Ethical Judgments on Selected Accounting
Issues: An Empirical Study
ABSTRACT. This study investigates the judgments made by
accounting majors when confronted with selected ethical
dilemmas that pertain to accounting practice. Drawing upon
literature in philosophy and moral psychology, it then
examines these judgments for potential gender differences.
Five case studies, each involving a specific ethical dilemma that a practicing accountant might face, were administered
to 151 acounting majors (males - 67; females - 84), in
four sections of intermediate accounting II at a large, state university. The results suggest that although the vast
majority of participants would not engage in unethical
behavior, a reasonable opportunity exists to improve the
participants' ethical awareness. The results do not, however, support the existence of gender differences in ethical
Keith G. Stanga
Richard A. Turpen
f inancial responsibilities have become increasingly
common. These stories appearing in the WallStreet
In recent years, reports of unethical behavior among
business personnel entrusted with accounting and
• Rockwell International Corp. pleaded guilty to federal
criminal fraud charges in connection with a doublebilling scheme on a defense contract (Read, 1989, p. A4).
• CompuScan Inc.'s former assistant treasurer pleaded
guilty to federal charges that he participated in a
scheme to misuse nearly $1 million of company funds
(WallStreetJournal, 1989, p. C16).
• A former operations manager for Prudential-Bache
Securities Inc. pleaded guilty to mail fraud and
embezzlement from the company's mutual fund
house accounts (Wall StreetJournal, 1989, p. C 18).
• A former accountant with the Department of Housing and Urban Development was indicted by a federal grand jury in Denver for allegedly embezzling about
$1 million from a federal program designed to help
poor families obtain housing ( Wall StreetJournal, 1989,
Keith G. Stanga is Distinguished Professor of Accounting at the University of Tennessee, Knoxville. His most recentpublications include a book, Intermediate Accounting ( 3rd edition,
Harcourt Brace Jovanovich, 1989, 1486 pp.), and articles
published in the Journal of Accountancy, Accounting and
Business Research, Accounting Horizons, and Advances
in Accounting. ProfessorStanga's teaching and research interests are in financial accounting. His most recent research topics have included the relevance of segment cashflow reporting, the Financial Accounting Standards Board's conceptualframework, and the last-in,first-out method of inventory costing.
Richard A. Turpen is an Assistant Professor at The Universi~ of Tennessee, Knoxville. His primary teaching interest is in
financial accounting, while his research focuses mainly on
competitive issues in the market for audit services. Professor Turpen has published most recently in Auditing: A Journal of Practice & Theory.
• T he former chairman of MiniScribe Corp. and virtually all of the company's top management and accounting staff were apparently involved in deliberate financial statement falsification over at least a four-year period (Zipser, 1989, p. A1, A8).
• The chairman and chief financial officer of the parent
corporation for the troubled Lincoln Savings & Loan
Association testified before Congress that the company has engaged in intentionally obscure accounting practices (Thomas, 1989, p. A14).
• Southern Co.'s Gulf Power Co. subsidiary pleaded
guilty to two felony charges of conspiracy to make
illegal political contributions and tax evasion and paid
$500,000 in fines as a result of having established an
elaborate accounting system to disguise and hide the
illegal payments from the Internal Revenue Service
(Christie, 1989, p. B7).
• A study by the National Association of Accountants
revealed that some 87% of the managers surveyed
Journal of Business Ethics 10:...
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