Ethics and high morality are in high demand today especially among corporate America, and specifically within the accounting profession. After the ethical failures of Enron and WorldCom, a public outcry for future preventative measures resonated throughout the American Institute of Certified Public Accountants (AICPA), and the accounting community at large. Consequently, the Securities and Exchange Commission (SEC), the overseeing government board of the AICPA, released the Sarbanes-Oxley Act of 2002, otherwise known as SOX. The act requires a higher performance standard for accounting firms and the audits they perform to prevent future accounting scandals. SOX, which has been extremely beneficial, doesn’t change the ethical standards of an individual but instead takes away most of the opportunity to commit a scandalous act. The basic character of the fraudulent individual remains corrupt, even with legislation in place. The question is then posed: Can ethics be taught, and if so, what accounting or business ethics courses are available? The answer is not ironclad as the word ethics describes the morality of an individual, which is hard to measure. There are also very limited courses offered on ethics, however ethical education should be a required course in college and a prerequisite to new employment for all accounting firms.
Most higher education institutions, and some high school level institutions, are implementing brief ethical materials into their curriculum, but very few offer courses on the subject. The basic argument against incorporating a required accounting ethics course is that there isn’t any proof that individuals who take a course would be any more ethical than they already are. If this is truly the singular obstruction to imposing an accounting course in ethics, than why aren’t other courses in the curriculum subject to examination from proof. Many audits, specifically those at Enron and WorldCom, have failed because of poor functional accounting knowledge, not just ethical queries. Most other curricular accounting courses would fail a proof assessment required by those who oppose an accounting ethics course. It is necessary to have an accounting ethics course to properly prepare students for any future ethical temptation they may experience within the field. Without experience in fraud recognition or ethical righteousness, many new timid accountants are susceptible to fraud or ethical dilemmas. A recommendation would be to add not just one course on ethics into a curriculum, but possibly three or four. A course in ethical theory could tie into another ethics course involved in spotting frauds and ethical dilemmas while a third course could focus on answering these ethical uncertainties.
The need for an accounting ethics course is also very apparent in how much destructive attention financial catastrophes attract to the profession. The recent big company accounting scandals all brought negative publicity to the accounting field. The burden of the economic failures in today’s society must be placed somewhere, and many people look at accountants as an outlet to place that burden. All of these events from big companies provide a negative perception of the accounting field, and that’s not to mention the small business owners who have encountered other accounting mistakes or unethical occurrences. This is not to say that legitimate and honest mistakes will not be made by new students, but the ability to recognize the mistakes and evaluate ethical problems can be reduced with the addition of an ethics course. The more education and experience that new accountants have and acquire the fewer mistakes that will occur, and ultimately the less negative publicity the profession will receive. It is extremely important that in the accounting profession, clients feel secure and trusting of those who they employ.
Another need for an ethics course comes from a common stereotype of accountants. The stereotype is that accountants are known to simply follow the rules, or do just enough to meet the basic criteria. To correct ethical dilemmas, it is required to go above and beyond the norm to investigate and solve uncertainties. A class in the area of ethics could help prepare and motivate new accountants to become more proactive when evaluating a possible unethical or fraudulent scenario. Clients will feel a greater sense of security with a proactive accountant, and ultimately bring more profit to the profession.
Society can not function without ethical people. The business world and accounting profession can not function without ethical people. It is for this reason that an accounting ethics course or courses are imperative. The elimination of stereotypes, fewer mistakes, and a heightened sense of awareness is exactly what could be acquired from an accounting ethics course. It is important to add ethics courses immediately, and for employers to require that their new hire’s be educated in ethics knowledge. If an employee is not educated and courses are not offered, employers should take measures to offer a mandatory ethics course within their organization.