Kohlberg’s theory on decision making is made up of six stages made up of three levels.
Preconventional level is made up of stage one and two. In the preconventional level Kohlberg
believes that decision making is all about yourself and being only concerned with how the
outcome will affect you and no one else. The second level is called conventional and is made
up of stage three and four. Conventional level decision making is about doing what is best for
everyone according to want society wants. Your personal judgement also comes into play by
taking ownership of the decision made even if it does go against what society wants. The final
level of decision making is post-conventional and is made up of stage five and stage six. Post-
conventional is making decisions based on what is morally and legally right. In this level you
are also able to find precedence for the decision made, meaning you have done research and
have examples of decisions made by others facing the same type of situation that you are
currently facing.
For case study 1-7 Eating Time, I decided to not use Kohlberg’s decision-making theory. I
decided to use Rest’s four component model of ethical decision making to analyze this case.
Rest’s four components are moral sensitivity, moral judgement, moral focus, and moral
character.
Moral sensitivity is knowing something is not quite right with what you are being asked to do
but you can’t put your finger on what exactly the ethical issue is. In the study case you begin
to see this being displayed when the partners ask Kevin why it is taking him longer to
complete his audit work than what it did his predecessor’s. He is uncomfortable with the
question especially since he is a new employee and is still learning while working on the job.
This statement puts Kevin on the defensive because his work ethics are being questioned.
Moral judgement is all about “what ideally ought to be done.” (Mintz and Morris, 2020, p.78)
In this phase of Rest’s decision-making process there is less focus on self-interest and more
on group-based perspectives. In the case study the partners are more focused on what ought to
be done by not charging a client with the true about of time it takes to complete an audit. It
could be inferred that the partners are more focused on keeping a clients pricing down to keep
the client happy and keep them coming back every year than focusing on an accurate audit.
When Kevin finds out about “ghost-ticking” from a colleague, this is an example of bad
moral judgement. It is definitely not what ought to be done. “Ghost-ticking” could lead to not
finding fraud which could then lead to Kevin’s firm being liable for not finding the fraud.
Moral focus is about “moral action and follow through with ethical decision making.” (Mintz
and Morris, 2020, p. 79) Basically, moral focus is about how much/far are you willing to
sacrifice your personal ethics in unethical situations. Kevin obviously feels that he will lose
his job if he does not find a way to quickly cut back on the number of hours he is billing an
audit client. Although the partners do not explicitly say this nor do they explicitly tell him
how to cut back on the billable hours, he feels they are asking him to work after hours and not
be truthful about how much time the audit truly takes to complete. If I were Kevin, I would
notate the exact number of hours that I worked on each audit and let the partners know exactly
how long it was taking me.
Moral Character is about how you execute and follow through with your decision. Do you
stick with our morals and make the ethical decision despite the pressure to not account for
your hours correctly? Do you follow your colleagues advise and “ghost-ticket” audits? I
would let the partners know that I was uncomfortable with “ghost-ticking” and not being
completely honest with clients on how long audits take. I would offer a suggestion to the
partners to let the client(s) know exactly how many hours it took this year but based on
previous years hours and being a loyal customer, we are going to give a discount, so the price
of the audit is not unreasonable. I would also ask the partners to set me up with a mentor,
someone who has been doing audits for years, who may have ways of ethically shorting the
time it takes to complete an audit. I would offer these suggestions knowing they may not
agree with me and may decide that I am not a good fit for their company.
The model that is best to analyze this case is Rest’s four-component model. Rest’s four-
component model asserts that ethical actions “result from a combination of various cognitive
structures and psychological processes” (Mintz, 2020). The first step in Rest’s model requires
that an individual recognize that a moral situation exists. In the case study, Kevin must first
recognize that he is faced with an ethical decision. The second step is moral judgement, which
requires that Kevin be able to utilize prescriptive reasoning to identify the ideal solution. The
third step is moral focus, this requires Kevin to focus on taking the moral action and place
ethical values over nonethical values. The four step is moral character, this step requires
Kevin to act in accordance with ethical intentions. This is an area that many times in the
accounting sector where individuals fall short. There are many cases of individuals knowing
that there are ethical implications but allow other pressures to change their actions in
situations.
I looked at this case study as if I were Kevin and needed to wrap my head around this
discussion I just had with the partners. Kohlberg’s theory on decision making wouldn’t be my
first go-to model to use in deciphering this conundrum. His theory is based on the older we
get, the more experiences we have, the better apt we are to increase in the stages of moral
development. This is too much psychology and philosophy for me, which are not my strong
suits. It doesn’t have a laid out thought process for me to walk-through. So, for me and the
way my brain works, Kohlberg is out.
The same issue with Rest’s model, which focuses on four psychological processes of moral
sensitivity, moral judgement, moral focus, and moral character (Mintz & Morris, pg. 78). I
understand he was building on Kohlberg’s theory and streamlined it. The four processes,
broken down as recognition, reasoning, motivation, and action, give me a better basis to begin
to review my issue, but it’s not the road map I'm looking for help analyze and solve this issue
(Mintz & Morris, pg. 78). I know the way my brain works, and I need a more applicable
model to help with my issue.
Kidder’s ethical checkpoints, using the ethical decision-making model. The checkpoints are a
systematic list of items I would need to address if I were Kevin and trying to analyze the most
ethical way to solve my issue. I understand in the background my brain is in one of
Kohlberg’s stages and I am working through the four processes of Rest on some level, but for
me, I need guidance and that is what Kidder’s checkpoints gives me.
Kohlberg Method – Examining the case using this theory may have had these outcomes based
on the three stages:
Preconventional – Kevin would take part in ghost-ticking. This will avoid punishment
because there is little chance of being caught and since he feels it is a necessary part of
business, it will satisfy his needs. Conventional – He will take the work home and work off
the clock. This is due to the pressure from the bosses, and he feels loyal to the relationship.
Since falsifying documents by ghost ticking is a concern, working off the clock is the better
option. Postconventional – He would do neither the ghost ticking nor taking the work home
because he would be motivated by the rights, values, and legal contracts of society. He would
weight the alternative solutions and who would be affected by each decision.
Rest’s Four Component Module – Using this theory Kevin may have been a little confused.
Not being a CPA yet and being new to the company, he may not have all the experience and
knowledge to navigate easily through these steps:
Moral Sensitivity (recognition) – recognition of a moral issue by having empathy and
understanding others’ perspectives; showing sensitivity to the broader impacts of a decision.
Moral Judgement (reasoning) –knowledge, guidelines and codes of conduct which help form
a decision as well as the innate ‘moral compass’ for knowing the right thing. Moral Focus
(motivation) – the strength of character for wanting to do the right thing, making it a priority
amongst competing and uncomfortable alternatives, and the consistency and resiliency in the
face of external pressure. Moral Character (action) he completes, unequivocal execution of
the decision and the openness and transparency by which the repercussions are made public.
Ethical Decision-Making Module - This is the theory I think Kevin should have used to make
his decision. These are the steps:
Identify the ethical and professional issues. d Kevin would identify that he was either being led
to work hours and not bill the job/client or to ghost tick. Both are unethical actions. Identify
and evaluate alternative courses of action. Kevin would think about other way he could
resolve the issue of not completing his work in the amount of time the prior employees on this
client did. Was he not as efficient or were the prior employees making unethical decisions?
Were they other circumstances leading to a larger amount of work to be done that the boss
was not aware of? Reflect on the moral intensity of the situation and virtues that enable
ethical action to occur. If Kevin decided to ghost tick, he would have that weight on him
forever. He would not be fulfilling his duty as an accountant to serve the public interest and
be ethically responsible. He would be violating the principles of the AICPA Code of
Professional Conduct and if ever caught, could have legal action, damaged reputation to
himself as well as the firm. By taking the work home, he is not being fair to himself and the
client. If it is taking that long to complete the work, then it is fair and ethical that the client
pays for his time. Take Action. Kevin should make the decision that is ethical and find a
solution to get the work done in time if possible, or if not, plan to leave the firm. He should
also report his coworker for the unethical actions of ghost-ticking.
Kohlberg
Under this theory, an individual’s sense of ethics and morals progress / become more
complex through a series of cognitive stages as they age. We all begin at stage 1: pre-
Conventional morality in which we learn the difference between obedience and punishment.
In line with the first stage, Kevin would most likely end up taking the work home and
participating in ghost ticking to protect himself and his job. He would be acting mostly out of
self-interest. In stage 2: Conventional morality, we start seeing things through how they affect
other people in addition to ourselves. For Kevin, he would be looking at how partaking in
ghost ticking might affect his company as well as the clients if something were to go wrong,
and that “fear” of causing issues would steer him away from such actions (or at least make
him think twice). At stage 3: post-Conventional morality, we begin to see things through the
lens of “how will this affect society?” and consider universal principals such as “justice”. At
this point, Kevin would be thinking about how working after hours and ghost ticking are
considered unethical, and that it is his role, not just as a future CPA, but as a member of
society to not allow that to happen. He would not even consider doing either, and would feel
it was his duty to confront the issues regarding ghost ticking that he was told about by his
coworker. d
Rest
According to Rest’s four-component ethical decision-making model ethical acts are the
outcome of a mix of diverse cognitive structures and physiological processes that describe
how a person detects an ethical challenge. The four stages consist of: moral sensitivity, moral
judgment, moral motivation, and moral character. Following these steps would lead to Kevin
seeing how his activities would affect his work-life balance, and how falsifying information
via ghost ticking and not recording his after-hour labor may have a detrimental impact on
that. To avoid letting himself slide down the slope of unethical behavior, he must work to
prioritize his ethical beliefs and push to have a strong moral character.
Ethical Decision-Making
Under this final model, Kevin will be able to assess his problematic situation from multiple
perspectives, consider the advantages and drawbacks, and decide what his best course of
action would be. The main facets of this model are to: Identify the ethical and professional
issues (ethical sensitivity), identify, and evaluate alternative courses of action (ethical
judgement), reflect on the moral intensity of the situation and virtues that enable ethical
action to occur (ethical intent), and finally to take action (ethical behavior). This strategy is
the most straightforward, and it helps Kevin to analyze his alternatives and choose the most
ethical course of action. Kevin's apparent ethical standards are demonstrated by his criticism
of the company's morality. It is up to his moral character to have the courage to refrain from
ghost ticking since it is unethical. He should work to find alternative methods to get through
his workload and report his coworker for her unethical actions.
Bragg, S. (2022, May 24). Four-component model definition. AccountingTools. Retrieved
September 1, 2022, from https://www.accountingtools.com/articles/four-component-model
Kurt, S. (2020, August 17). Stages of moral development - Lawrence Kohlberg. Educational
Technology. Retrieved September 1, 2022, from https://educationaltechnology.net/stages-of-
moral-development-lawrence-kohlberg/
Mintz, S. M., & Miller, W. F. (2023). Chapter 2: Cognitive Processes and Ethical Decision
Making. In Ethical obligations and decision making in accounting: Text and cases. essay,
McGraw Hill LLC.
Rest's Model of Ethical Decion Making. (2021, Dec 28). Retrieved from The Urban Engine:
http://theurbanengine.com/blog//rests-model-of-ethical-decion-making
Mintz, Steven M. & Morris Roselyn E. Cognitive Processes and Ethical Decision Making in
AccountingMcgraw Hill Education (5th edition)
Mintz, Steven M. & Morris, Roselyn E. (2020) Ethical Obligations and Decision Making in
Accounting. (5th ed.) McGraw Hill.
Mintz, S., & Morris, R. (2020). Ethical obligations and decision making in accounting (5th
ed.). McGraw-Hill Education, New York, NY.
Mintz, S. and Morris, R. 2020 Ethical Obligations and Decision Making in Accounting Fifth
Edition
