Counting on accounting

While work experience and level of education affect ethical decision-making, a person’s religiosity has the most profound impact on their ethical perspectives, according to research from L. Murphy Smith, CPA and professor of accounting.

Ethics come into play when considering the impact of your decisions and actions on others around you, whether that’s family, friends or a corporation. Smith’s co-authored journal article “Do Gender, Educational Level, Religiosity, and Work Experience Affect the Ethical Decision-Making of U.S. Accountants?” is an analysis guided by a survey of 171 graduate and undergraduate accounting and business students.

When it comes to religion, having accountability to a higher power and fulfilling the expectations of a religious community can influence how people make decisions. According to Smith, all major world religions provide ethical guidelines, which often lay down a basic ethical foundation for doing business and relating to other people. “I think it just goes to the core of how people look at the world,” he explains. “The popular expression is worldview. Everybody has a worldview, that is, a perspective on how the world is seen and interpreted.”

Survey results show that gender is not a significant factor in ethical decision-making. According to Smith’s research, the parallel in gender-based decision-making may be explained by the increasing participation of women in accounting educational programs and the workforce.

Research also shows that students with work experience, in terms of internships, tend to have a less egocentric attitude toward ethics. Work experience illustrates first hand that if you want to make decisions ethically, there should be more to guide you than simply maximizing short-term personal pleasure or profits of the firm, Smith says. In the long-term, both personal satisfaction and corporate profits depend on ethical behavior.

The research also shows that none of the surveyed students feel accounting decisions are amoral.

“People are counting on us,” Smith said. As in the morality tale of Enron, various people are impacted by unethical accounting decisions. Enron’s investors, stockholders, lenders and employees were all financially affected when they relied on misleading and inaccurate accounting information.

Smith plans to conduct further research on ethical decision-making to address what goes into the decision-making process, as well as how accounting standards help people make more ethical decisions. He is currently gathering data from working business managers to obtain their ethical perspectives.

The research, forthcoming in Critical Perspectives in Accounting, was co-authored by A. Craig Keller of Southwest Missouri State University and business writer Katherine T. Smith.

— Ashley N. Coker