisions. Also, since it is hypothesized that there will be no difference between the
deliberative reasoning of first-year accounting and business students, it is further hypothesized that
there will be no difference in the number of ethical decisions they make. The remaining hypotheses
are, therefore, as follows:
H4a: Senior accounting students make more ethical decisions than first-year accounting
students.
402 Thomas
Issues in Accounting Education
Volume 27, No. 2, 2012
H4b: There is no difference in the ethical decisions of first-year accounting students compared
with first-year business students.
RESEARCH METHODOLOGY
Subjects
Subjects consisted of 70 senior accounting students with approximately four accounting
courses to complete, 42 first-year accounting students, and 106 first-year business students at a
western Canadian liberal education university. Their average ages were 24 years, 21 years, and 21
years, respectively, with age ranges 20 to 36, 18 to 35, and 18 to 37, respectively. Of the senior
accounting students, first-year accounting students, and first-year business students, 36 percent, 50
percent, and 44 percent, respectively, were female. Participation was anonymous and voluntary.
Instrument
The current study combined Thorne’s (2000) accounting-specific defining issues test (DIT)
instrument based on Rest’s (1979) instrument and the MES approach. Subjects responded to four
scenarios, each involving an ethical auditing dilemma, as they believed the person in the case would
respond. Response choices were either that the unethical action would be taken, would not be taken,
or that the subject could not decide. In making the decision, different issues needed to be
considered. Subjects ranked the importance of each issue, on a scale ranging from 1 (Great) to 4
(No). They then ranked the four issues of greatest importance for making the decision. According to
their rankings, the individual’s level of deliberative reasoning was determined by calculating a pscore, ranging from 0 to 95, determined from the ranking that the individual assigned to postconventional items of consideration in resolving an ethical dilemma (Thorne 2000). Other studies
have also employed Thorne’s (2000) instrument to test the ethical reasoning of accounting
professionals (e.g., Thorne et al. 2003) and accounting students (e.g., Ge and Thomas 2008;
Bernardi et al. 2002).
The MES scale was used in previous accounting studies (e.g., Ge and Thomas 2008; Cohen et
al. 1998, 2001). The procedure followed was the one that was used in the Ge and Thomas (2008)
study. For each of the four scenarios, subjects were asked to assess the action according to the five
MES factors comprised of 13 items: three each for moral equity, utilitarianism, and relativism; and
two each for contractualism and egoism, using a seven-point Likert-type scale. The items for moral
equity, for example, had end points ‘‘fair/unfair,’’ ‘‘just/unjust,’’ and ‘‘morally right/not morally
right.’’ Item scores were averaged for the moral equity, contractualism, and relativism factors. The
Cronbach’s alpha measure for these items exceeded the 0.70 score recommended by Nunnally
(1978). When the Cronbach’s alpha measure was low, through trial and error, the item combination
with the highest alpha score would be used. The Cronbach alphas for egoism and utilitarianism
were less than 0.60, regardless of the item combinations, so the item deemed best to represent the
factor was chosen. For egoism, for example, it was believed that the item ‘‘personally beneficial/not
personally beneficial’’ was a superior measure to the item ‘‘in the best interest of the audit firm/not
in the best interest of the audit firm.’’ For utilitarianism, the item ‘‘minimizes benefits while
maximizes harm/maximizes benefits while minimizes harm’’ was chosen. Table 1 reports reliability
measures (Cronbach’s alphas) for each of the scales. These measures were comparable with the Ge
and Thomas (2008) study, which had alphas ranging from 0.814 to 0.892, 0.870 to 0.903, and 0.689
to 0.820 for moral equity, contractualism, and relativism, respectively. This study also used one
item each for egoism and utilitarianism because of low alpha values. The alpha scores of the present
study were also comparable to those of the Cohen et al. (1998, 255) study. The Cohen et al. (2001)
Ethics and Accounting Education 403
Issues in Accounting Education
Volume 27, No. 2, 2012
study did not give detailed alpha scores, but the reported scores appear comparable (Cohen et al.
2001, 6).
RESULTS
Table 2 presents the ages, working hours per week, number of years of work experience, and
grade point averages of the subjects. While there were significant differences, these factors were not
correlated to deliberative reasoning (Table 3). An analysis of variance indicated no relationship
between deliberative reasoning (p-scores) and gender. Table 4 presents the results of an analysis of
variance and multiple comparison tests of the deliberative reasoning of first-year accounting,
first-year business, and senior accounting students. Since empirical results suggest that a university
education has a positive effect on cognitive moral capacity (e.g., Armstrong 1987, 1993; Armstrong
and Mintz 1989; Bernardi 1995; Cohen and Pant 1989; Ponemon 1993; Ponemon and Glazer 1990;
St. Pierre et al. 1990), and cognitive moral capacity is positively correlated to deliberative reasoning
(Thorne 2001), it was hypothesized (H1) that senior accounting students would have higher
deliberative reasoning than first-year accounting students. Table 4 presents results in support of H1.
TABLE 1
Reliability Measures (Cronbach’s Alphas) for each of the Multi-Dimensional Ethics Scale
(MES) Items
Cases
1234
Moral Equity 0.954 0.934 0.874 0.940
Contractualism 0.923 0.942 0.958 0.865
Relativism 0.729 0.765 0.760 0.724
Utilitarianism and egoism were measured using one scale.
TABLE 2
Descriptive Information
Means
(S.D.)
p-value
First-Year Senior
Accounting
Students
(n ¼ 42)
Business
Students
(n ¼ 106)
Accounting
Students
(n ¼ 70)
Age 20.57 21.63 24.26 0.000
(3.62) (5.84) (3.38)
Working hours per week 9.62 7.75 16.36 0.001
(10.53) (10.10) (14.69)
Number of years of work experience 1.89 2.12 2.87 0.123
(0.43) (0.26) (0.34)
Grade Point Average (GPA) 3.15 3.01 3.19 0.056
(0.41) (0.49) (0.41)
404 Thomas
Issues in Accounting Education
Volume 27, No. 2, 2012
TABLE 3
Pearson’s Correlations among Selected Items for Subjects
Age Work1 Week2 GPA p-score
Age 1
Work1 0.688** 1
Week2 0.374** 0.460** 1
GPA 0.019 0.050 0.018 1
p-score 0.080 0.086 0.057 0.142 1
** Correlation is significant at the 0.01 level (two-tailed).
Work1 ¼ Number of years of work experience.
Week2 ¼ Working hours per week.
TABLE 4
Deliberative Reasoning Scores
Panel A: The Deliberative Reasoning (p-scores) of First-Year Accounting, Business, and
Senior Accounting Students
Subject Mean Std. Deviation
First Yr. Bus. Students 0.28537 0.151840
First Yr. Acc. Students 0.27640 0.165389
Senior Acc. Students 0.33893 0.134773
Total 0.30084 0.150997
Panel B: Tests of Between-Subjects Effects
Source Type III Sum of Squares df Mean Square F Sig.
Corrected Model 0.152 2 0.076 3.407 0.035
Intercept 17.069 1 17.069 765.228 0.000
Subject 0.152 2 0.076 3.407 0.035
Error 4.796 215 0.022
Total 24.678 218
Corrected Total 4.948 217
Panel C: LSD (Least Significant Difference) Multiple Comparisons of p-scores
(I) Subject (J) Subject
Mean Difference
(I J) Std. Error Sig.
First Yr. Acc. Students First Yr. Bus. Students 0.00898 0.027231 0.742
Senior Acc. Students 0.06253* 0.029150 0.033
Senior Acc. Students First Yr. Bus. Students 0.05356* 0.023002 0.021
First Yr. Acc. Students 0.06253* 0.029150 0.033
* The mean difference is significant at the 0.05 level.
Ethics and Accounting Education 405
Issues in Accounting Education
Volume 27, No. 2, 2012ISSUES IN ACCOUNTING EDUCATION American Accounting Association
Vol. 27, No. 2 DOI: 10.2308/iace-50119
2012
pp. 399–418
Ethics and Accounting Education
Stuart Thomas
ABSTRACT: The current study investigates how a university accounting education
affects the rationales used by accounting and first-year business students in making
ethical decisions, the level of deliberative reasoning they employ, and their ethical
decisions. Senior accounting students (with approximately four accounting courses to
complete) were found to exhibit higher deliberative reasoning, make more frequent use
of post-conventional modes of deliberative reasoning, and make more ethical decisions
than first-year accounting students. These results suggest that a university accounting
education has a positive effect on deliberative reasoning, on the use of post-conventional
modes of deliberative reasoning, and on ethical decisions. There was no difference
between the level of deliberative reasoning and ethical decisions of first-year accounting
and first-year business students, but there were differences in their modes of deliberative
reasoning. These results suggest that first-year accounting and first-year business
students may make ethical decisions differently, implying the need for a different
emphasis when teaching ethics to these two groups of students.
Keywords: deliberative reasoning; modes of deliberative reasoning; ethical decisions;
university accounting education.
INTRODUCTION
Education has been suggested as a means by which ethics may be improved in the
accounting profession. The American Accounting Association, Committee on the Future
Structure, Content, and Scope of Accounting Education (AAA 1986) has stated that the
introduction of ethical standards is one of the purposes of accounting education, and this has found
widespread support (e.g., Stark et al. 1986). The transference of ethical standards has been
described as essential to the socialization of students into the accounting profession (Clikeman and
Henning 2000). Warth (2000, 69) even claims that the vast majority of accounting firms ‘‘rely
primarily on colleges to cover the ethics and ethical behavior expected of the profession,’’ rather
than providing ethics training themselves.
Research indicates that a university education has a positive effect on accounting students’
ethical standards (Keller et al. 2007), their cognitive moral capability (e.g., Armstrong 1987, 1993;
Armstrong and Mintz 1989; Bernardi 1995; Cohen and Pant 1989; Jones et al. 2003; Ponemon
1993; Ponemon and Glazer 1990; St. Pierre et al. 1990), and their prescriptive reasoning (e.g.,
Dellaportas et al. 2006 and Welton et al. 1994). The current study reexamines the effect of a
Stuart Thomas is an Associate Professor at the University of Lethbridge.
Published Online: January 2012
399
university education on ethical decisions in an accounting context by investigating its effect on
deliberative reasoning rather than cognitive moral capability or prescriptive reasoning. Cognitive
moral capability (prescriptive reasoning) is the level of ethical reasoning an individual is capable of
in general contexts (in a particular context). Deliberative reasoning, however, is the actual level of
ethical reasoning an individual is utilizing in a particular context (Rest 1979). This is important,
since research indicates that accounting students may not use their full moral capability when facing
ethical accounting dilemmas and have higher prescriptive reasoning scores than deliberative
reasoning scores (Thorne 2001). The current study is the first to examine how the modes of
deliberative reasoning utilized by accounting students are affected by an accounting university
education and how this ultimately affects ethical decisions. Understanding these issues will allow
accounting educators to better understand possible deficiencies in the ethical decision making of
accounting students beginning their accounting education as well as those who are on the verge of
completing theirs and, hence, provide some direction in terms of what needs to be emphasized in
order to improve students’ ethical decision making.
University accounting educators are typically charged with teaching at least two accounting
courses to non-accounting business students. Treating them the same as accounting students may
negatively impact the effectiveness of the ethics education they receive if the ethical decision
making of these two groups of students differs. In fact, a disproportionately high level of accounting
students and practicing accountants has a sensing/thinking cognitive style that is associated with
low levels of ethical reasoning (e.g., students: Geary and Rooney 1993; Fisher and Ott 1996; and
practicing accountants: Vaassen et al. 1993; Schloemer and Schloemer 1997; Abdolmohammadi et
al. 2003). Studies indicate that accounting students have the same or higher cognitive moral
capability, the degree to which an individual may potentially incorporate higher order principles
into his/her ethical reasoning (Thorne 2001), than other business students (Icerman et al. 1991;
Jeffrey 1993). The current study again compares the ethical reasoning of first-year accounting and
first-year business students. The study compares deliberative reasoning rather than cognitive moral
capability because, as discussed above, this may be a more relevant measure of ethical decision
making.
COGNITIVE MORAL CAPABILITY AND DELIBERATIVE REASONING
Most ethical research in accounting has assessed ethical reasoning using Rest’s (1979)
Defining Issues Test (e.g., Lampe and Finn 1992). The Defining Issues Test (DIT) calculates an
individual’s p-score, a measure of cognitive moral capability. Higher cognitive moral capability has
been linked to better ethical decision choices in practicing accountants (Ponemon 1992), accounting
students (Abdolmohammadi and Baker 2007), university students (West et al. 2004), and
individuals generally (Blasi 1980). Empirical results, however, have been mixed (see Blasi 1980;
Rest 1986 for reviews). Statistically significant relationships have been found in about two-thirds of
the studies reviewed in Rest (1986), and the size of the correlation has been modest. Cognitive
moral capability explains 10–15 percent of the variation in ethical behavior (Thoma 1994).
Issues have been raised about the relevance of using cognitive moral capability as a measure of
ethical reasoning (e.g., Thorne et al. 2003). Thorne (2000, 2001) argues that while cognitive moral
capability measures the level of principled ethical considerations of which an individual is capable,
it does not describe the actual level of principled ethical considerations an individual applies in
resolving an ethical issue. Empirical results suggest, for example, that cooperative accounting
students do not use their full cognitive moral capability when making accounting-specific ethical
decisions (Thorne 2000, 2001). Cognitive moral capability is also measured in a context-free setting
as opposed to, say, an accounting setting. This is an issue since it is widely held that context plays a
major role in ethical decisions (e.g., Shaub 1994; Arnold 1997; Rest et al. 1999).
400 Thomas
Issues in Accounting Education
Volume 27, No. 2, 2012
The current study assesses deliberative reasoning, ‘‘the formulation of an intention to act on a
particular moral (ethical) dilemma’’ (Thorne 2001, 106). Rest et al. (1999) posit that individuals are
more likely to use more principled ethical reasoning to resolve context-free ethical issues than
issues they face in everyday life. In support of this, Thorne (2001) found that accounting students’
cognitive moral capacity was significantly greater than their deliberative reasoning. Consequently,
Earley and Kelly (2004) suggest that it would be interesting to examine potential differences
between the results obtained using the DIT measure of cognitive moral capacity and accounting
specific measures such as Thorne’s (2000, 2001) measure of deliberative reasoning.
MODES OF DELIBERATIVE REASONING
A multidimensional ethics scale (MES) has been used in a number of studies (e.g., Flory et al.
1992; Cohen et al. 1993, 1996, 2001) to measure the use of different modes of reasoning in
resolving ethical issues. The MES assumes that individuals can use one or more rationales in
making ethical decisions and that the reliance on these rationales may vary with the decision
context. Moral equity, contractualism, relativism, utilitarianism, and egoism are five rationales of
ethical reasoning from the moral philosophy literature that have been identified (Reidenbach and
Robin 1988). Moral equity posits that decisions should be evaluated in terms of their inherent
fairness, justice, goodness, and rightness. With contractualism, decisions are based on the implied
responsibilities individuals have toward each other. Relativism proposes that ethical decisions
depend on their context; there are no universal rules. Utilitarianism asserts that decisions should be
based on the outcome; the goal being to maximize benefits and minimize costs. Like utilitarianism,
egoism is focused on benefits and cost, but with egoism, the focus is on the individual decision
maker rather than society (Reidenbach and Robin 1990).
Previous studies using the MES approach have used general business (e.g., Cohen et al. 1992,
1996; Reidenbach and Robin 1990), management accounting (e.g., Flory et al. 1992), and auditing
contexts (Ge and Thomas 2008). Empirical results indicate that auditors were most aware that
actions were culturally/traditionally unacceptable (relativism) and least aware that they violated
rules and unspoken promises (contractualism). Auditors and business students relied on moral
equity, contractualism, and utilitarianism but not relativism when assessing the morality of most of
the actions taken. Auditors relied primarily on these same three factors when determining if they
would perform the act (Cohen et al. 1996, 2001).
COGNITIVE MORAL DEVELOPMENT AND MODES OF
DELIBERATIVE REASONING
Research indicates that the five modes of deliberative reasoning used by decision makers are
affected by their level of deliberative reasoning (Ge and Thomas 2008). The five modes of
deliberative reasoning have been placed into three levels described by Kohlberg’s (1969, 1976)
Cognitive Moral Development (CMD) Theory. At the pre-conventional level, decisions are based
on the benefits the decision maker will experience as a result of the decision. This is consistent with
the egoism approach identified by Reidenbach and Robin (1988). At the conventional level, the
focus is on the expectations of significant others. This is consistent with relativism, another of the
five modes of ethical reasoning. With relativism, ethical rules are not universal; they are
context-dependent. At the post-conventional moral development level, individuals apply universal
ethical principles when making ethical decisions. This is consistent with the other three modes of
reasoning identified by Reidenbach and Robin (1988). At this level, individuals consider universal
fairness (moral equity), the good of society (utilitarianism), and personally held principles
(contractualism) when making ethical decisions.
Ethics and Accounting Education 401
Issues in Accounting Education
Volume 27, No. 2, 2012
HYPOTHESIS DEVELOPMENT
Empirical results suggest that a university education has a positive effect on the cognitive
moral capability of accounting students (e.g., Armstrong 1987, 1993; Armstrong and Mintz 1989;
Bernardi 1995; Cohen and Pant 1989; Ponemon 1993; Ponemon and Glazer 1990; St. Pierre et
al.1990). Although research indicates that accounting students do not use their full cognitive moral
capability when facing accounting-specific ethical dilemmas, it has been found to be positively
correlated with deliberative reasoning (Thorne 2001). It is, therefore, expected that a university
education will have a positive effect on deliberative reasoning. The first hypothesis is, therefore, as
follows:
H1: Senior accounting students use higher deliberative reasoning than first-year accounting
students.
Students choosing accounting have a cognitive style associated with low levels of ethical
reasoning (e.g., Geary and Rooney 1993; Fisher and Ott 1996; Abdolmohammadi et al. 2003).
However, research indicates that first-year accounting students have a higher moral capability than
first-year business students (Jeffrey 1993). The current study, therefore, revisits this issue, this time
examining deliberative reasoning, the level of principled ethical considerations actually applied to
resolve ethical dilemmas, instead of cognitive moral capability or prescriptive reasoning, the level
of principled ethical consideration an individual is capable of using (Thorne 2001). The second
hypothesis is, therefore, stated in the null form as follows:
H2: There is no difference between the level of deliberative reasoning of first-year accounting
and first-year business students.
Since the five modes of deliberative reasoning used by decision makers are affected by their
level of deliberative reasoning (Ge and Thomas 2008) and senior accounting students are
hypothesized to have higher deliberative reasoning than first-year accounting students (H1), it
follows that senior accounting students will make more frequent use of higher modes of deliberative
reasoning. On the other hand, it is unclear whether first-year accounting students have higher
deliberative reasoning than first-year business students, so no predictions can be made regarding
their use of different modes of deliberative reasoning. The next two hypotheses are, therefore, as
follows:
H3a: Senior accounting students make more use of post-conventional modes of deliberative
reasoning than first-year accounting students.
H3b: There is no difference in the use of post-conventional modes of deliberative reasoning
between first-year accounting and first-year business students.
Cognitive moral capability is the highest level of principled ethical consideration of which an
individual is capable and has been linked to more ethical decisions (e.g., Abdolmohammadi and
Baker 2007). Research indicates that higher deliberative reasoning leads to more ethical decision
choices (Ge and Thomas 2008). Since senior accounting students are expected to use higher
deliberative reasoning than first-year accounting students, they are further hypothesized to make
more ethical decisions. Also, since it is hypothesized that there will be no difference between the
deliberative reasoning of first-year accounting and business students, it is further hypothesized that
there will be no difference in the number of ethical decisions they make. The remaining hypotheses
are, therefore, as follows:
H4a: Senior accounting students make more ethical decisions than first-year accounting
students.
402 Thomas
Issues in Accounting Education
Volume 27, No. 2, 2012
H4b: There is no difference in the ethical decisions of first-year accounting students compared
with first-year business students.
RESEARCH METHODOLOGY
Subjects
Subjects consisted of 70 senior accounting students with approximately four accounting
courses to complete, 42 first-year accounting students, and 106 first-year business students at a
western Canadian liberal education university. Their average ages were 24 years, 21 years, and 21
years, respectively, with age ranges 20 to 36, 18 to 35, and 18 to 37, respectively. Of the senior
accounting students, first-year accounting students, and first-year business students, 36 percent, 50
percent, and 44 percent, respectively, were female. Participation was anonymous and voluntary.
Instrument
The current study combined Thorne’s (2000) accounting-specific defining issues test (DIT)
instrument based on Rest’s (1979) instrument and the MES approach. Subjects responded to four
scenarios, each involving an ethical auditing dilemma, as they believed the person in the case would
respond. Response choices were either that the unethical action would be taken, would not be taken,
or that the subject could not decide. In making the decision, different issues needed to be
considered. Subjects ranked the importance of each issue, on a scale ranging from 1 (Great) to 4
(No). They then ranked the four issues of greatest importance for making the decision. According to
their rankings, the individual’s level of deliberative reasoning was determined by calculating a pscore, ranging from 0 to 95, determined from the ranking that the individual assigned to postconventional items of consideration in resolving an ethical dilemma (Thorne 2000). Other studies
have also employed Thorne’s (2000) instrument to test the ethical reasoning of accounting
professionals (e.g., Thorne et al. 2003) and accounting students (e.g., Ge and Thomas 2008;
Bernardi et al. 2002).
The MES scale was used in previous accounting studies (e.g., Ge and Thomas 2008; Cohen et
al. 1998, 2001). The procedure followed was the one that was used in the Ge and Thomas (2008)
study. For each of the four scenarios, subjects were asked to assess the action according to the five
MES factors comprised of 13 items: three each for moral equity, utilitarianism, and relativism; and
two each for contractualism and egoism, using a seven-point Likert-type scale. The items for moral
equity, for example, had end points ‘‘fair/unfair,’’ ‘‘just/unjust,’’ and ‘‘morally right/not morally
right.’’ Item scores were averaged for the moral equity, contractualism, and relativism factors. The
Cronbach’s alpha measure for these items exceeded the 0.70 score recommended by Nunnally
(1978). When the Cronbach’s alpha measure was low, through trial and error, the item combination
with the highest alpha score would be used. The Cronbach alphas for egoism and utilitarianism
were less than 0.60, regardless of the item combinations, so the item deemed best to represent the
factor was chosen. For egoism, for example, it was believed that the item ‘‘personally beneficial/not
personally beneficial’’ was a superior measure to the item ‘‘in the best interest of the audit firm/not
in the best interest of the audit firm.’’ For utilitarianism, the item ‘‘minimizes benefits while
maximizes harm/maximizes benefits while minimizes harm’’ was chosen. Table 1 reports reliability
measures (Cronbach’s alphas) for each of the scales. These measures were comparable with the Ge
and Thomas (2008) study, which had alphas ranging from 0.814 to 0.892, 0.870 to 0.903, and 0.689
to 0.820 for moral equity, contractualism, and relativism, respectively. This study also used one
item each for egoism and utilitarianism because of low alpha values. The alpha scores of the present
study were also comparable to those of the Cohen et al. (1998, 255) study. The Cohen et al. (2001)
Ethics and Accounting Education 403
Issues in Accounting Education
Volume 27, No. 2, 2012
study did not give detailed alpha scores, but the reported scores appear comparable (Cohen et al.
2001, 6).
RESULTS
Table 2 presents the ages, working hours per week, number of years of work experience, and
grade point averages of the subjects. While there were significant differences, these factors were not
correlated to deliberative reasoning (Table 3). An analysis of variance indicated no relationship
between deliberative reasoning (p-scores) and gender. Table 4 presents the results of an analysis of
variance and multiple comparison tests of the deliberative reasoning of first-year accounting,
first-year business, and senior accounting students. Since empirical results suggest that a university
education has a positive effect on cognitive moral capacity (e.g., Armstrong 1987, 1993; Armstrong
and Mintz 1989; Bernardi 1995; Cohen and Pant 1989; Ponemon 1993; Ponemon and Glazer 1990;
St. Pierre et al. 1990), and cognitive moral capacity is positively correlated to deliberative reasoning
(Thorne 2001), it was hypothesized (H1) that senior accounting students would have higher
deliberative reasoning than first-year accounting students. Table 4 presents results in support of H1.
TABLE 1
Reliability Measures (Cronbach’s Alphas) for each of the Multi-Dimensional Ethics Scale
(MES) Items
Cases
1234
Moral Equity 0.954 0.934 0.874 0.940
Contractualism 0.923 0.942 0.958 0.865
Relativism 0.729 0.765 0.760 0.724
Utilitarianism and egoism were measured using one scale.
TABLE 2
Descriptive Information
Means
(S.D.)
p-value
First-Year Senior
Accounting
Students
(n ¼ 42)
Business
Students
(n ¼ 106)
Accounting
Students
(n ¼ 70)
Age 20.57 21.63 24.26 0.000
(3.62) (5.84) (3.38)
Working hours per week 9.62 7.75 16.36 0.001
(10.53) (10.10) (14.69)
Number of years of work experience 1.89 2.12 2.87 0.123
(0.43) (0.26) (0.34)
Grade Point Average (GPA) 3.15 3.01 3.19 0.056
(0.41) (0.49) (0.41)
404 Thomas
Issues in Accounting Education
Volume 27, No. 2, 2012
TABLE 3
Pearson’s Correlations among Selected Items for Subjects
Age Work1 Week2 GPA p-score
Age 1
Work1 0.688** 1
Week2 0.374** 0.460** 1
GPA 0.019 0.050 0.018 1
p-score 0.080 0.086 0.057 0.142 1
** Correlation is significant at the 0.01 level (two-tailed).
Work1 ¼ Number of years of work experience.
Week2 ¼ Working hours per week.
TABLE 4
Deliberative Reasoning Scores
Panel A: The Deliberative Reasoning (p-scores) of First-Year Accounting, Business, and
Senior Accounting Students
Subject Mean Std. Deviation
First Yr. Bus. Students 0.28537 0.151840
First Yr. Acc. Students 0.27640 0.165389
Senior Acc. Students 0.33893 0.134773
Total 0.30084 0.150997
Panel B: Tests of Between-Subjects Effects
Source Type III Sum of Squares df Mean Square F Sig.
Corrected Model 0.152 2 0.076 3.407 0.035
Intercept 17.069 1 17.069 765.228 0.000
Subject 0.152 2 0.076 3.407 0.035
Error 4.796 215 0.022
Total 24.678 218
Corrected Total 4.948 217
Panel C: LSD (Least Significant Difference) Multiple Comparisons of p-scores
(I) Subject (J) Subject
Mean Difference
(I J) Std. Error Sig.
First Yr. Acc. Students First Yr. Bus. Students 0.00898 0.027231 0.742
Senior Acc. Students 0.06253* 0.029150 0.033
Senior Acc. Students First Yr. Bus. Students 0.05356* 0.023002 0.021
First Yr. Acc. Students 0.06253* 0.029150 0.033
* The mean difference is significant at the 0.05 level.
Ethics and Accounting Education 405
Issues in Accounting Education
Volume 27, No. 2, 2012ISSUES IN ACCOUNTING EDUCATION American Accounting Association
Vol. 27, No. 2 DOI: 10.2308/iace-50119
2012
pp. 399–418
Ethics and Accounting Education
Stuart Thomas
ABSTRACT: The current study investigates how a university accounting education
affects the rationales used by accounting and first-year business students in making
ethical decisions, the level of deliberative reasoning they employ, and their ethical
decisions. Senior accounting students (with approximately four accounting courses to
complete) were found to exhibit higher deliberative reasoning, make more frequent use
of post-conventional modes of deliberative reasoning, and make more ethical decisions
than first-year accounting students. These results suggest that a university accounting
education has a positive effect on deliberative reasoning, on the use of post-conventional
modes of deliberative reasoning, and on ethical decisions. There was no difference
between the level of deliberative reasoning and ethical decisions of first-year accounting
and first-year business students, but there were differences in their modes of deliberative
reasoning. These results suggest that first-year accounting and first-year business
students may make ethical decisions differently, implying the need for a different
emphasis when teaching ethics to these two groups of students.
Keywords: deliberative reasoning; modes of deliberative reasoning; ethical decisions;
university accounting education.
INTRODUCTION
Education has been suggested as a means by which ethics may be improved in the
accounting profession. The American Accounting Association, Committee on the Future
Structure, Content, and Scope of Accounting Education (AAA 1986) has stated that the
introduction of ethical standards is one of the purposes of accounting education, and this has found
widespread support (e.g., Stark et al. 1986). The transference of ethical standards has been
described as essential to the socialization of students into the accounting profession (Clikeman and
Henning 2000). Warth (2000, 69) even claims that the vast majority of accounting firms ‘‘rely
primarily on colleges to cover the ethics and ethical behavior expected of the profession,’’ rather
than providing ethics training themselves.
Research indicates that a university education has a positive effect on accounting students’
ethical standards (Keller et al. 2007), their cognitive moral capability (e.g., Armstrong 1987, 1993;
Armstrong and Mintz 1989; Bernardi 1995; Cohen and Pant 1989; Jones et al. 2003; Ponemon
1993; Ponemon and Glazer 1990; St. Pierre et al. 1990), and their prescriptive reasoning (e.g.,
Dellaportas et al. 2006 and Welton et al. 1994). The current study reexamines the effect of a
Stuart Thomas is an Associate Professor at the University of Lethbridge.
Published Online: January 2012
399
university education on ethical decisions in an accounting context by investigating its effect on
deliberative reasoning rather than cognitive moral capability or prescriptive reasoning. Cognitive
moral capability (prescriptive reasoning) is the level of ethical reasoning an individual is capable of
in general contexts (in a particular context). Deliberative reasoning, however, is the actual level of
ethical reasoning an individual is utilizing in a particular context (Rest 1979). This is important,
since research indicates that accounting students may not use their full moral capability when facing
ethical accounting dilemmas and have higher prescriptive reasoning scores than deliberative
reasoning scores (Thorne 2001). The current study is the first to examine how the modes of
deliberative reasoning utilized by accounting students are affected by an accounting university
education and how this ultimately affects ethical decisions. Understanding these issues will allow
accounting educators to better understand possible deficiencies in the ethical decision making of
accounting students beginning their accounting education as well as those who are on the verge of
completing theirs and, hence, provide some direction in terms of what needs to be emphasized in
order to improve students’ ethical decision making.
University accounting educators are typically charged with teaching at least two accounting
courses to non-accounting business students. Treating them the same as accounting students may
negatively impact the effectiveness of the ethics education they receive if the ethical decision
making of these two groups of students differs. In fact, a disproportionately high level of accounting
students and practicing accountants has a sensing/thinking cognitive style that is associated with
low levels of ethical reasoning (e.g., students: Geary and Rooney 1993; Fisher and Ott 1996; and
practicing accountants: Vaassen et al. 1993; Schloemer and Schloemer 1997; Abdolmohammadi et
al. 2003). Studies indicate that accounting students have the same or higher cognitive moral
capability, the degree to which an individual may potentially incorporate higher order principles
into his/her ethical reasoning (Thorne 2001), than other business students (Icerman et al. 1991;
Jeffrey 1993). The current study again compares the ethical reasoning of first-year accounting and
first-year business students. The study compares deliberative reasoning rather than cognitive moral
capability because, as discussed above, this may be a more relevant measure of ethical decision
making.
COGNITIVE MORAL CAPABILITY AND DELIBERATIVE REASONING
Most ethical research in accounting has assessed ethical reasoning using Rest’s (1979)
Defining Issues Test (e.g., Lampe and Finn 1992). The Defining Issues Test (DIT) calculates an
individual’s p-score, a measure of cognitive moral capability. Higher cognitive moral capability has
been linked to better ethical decision choices in practicing accountants (Ponemon 1992), accounting
students (Abdolmohammadi and Baker 2007), university students (West et al. 2004), and
individuals generally (Blasi 1980). Empirical results, however, have been mixed (see Blasi 1980;
Rest 1986 for reviews). Statistically significant relationships have been found in about two-thirds of
the studies reviewed in Rest (1986), and the size of the correlation has been modest. Cognitive
moral capability explains 10–15 percent of the variation in ethical behavior (Thoma 1994).
Issues have been raised about the relevance of using cognitive moral capability as a measure of
ethical reasoning (e.g., Thorne et al. 2003). Thorne (2000, 2001) argues that while cognitive moral
capability measures the level of principled ethical considerations of which an individual is capable,
it does not describe the actual level of principled ethical considerations an individual applies in
resolving an ethical issue. Empirical results suggest, for example, that cooperative accounting
students do not use their full cognitive moral capability when making accounting-specific ethical
decisions (Thorne 2000, 2001). Cognitive moral capability is also measured in a context-free setting
as opposed to, say, an accounting setting. This is an issue since it is widely held that context plays a
major role in ethical decisions (e.g., Shaub 1994; Arnold 1997; Rest et al. 1999).
400 Thomas
Issues in Accounting Education
Volume 27, No. 2, 2012
The current study assesses deliberative reasoning, ‘‘the formulation of an intention to act on a
particular moral (ethical) dilemma’’ (Thorne 2001, 106). Rest et al. (1999) posit that individuals are
more likely to use more principled ethical reasoning to resolve context-free ethical issues than
issues they face in everyday life. In support of this, Thorne (2001) found that accounting students’
cognitive moral capacity was significantly greater than their deliberative reasoning. Consequently,
Earley and Kelly (2004) suggest that it would be interesting to examine potential differences
between the results obtained using the DIT measure of cognitive moral capacity and accounting
specific measures such as Thorne’s (2000, 2001) measure of deliberative reasoning.
MODES OF DELIBERATIVE REASONING
A multidimensional ethics scale (MES) has been used in a number of studies (e.g., Flory et al.
1992; Cohen et al. 1993, 1996, 2001) to measure the use of different modes of reasoning in
resolving ethical issues. The MES assumes that individuals can use one or more rationales in
making ethical decisions and that the reliance on these rationales may vary with the decision
context. Moral equity, contractualism, relativism, utilitarianism, and egoism are five rationales of
ethical reasoning from the moral philosophy literature that have been identified (Reidenbach and
Robin 1988). Moral equity posits that decisions should be evaluated in terms of their inherent
fairness, justice, goodness, and rightness. With contractualism, decisions are based on the implied
responsibilities individuals have toward each other. Relativism proposes that ethical decisions
depend on their context; there are no universal rules. Utilitarianism asserts that decisions should be
based on the outcome; the goal being to maximize benefits and minimize costs. Like utilitarianism,
egoism is focused on benefits and cost, but with egoism, the focus is on the individual decision
maker rather than society (Reidenbach and Robin 1990).
Previous studies using the MES approach have used general business (e.g., Cohen et al. 1992,
1996; Reidenbach and Robin 1990), management accounting (e.g., Flory et al. 1992), and auditing
contexts (Ge and Thomas 2008). Empirical results indicate that auditors were most aware that
actions were culturally/traditionally unacceptable (relativism) and least aware that they violated
rules and unspoken promises (contractualism). Auditors and business students relied on moral
equity, contractualism, and utilitarianism but not relativism when assessing the morality of most of
the actions taken. Auditors relied primarily on these same three factors when determining if they
would perform the act (Cohen et al. 1996, 2001).
COGNITIVE MORAL DEVELOPMENT AND MODES OF
DELIBERATIVE REASONING
Research indicates that the five modes of deliberative reasoning used by decision makers are
affected by their level of deliberative reasoning (Ge and Thomas 2008). The five modes of
deliberative reasoning have been placed into three levels described by Kohlberg’s (1969, 1976)
Cognitive Moral Development (CMD) Theory. At the pre-conventional level, decisions are based
on the benefits the decision maker will experience as a result of the decision. This is consistent with
the egoism approach identified by Reidenbach and Robin (1988). At the conventional level, the
focus is on the expectations of significant others. This is consistent with relativism, another of the
five modes of ethical reasoning. With relativism, ethical rules are not universal; they are
context-dependent. At the post-conventional moral development level, individuals apply universal
ethical principles when making ethical decisions. This is consistent with the other three modes of
reasoning identified by Reidenbach and Robin (1988). At this level, individuals consider universal
fairness (moral equity), the good of society (utilitarianism), and personally held principles
(contractualism) when making ethical decisions.
Ethics and Accounting Education 401
Issues in Accounting Education
Volume 27, No. 2, 2012
HYPOTHESIS DEVELOPMENT
Empirical results suggest that a university education has a positive effect on the cognitive
moral capability of accounting students (e.g., Armstrong 1987, 1993; Armstrong and Mintz 1989;
Bernardi 1995; Cohen and Pant 1989; Ponemon 1993; Ponemon and Glazer 1990; St. Pierre et
al.1990). Although research indicates that accounting students do not use their full cognitive moral
capability when facing accounting-specific ethical dilemmas, it has been found to be positively
correlated with deliberative reasoning (Thorne 2001). It is, therefore, expected that a university
education will have a positive effect on deliberative reasoning. The first hypothesis is, therefore, as
follows:
H1: Senior accounting students use higher deliberative reasoning than first-year accounting
students.
Students choosing accounting have a cognitive style associated with low levels of ethical
reasoning (e.g., Geary and Rooney 1993; Fisher and Ott 1996; Abdolmohammadi et al. 2003).
However, research indicates that first-year accounting students have a higher moral capability than
first-year business students (Jeffrey 1993). The current study, therefore, revisits this issue, this time
examining deliberative reasoning, the level of principled ethical considerations actually applied to
resolve ethical dilemmas, instead of cognitive moral capability or prescriptive reasoning, the level
of principled ethical consideration an individual is capable of using (Thorne 2001). The second
hypothesis is, therefore, stated in the null form as follows:
H2: There is no difference between the level of deliberative reasoning of first-year accounting
and first-year business students.
Since the five modes of deliberative reasoning used by decision makers are affected by their
level of deliberative reasoning (Ge and Thomas 2008) and senior accounting students are
hypothesized to have higher deliberative reasoning than first-year accounting students (H1), it
follows that senior accounting students will make more frequent use of higher modes of deliberative
reasoning. On the other hand, it is unclear whether first-year accounting students have higher
deliberative reasoning than first-year business students, so no predictions can be made regarding
their use of different modes of deliberative reasoning. The next two hypotheses are, therefore, as
follows:
H3a: Senior accounting students make more use of post-conventional modes of deliberative
reasoning than first-year accounting students.
H3b: There is no difference in the use of post-conventional modes of deliberative reasoning
between first-year accounting and first-year business students.
Cognitive moral capability is the highest level of principled ethical consideration of which an
individual is capable and has been linked to more ethical decisions (e.g., Abdolmohammadi and
Baker 2007). Research indicates that higher deliberative reasoning leads to more ethical decision
choices (Ge and Thomas 2008). Since senior accounting students are expected to use higher
deliberative reasoning than first-year accounting students, they are further hypothesized to make
more ethical decisions. Also, since it is hypothesized that there will be no difference between the
deliberative reasoning of first-year accounting and business students, it is further hypothesized that
there will be no difference in the number of ethical decisions they make. The remaining hypotheses
are, therefore, as follows:
H4a: Senior accounting students make more ethical decisions than first-year accounting
students.
402 Thomas
Issues in Accounting Education
Volume 27, No. 2, 2012
H4b: There is no difference in the ethical decisions of first-year accounting students compared
with first-year business students.
RESEARCH METHODOLOGY
Subjects
Subjects consisted of 70 senior accounting students with approximately four accounting
courses to complete, 42 first-year accounting students, and 106 first-year business students at a
western Canadian liberal education university. Their average ages were 24 years, 21 years, and 21
years, respectively, with age ranges 20 to 36, 18 to 35, and 18 to 37, respectively. Of the senior
accounting students, first-year accounting students, and first-year business students, 36 percent, 50
percent, and 44 percent, respectively, were female. Participation was anonymous and voluntary.
Instrument
The current study combined Thorne’s (2000) accounting-specific defining issues test (DIT)
instrument based on Rest’s (1979) instrument and the MES approach. Subjects responded to four
scenarios, each involving an ethical auditing dilemma, as they believed the person in the case would
respond. Response choices were either that the unethical action would be taken, would not be taken,
or that the subject could not decide. In making the decision, different issues needed to be
considered. Subjects ranked the importance of each issue, on a scale ranging from 1 (Great) to 4
(No). They then ranked the four issues of greatest importance for making the decision. According to
their rankings, the individual’s level of deliberative reasoning was determined by calculating a pscore, ranging from 0 to 95, determined from the ranking that the individual assigned to postconventional items of consideration in resolving an ethical dilemma (Thorne 2000). Other studies
have also employed Thorne’s (2000) instrument to test the ethical reasoning of accounting
professionals (e.g., Thorne et al. 2003) and accounting students (e.g., Ge and Thomas 2008;
Bernardi et al. 2002).
The MES scale was used in previous accounting studies (e.g., Ge and Thomas 2008; Cohen et
al. 1998, 2001). The procedure followed was the one that was used in the Ge and Thomas (2008)
study. For each of the four scenarios, subjects were asked to assess the action according to the five
MES factors comprised of 13 items: three each for moral equity, utilitarianism, and relativism; and
two each for contractualism and egoism, using a seven-point Likert-type scale. The items for moral
equity, for example, had end points ‘‘fair/unfair,’’ ‘‘just/unjust,’’ and ‘‘morally right/not morally
right.’’ Item scores were averaged for the moral equity, contractualism, and relativism factors. The
Cronbach’s alpha measure for these items exceeded the 0.70 score recommended by Nunnally
(1978). When the Cronbach’s alpha measure was low, through trial and error, the item combination
with the highest alpha score would be used. The Cronbach alphas for egoism and utilitarianism
were less than 0.60, regardless of the item combinations, so the item deemed best to represent the
factor was chosen. For egoism, for example, it was believed that the item ‘‘personally beneficial/not
personally beneficial’’ was a superior measure to the item ‘‘in the best interest of the audit firm/not
in the best interest of the audit firm.’’ For utilitarianism, the item ‘‘minimizes benefits while
maximizes harm/maximizes benefits while minimizes harm’’ was chosen. Table 1 reports reliability
measures (Cronbach’s alphas) for each of the scales. These measures were comparable with the Ge
and Thomas (2008) study, which had alphas ranging from 0.814 to 0.892, 0.870 to 0.903, and 0.689
to 0.820 for moral equity, contractualism, and relativism, respectively. This study also used one
item each for egoism and utilitarianism because of low alpha values. The alpha scores of the present
study were also comparable to those of the Cohen et al. (1998, 255) study. The Cohen et al. (2001)
Ethics and Accounting Education 403
Issues in Accounting Education
Volume 27, No. 2, 2012
study did not give detailed alpha scores, but the reported scores appear comparable (Cohen et al.
2001, 6).
RESULTS
Table 2 presents the ages, working hours per week, number of years of work experience, and
grade point averages of the subjects. While there were significant differences, these factors were not
correlated to deliberative reasoning (Table 3). An analysis of variance indicated no relationship
between deliberative reasoning (p-scores) and gender. Table 4 presents the results of an analysis of
variance and multiple comparison tests of the deliberative reasoning of first-year accounting,
first-year business, and senior accounting students. Since empirical results suggest that a university
education has a positive effect on cognitive moral capacity (e.g., Armstrong 1987, 1993; Armstrong
and Mintz 1989; Bernardi 1995; Cohen and Pant 1989; Ponemon 1993; Ponemon and Glazer 1990;
St. Pierre et al. 1990), and cognitive moral capacity is positively correlated to deliberative reasoning
(Thorne 2001), it was hypothesized (H1) that senior accounting students would have higher
deliberative reasoning than first-year accounting students. Table 4 presents results in support of H1.
TABLE 1
Reliability Measures (Cronbach’s Alphas) for each of the Multi-Dimensional Ethics Scale
(MES) Items
Cases
1234
Moral Equity 0.954 0.934 0.874 0.940
Contractualism 0.923 0.942 0.958 0.865
Relativism 0.729 0.765 0.760 0.724
Utilitarianism and egoism were measured using one scale.
TABLE 2
Descriptive Information
Means
(S.D.)
p-value
First-Year Senior
Accounting
Students
(n ¼ 42)
Business
Students
(n ¼ 106)
Accounting
Students
(n ¼ 70)
Age 20.57 21.63 24.26 0.000
(3.62) (5.84) (3.38)
Working hours per week 9.62 7.75 16.36 0.001
(10.53) (10.10) (14.69)
Number of years of work experience 1.89 2.12 2.87 0.123
(0.43) (0.26) (0.34)
Grade Point Average (GPA) 3.15 3.01 3.19 0.056
(0.41) (0.49) (0.41)
404 Thomas
Issues in Accounting Education
Volume 27, No. 2, 2012
TABLE 3
Pearson’s Correlations among Selected Items for Subjects
Age Work1 Week2 GPA p-score
Age 1
Work1 0.688** 1
Week2 0.374** 0.460** 1
GPA 0.019 0.050 0.018 1
p-score 0.080 0.086 0.057 0.142 1
** Correlation is significant at the 0.01 level (two-tailed).
Work1 ¼ Number of years of work experience.
Week2 ¼ Working hours per week.
TABLE 4
Deliberative Reasoning Scores
Panel A: The Deliberative Reasoning (p-scores) of First-Year Accounting, Business, and
Senior Accounting Students
Subject Mean Std. Deviation
First Yr. Bus. Students 0.28537 0.151840
First Yr. Acc. Students 0.27640 0.165389
Senior Acc. Students 0.33893 0.134773
Total 0.30084 0.150997
Panel B: Tests of Between-Subjects Effects
Source Type III Sum of Squares df Mean Square F Sig.
Corrected Model 0.152 2 0.076 3.407 0.035
Intercept 17.069 1 17.069 765.228 0.000
Subject 0.152 2 0.076 3.407 0.035
Error 4.796 215 0.022
Total 24.678 218
Corrected Total 4.948 217
Panel C: LSD (Least Significant Difference) Multiple Comparisons of p-scores
(I) Subject (J) Subject
Mean Difference
(I J) Std. Error Sig.
First Yr. Acc. Students First Yr. Bus. Students 0.00898 0.027231 0.742
Senior Acc. Students 0.06253* 0.029150 0.033
Senior Acc. Students First Yr. Bus. Students 0.05356* 0.023002 0.021
First Yr. Acc. Students 0.06253* 0.029150 0.033
* The mean difference is significant at the 0.05 level.
Ethics and Accounting Education 405
Issues in Accounting Education
Volume 27, No. 2, 2012
