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Ethical Decision Making in Accounting Paper
Alberto
Benavides
Liberty University
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Abstract
Ethical decision making in the accounting occupation is a critical part of the standards of the
AICPA code of professional conduct. “According to Zhou (2022), ethical decision making
refers to the socio-cognitive process where a person makes and acts upon a moral decision,
which involves the free-will choices of the decision maker that may harm or benefit others.”
Two of the most significant ethical models for decision making center around the Kohlberg’s
Cognitive Development Approach and Rest’s four-component model for ethical decision
making. Kohlberg’s model is catered around a six-stage sequential technique that involves three
basic levels. These three basic levels are centered around moral development. However, Rest’s
model supplies individuals with four components of moral development and etiquette,
encompassing moral sensitivity, judgment, focus, and character. These two models do
harmonize the business standards of the accounting occupation as well as help to likely impact
and ameliorate the AICPA code of professional conduct.
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Ethical Decision Making in Accounting Paper
In the accounting occupation, the tradition of ethical decision making is a critical
concept in certifying a business nourishes validity, honesty, and solidarity in their business
standards. In order to better comprehend the rationalization supporting the decision making
standards of individuals, investigation was performed sanctioning the development of
countless ethical decision making models including Kohlberg’s cognitive development
approach and Rest’s four-component model of ethical decision making. These models have
been designed to properly convey the undertaking of cognitive and moral development, as
well as the elements that impact the ethical decision making of individuals. The evaluation of
these two significant ethical decisions producing models will occur. Furthermore, how they
impact the organizational culture of the accounting occupation, and individually how they
impact their advancements to the AICPA code of professional conduct. Upon conclusion, an
analysis of the quarrels made linking both ethical decision making models, including
analyzing each of these model’s standards and procedures.
Kohlberg and his Cognitive Development Approach
The foremost of these two ethical decision making models I will be analyzing is
Kohlberg’s Cognitive Development Approach. “According to Goldschmidt e al (2020),
Kohlberg’s theory of moral development has maintained a dominant position in cognitive moral
development literature over several decades.” The cognitive development approach was initially
developed by Lawrence Kohlberg, an American psychologist strongly influenced by the efforts
of Jean Piaget, who focused on the influences of which an individual’s moral decision making
capabilities. “According to Mathes (2021), each stage is qualitatively different from the
previous stage and each successive stage is more comprehensive than the previous stage.”
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Cognitive moral development is a six-step process through three varying stages: moral logic,
pre-conventional, conventional, and post-conventional. This three-level, six step process
eventually mandates individuals to fully develop from a self-absorbed affirmation of ethical
decision making to one focused on personal accountability to what is morally righteous for
sovereignty.
Organization Culture of the Accounting Occupation (Kohlberg)
Organizational culture can be defined as the unified set of values of individuals of a
certain organization that can demonstrated through an organization’s business practices.
Within the occupation of accounting, one could infer the common organizational culture
across all accounting organizations to be the AICPA. “As written by AICPA (2014), the
AICPA membership adopted the code of professional conduct (the code) to provide guidance
and rules to all members in the performance of their professional responsibilities.” These
regulations and guidance include procedures like ethical culpability, assisting the public
prominence, and maintaining integrity, honesty, and autonomy of executing and
demonstrating occupational responsibilities.
The evaluation of Kohlberg’s cognitive development approach regarding business
values in the accounting world, as an individual corporeally progresses in due time, there
triumphant obedience to a business culture would connect with their groundwork
development. In reference to Kohlberg’s model, as an individual advances through the
earliest stages towards the advanced stages, an individual begins to conform to behavioral and
societal expectations. Moreover, this latest congruence to behavioral and communal beliefs
leads the way to a surge in the possibility of an individual following the framework of rules
and procedures. In theory, an individual advances through the stages of Kohlberg’s model.
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They progress while complying to the rules and regulations, such as those supplied in the
business culture of the accounting occupation.
Probable Impact and Developments on the AICPA Code (Kohlberg)
When arriving to the probable impacts of Kohlberg’s ethical decision making model
could have on the AICPA Code model, one could sway in reference to the effect maturity
could have on ethical decision making. There is experimentation detecting direct impacts of
ethical maturity and habits on ethical decision making. Moreover, it supports ethical decision
making within the accounting occupation to be a direct connection of a decision creator
obtaining ethical and moral growth-hood. “The AICPA Code is to act as a guide in the
performance of an accountant’s professional responsibilities, as well as express the principles
of ethical and professional conduct (AICPA, 2014).” One advances mentally through
Kohlberg’s model and starts to obtain a greater ethical growth-hood while becoming better
prepared to support the regulations of the AICPA Code through the development’s immediate
guidance of an individual’s ethical decision making aptitude. Furthermore, the ethical, moral,
and corporeal extension one encounters through Kohlberg’s model directly enhances one’s
capability to endorse the AICPA Code, thereby, boosting the AICPA Code model.
Rest’s Four-Component Model of Ethical Decision Making
The next model up for analyzation is Rest’s four-component model of ethical decision
making. “As written by Rogers & Breakey (2023”, “Professor James Rest, specifically his
four-component model (FCM) designed to understand and improve moral behavior. Deriving
from his 1980s to 1990s empirical work, Rest identified four psychological processes that must
happen for ethical behavior to occur: interpretation, judgement, decision (or motivation), and
implementation.” “As written by Rankin et al (2023), he concluded ethical actions are a result
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of individuals going through (1) moral awareness (recognizing the dilemma), (2) moral
judgment (use of prescriptive reasoning to form judgments), (3) moral focus (motivation to
comply or not comply with the ethical judgment) and (4) moral character (action that
highlights one's character).” James Rest used what was referred to as a “Neo- Kohlbergian
approach” that incorporated the virtuous evolution undertaking. The element of moral
sensitivity is the aptitude of an individual to extrapolate whether or not a condition is morally
relevant or possibly complicated. Moral judgment touches on the execution of thinking
logically to dictate which course of action of planned viewpoint would be favored. Moral
motivation refers to the undertaking of following through on one’s moral reasoning by
choosing moral values over nonmoral codes pertaining to one’s own self- interests. The state
of moral augmentation refers to ability of independently carrying out their moral conclusions
and what possible provocations may happen.
Organizational Culture of the Accounting Occupation (Rest’s)
As mentioned above, business habits refer to the customs divided and exemplified by
a business’s practices members and employees. Within the accounting occupation, this
divided set of values possessed by accountants would likely comprise the organizational
culture would be the various rules, regulations, and principles within the AICPA Code.
Upon the analyzation of Rest’s model with respect to the organizational culture of the
accounting occupation, one must review the aspects of culture to establish the connection with
Rest’s model. Of the various aspects of organizational culture, two of the primary aspects that
connect to the processes and components of Rest’s model are the values and practices of the
organization in question. With Rest’s model, the modules of moral sensitivity and acumen
take part in the character of determining whether any ethical concerns are adjacent, analyzing
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potential trajectories of efforts to distinguish whether or not they are moral, while determining
the trajectory of effect that will be executed. Just as these components establish the ethical
issues and determines the correct practices to be taken in response. Furthermore, an
organizational culture establishes the values of the organization and the determines the
practices that will be used for implementation of their values. In turn, when evaluating Rest’s
four-components model in regards to the organizational culture of the accounting occupation,
we identify similarities in the methodology used for determination and implementation. Next,
we will discuss the potential impacts and development of Rest’s four-components model have
on the AICPA Code.
Probable Impacts and Developments on the AICPA Code (Rest’s)
With regards to the probable impacts and developments of Rest’s four-components
model could have on the AICPA Code, we need to determine the structure casted off in the
augmentation of Rest’s model. With Rest’s model, unlike the progressive step-by-step
structure used in Kohlberg’s Cognitive Development Approach, Rest implements a looping
sequence for the interaction between the different components of the model (Mintz & Morris,
2020). This uninterpreted complexion of Rest’s model permits for a degree of continuous
advancement of one’s ethical decision making skills. This ability for continuous improvement
of an individual’s ethical decision making creates a potential for gradual advancement of their
obedience to the AICPA Code. “The AICPA code acts as a set of rules, regulations, and
principles to ensure accountants act in a manner that exhibits the ethical qualities of integrity,
responsibility, honesty, and objectivity (AICPA, 2014).” The development of advancement of
an individual’s ethical decision making abilities will generate a development for advancement
to an individual’s obedience to the AICPA Code as well. This is due to the immediate
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consequence of improved ethical decision making habits that will have on the other
characteristics of a person’s ethical practices within the AICPA Code.
Quarrels Between the Corresponding Models
In the case of the quarrels between the corresponding Kohlberg and Rest’s ethical
decision making models, their styles in their ideas that can create a discussion. The predominate
quarrel exists between the use of the two model’s sequencing method by which individuals
progress via stages. In the case of Kohlberg’s cognitive development approach, Kohlberg
proclaimed people advance in what he mentioned to as a sort of flight of steps model to move
from stride to stride. People start their cognitive and moral logic at the initial stage and advance
to the next stages required until one sets foot on their climax of moral development. The
dilemma with this ideology occurs in the fact that, by using this progressive sequence of
development, one assumes that all individuals proceed through their process of moral
development in a near identical and universally adhered to manner.
On the other hand, while this looping sequence creates the ability for continuous
improvement of one’s ethical decision making practices, it also creates an ability for
individuals to have adequacy within one component of the model without possessing
adequacy of another (Mintz & Morris, 2020). Thereby, manifesting the occasion for moral
failure if a shortfall occurs, as well as an extra coat of responsibility on the part of individuals
that must be carried out to ensure they have sufficient development for each component of the
model. This extra coat is not required with Kohlberg’s model. Due to its successive essence,
an individual cannot advance in their moral development until sufficiency has been fulfilled
in the previous stage of the model.
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While both Kohlberg and Rest’s models have their matter in questions regarding the
procedures of moral development, they furnish people with appropriate systems for cognitive
and moral development. Moreover, based on the particulates mentioned aloft, if there is a way
to have to select the model most mass fitting for the accounting occupation, Rest’s four-
component model of ethical decision making would be the most mass fitting. The looping
sequence used with Rest’s model provides a more advantageous method of uninterrupted
moral development for individuals in the accounting occupation.
Christian Worldview
Regarding the Christian Worldview, Kohlberg’s model of ethical decision making,
various aspects of Kohlberg’s model connect to various biblical passages. As Christians, we
don’t begin with the “meat” of the word in the revitalization our divine maturation. Instead,
we start as newborns with the milk of the word, and in time grow to the meat. In similar
aspects, with Kohlberg’s model, one does not begin in the endmost stages of moral
development. Instead, we begin with Stage 1 and slowly work our way to the endmost stage
as we progress. In order for maturation to progress we must move within the limits, there are
actions that must transpire. Whether it be in our existence as God-fearing people or in our
righteous and moral development, it is recommended we follow the pathway of
achievement.
Conclusion
In retrospect, the acts of ethical decision making gambols a critical role in the
accounting occupation. Hereby creating the need for an adequate model for the practice of
ethical decision making in accounting. Of the models for ethical decision making, Kohlberg’s
cognitive development approach and Rest’s four-components model provide us with a great
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insight into the innerworkings of these models. By implementing an appropriate ethical
decision making model for an organization in the accounting occupation, one can ensure
greater chances of obedience to an organization’s cultural habits, as well as the AICPA code of
professional conduct.
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References
American Institute of Certified Public Accountants. (2014). AICPA Code of
Professional Conduct
https://us.aicpa.org/research/standards/codeofconduct.html
Bible Gateway. (2023). Bible Gateway Online.
https://www.biblegateway.com/passage/?search=1%20Corinthians
%2012%3 A15-20&version=NIV (Original work published 1973)
Goldschmidt, L., Langa, M. & Alexander D., Canham, H. (2020). “A review of
Kohler’s theory and its applicability in the South African context through the
lens of early childhood development and violence”. Early Childhood
Development and Care, Volume 191 Issues 7,8
Mathes, E. (2021) “An evolutionary perspective on Kohlberg’s theory of moral
development”, “Current Psychology”, 40, pages 3908–3921
Mintz, S., & Morris, R. (2020). Ethical obligations and decision making in
accounting: Text and cases (5th ed.). NY, NY. McGraw-Hill Education.
Rankin, R., Driskill, T., Hartmann, C., & Cassle, J. (2023), “Compromising your
morals: The perils of new beginnings as an auditor”, International Journal of
Auditing, https://doi.org/10.1111/ijau.12321
Rogers J., Breakey H. (2023). “James Rest’s four component model (FCM); A case
for its central place in legal ethics”, Leading Works in Legal Ethics. First
Edition
Zhou, M. (2022). “Educating translation ethics: a neurocognitive ethical decision
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