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JOURNAL OF EDUCATION FOR BUSINESS, 85: 16, 2010 Copyright C Heldref Publications ISSN: 0883-2323 DOI: 10.

1080/08832320903217358

Ethics Education in Accounting Curricula: Does it Inuence Recruiters Hiring Decisions of Entry-Level Accountants?
Kevin Breaux, Michael Chiasson, Shawn Mauldin, and Teresa Whitney
Nicholls State University, Thibodaux, Louisiana, USA

Recently, the National Association of State Boards of Accountancy (NASBA) has focused its attention on mandating specic ethics coursework within the 150-hr requirement for eligibility to sit for the uniform CPA examination. This push for ethics education heightened attention toward ethics in the accounting curriculum and is the basis for the present study. The primary objective of the present research study is to test the hypothesis that ethical coverage in accounting programs is an important factor in recruiting decisions for entry-level accounting positions. The research was conducted in two phases. The rst phase employed an experimental design to test whether ethical coverage in accounting programs is an important factor in recruiting decisions for entry-level accounting positions. The second phase employed a survey, allowing recruiters to self-report which criteria they value most in recruiting for entry-level accountant positions. The results from both phases suggest that ethical coverage in accounting programs in not an important factor in recruiting decisions for entry-level accounting positions. Keywords: Accounting, Curriculum, Education, Ethics, Recruiting

The lack of ethics coursework in business and accounting curricula is well documented. According to MacLean and Litzky (2003), less than 25% of the top 50 business schools require a stand-alone ethics course. In a survey that Willen (2004) conducted, only 33% of accredited business schools require an ethics course. Many schools claim to integrate ethics throughout the curriculum. However, integration probably results in a hodgepodge of topics that may bring into question the legitimacy of solid ethics coverage. The recent scandals of Enron, WorldCom, and Arthur Andersen have raised the awareness of the lack of ethics coverage in business and accounting curricula. As a result of the collapse of these organizations and the lack of denitive ethics coverage in business and accounting curricula, the National Association of State Boards of Accountancy (NASBA) responded with a movement to implement specic ethics requirements in accounting curricula. This movement resulted in a resurgence of the debate as to the value and method of delivery of ethics in accounting curricula.

Even before the Sarbanes-Oxley Act was enacted in July 2002, many accounting rms were requiring ethics training for their employees (Dipiazza, 2002). Most State Boards of Accountancy require ethics as a part of the Continuing Professional Education (CPE) requirement to maintain a CPA license. Considering the movement by NASBA, the continued interest in ethics by accounting rms, and the ethics CPE requirement, it would seem that ethics education in accounting curricula would be an important factor in recruiters hiring decisions of entry-level accountants. Also, if ethics is important, do recruiters distinguish between separate ethics courses and integration of ethics into the curriculum? In accordance, the purpose of the present article is to address these questions. The NASBAs Push for Ethics section of the present article presents a history of NASBA as it relates to its movement toward requiring specic coursework in ethics.

NASBAS PUSH FOR ETHICS The idea of professional ethics dates back to the early 19th century and has since evolved (Baker, 1999). In the early 1800s, professional ethics was the expected behavior of a gentleman. Over time, professional ethics began to take form

Correspondence should be addressed to Kevin Breaux, Nicholls State University, Accounting and Information Systems, P.O. Box 2015, Thibodaux, Louisiana 70310, USA. E-mail: Kevin.Breaux@nicholls.edu

K. BREAUX ET AL.

as codes and regulations. Every professionfrom accounting to medicinehas codes of ethics. These codes are established by professional organizations to give the public added condence. Because these codes are present, the public expects strict adherence to these rules and guidelines. It is obvious why the medical profession needs codes of ethics: the lives of practitioners patients depend on their decisions. Although the importance of professional ethics in accounting may not be as transparent, ethics in accounting is also important. Just as patients rely on doctors, the public relies on information produced and validated through the work of accountants. Accounting professionals have a specic skill set that includes knowledge of tax laws, accounting principles, and auditing standards. The general public does not possess this knowledge, and this difference creates the publics reliance on accounting information. Also, accountants have access to information, such as client les, which the general public does not. The accounting profession provides information used by investors, stock market analysts, and shareholders. The effects of unethical behavior by accountants can cause catastrophic events that extend from the corporation to its shareholders, as was seen with WorldCom, Enron, and Arthur Andersen. Therefore, it is pertinent that accountants follow the codes of ethics and other regulations established by professional accounting organizations such as the American Institute of Certied Public Accountants (AICPA). NASBA is responsible for setting policies regarding requirements for eligibility to sit for the uniform CPA examination. Recently, NASBA has focused its attention on detailing specic courses for candidates to take to satisfy the 150-hr requirement. In February 2005, NASBA issued an exposure draft on rules 51 and 52. The exposure draft contained provisions requiring candidates to complete 3 semester credit hours (SCHs) in ethical and professional responsibilities of CPAs and 3 SCHs in ethical foundations and applications in business to meet the minimum educational requirement to sit for the uniform CPA examination. The exposure draft was available for response until August 2005, and as expected, drew much attention from both opponents and proponents. NASBA (2005) stated that the change to require ethics was necessary because:
The content of the 150-hr program is critical in assuring the necessary educational preparation of applicants. The adequacy of this preparation is continually challenged by the rapid rate of change experienced in business. Due to globalization, technological innovation, and other faced-paced changes, there is a need for a broader set of transferable skills and content knowledge than in the past. (p. Rules -57)

for students, public accounting rms, taxpayers, and the State Boards of Accountancy. Although many educators agree that ethics should be emphasized in business and accounting curricula, most believe that this mandate to require specic courses and hours without any evidence to support these requirements would lead to negative consequences. NASBA appears to agree; on October 28, 2005, the NASBA Board of Directors approved the recommendation of the NASBA Education Committee to not move forward with the current form of the proposed rules. A joint panel will be developed to further review and discuss Rules 51 and 52. NASBAs decision to review the ethics requirements further underscores the importance of this research.

METHOD Research Problem and Hypothesis Due to NASBAs recent attempts to mandate specic ethics coursework in accounting curricula, the debate on the merits of requiring additional ethics education has increased. The proposed mandate to complete 3 SCHs in ethical and professional responsibilities of CPAs and 3 SCHs in ethical foundations and applications in business would have affected the requirements to sit for the uniform CPA examination and therefore the courses universities must offer. Additional ethics courses would add additional costs to accounting programs and to universities that are already facing budget problems and faculty shortages. These costs would ultimately be passed on to students. For additional ethics education to have merit, it would have to add value at some level. One level would certainly be entry into the profession. Determining whether CPA rm recruiters of entry-level accountants consider ethics coursework in their recruiting decisions is important because it provides NASBA with relevant feedback from the profession. Therefore, the purpose of the present study is to empirically investigate the effect of ethics coursework on the recruitment of entry-level accountants. Specically, the research was designed to test the following hypothesis: Hypothesis 1: Ethical coverage in accounting programs is an important factor in recruiting decisions for entry-level accounting positions. Research Instrument The present research used four different research instruments. The rst three research instruments (Appendixes A and B) listed typical criteria found in an applicant for an entry-level accounting position and asked recruiters to indicate how actively they would recruit the applicant based on the listed criteria. The criteria used to describe the applicant included age, professional appearance, eligibility to sit for the uniform

The AICPA (2005) responded by stating that the exposure draft would not achieve the desired benets and that it would create signicant and costly practical problems for colleges and universities, resulting in negative consequences

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CPA examination, good communication skills, involvement in extracurricular activities, overall GPA, accounting GPA, as well as energy, motivation and enthusiasm. These criteria were used because of their extensive use in recruitment studies that indicated their importance to the success of accounting students once they join the accounting profession (Accounting Education Change Commission, 1990; Baker & McGregor, 2000; Paseward et al., 1988; Hardin & Stocks, 1995). However, there is a lack of research on the importance of ethics education in recruitment studies. By addressing the importance of ethics coverage in curricula with respect to recruiting, the present study attempts to extend the literature on what criteria are important to recruiters of entry-level accountants. Using the aforementioned criteria, three different versions of the research instrument were developed and administered to participants in the present study. The different versions were developed to empirically test whether ethical coverage was an important factor in recruiting decisions. This manipulation addressed the preference for ethical coverage in the curriculum of the applicant. The manipulations were as follows: Research Instrument 1(RI 1 ): The students coursework contains no ethical content (Appendix A). (RI 2 ): The students coursework integrates ethics throughout the curriculum (Appendix B). (RI 3 ): The students coursework contains specic courses in ethics. In this series of research instruments, recruiters were asked to indicate how actively they would recruit the recent graduate with the listed criteria. The recruiters were asked to use a Likert-type scale ranging from 0 (not very actively) to 10 (very actively) to indicate how actively their rm would recruit the hypothetical applicant. RI 4 used the same criteria as RI 13 , but simply listed the criteria believed to be useful in recruiting decisions. Each recruiter was asked to rank the characteristics in order of importance using a Likert-type scale ranging from 1 (most important criterion) to 9 (least important criterion). The instrument also asked recruiters to list other criteria that they consider when interviewing a candidate for an entry-level accounting position. Each of the four research instruments also contained a section on rm demographics. The rm demographic questions asked participants to indicate the number of CPAs employed by the rm and to classify the rm as local, regional, or national. Sample Selection To test the hypothesis, the research instruments were mailed to CPA rm recruiters in a four-state area including Alabama, Louisiana, Mississippi, and Texas. The contact information was taken from the Web sites of the State Boards of

Accountancy for the states. When individual contact information was available, the research instrument was addressed to an individual CPA at the rm. When individual contact information was not available, the research instrument was addressed to the recruiter of a listed rm. There was no duplication in the CPA rms receiving the instruments unless the CPA rm had multiple locations in one state. The experiment allowed instruments to be sent to different locations of a single CPA rm in one state or multistate region. A total of 400 research instruments were mailed, with 100 of each instrument being evenly distributed over the four-state region. The data collected from the rst three research instruments allowed the hypothesis to be tested. The nature of the research dictated a two-phase study. The rst phase determined if ethics coursework affects recruiting decisions. The second phase used the data collected from the fourth instrument to determine whether recruiters would self-report that ethics coursework affects their recruiting decisions. Phase One The rst phase of the study used an experimental behavioral design to test the hypothesis. RI 1, 2, 3 were sent to 100 participants, respectively. The instrument responses were analyzed to determine if ethics in accounting programs is an important factor to accounting recruiters in their hiring decisions for an entry-level accounting position. When recruiters were found to value ethics coursework, further analysis was performed to ascertain if a certain delivery method for ethics coursework is preferred-integrated ethics or specic ethics coursework. The data were further analyzed on the differences or similarities in responses based on rm size. Phase Two The second phase of the research study determined whether recruiters self-report that ethics is an important criterion in making recruiting decisions. RI 4 was mailed to 100 participants. The responses were analyzed to determine which criteria recruiters value the most. These results were used in conjunction with the results from the experimental behavioral design used in the rst phase of the study, to determine whether ethics coursework is important to recruiters. DATA ANALYSIS Phase One Phase one tested the hypothesis that ethical coverage in accounting programs is an important factor in recruiting decisions for entry-level accounting positions. To test the hypothesis, analysis of variance (ANOVA) was used because of its appropriateness in situations in which the independent variable (ethics manipulation) is set at a certain level and the dependent variable (ranking) is obtained at each of these levels (Parasuraman et al., 2004).

K. BREAUX ET AL. TABLE 1 Analysis of Variance Results, Phase 1: Ethics Manipulation Criteria TABLE 3 Analysis of Mean Ranking, Phase 2 Mean Ranking 2.6 2.9 3.2 3.8 4.1 6.4 6.5 7.4 8.1

Source Ethics

F Value 2.452

Prob > F 0.091 Communication skills GPA (Accounting) Energy, motivation, enthusiasm GPA (Overall) Professional appearance Extracurricular activities Uniform CPA Examination eligibility Ethics coverage in curriculum Age

Of the 300 research instruments sent, 98 usable instruments were returned for a response rate of 32.7%. In each of these research instruments, participants indicated how actively their rm would recruit the student with the given characteristics. This level of recruitment was indicated on a Likert-type scale ranging from and was used as the dependent variable in the ANOVA model. The independent variable in the ANOVA model was the ethics manipulation. The results of the ANOVA illustrated in Table 1 indicate that there is no difference among the means of the ethics manipulation (F = 2.452, p = .091). These results do not lend support to the hypothesis because no difference exists among the means of the manipulations (contains no ethical content, integrates ethics throughout curriculum, contains specic courses in ethics). Therefore, the ANOVA results suggest that ethical coverage in accounting programs is not an important factor in recruiting decisions for entry-level accounting positions. An additional ANOVA test was used to determine whether Ethics Manipulation Firm Size explained the variance in the level of recruitment. Firm size was self-reported by the respondents on the research instrument. Each respondent indicated the number of CPAs employed by his or her rm, and this number was used as a proxy for rm size. The level of recruitment, presented as a slash on a Likert-type scale ranging from, was used as the dependent variable in the ANOVA model, and the rm size was used as the independent variable. The results of the ANOVA illustrated in Table 2 indicate that there is no difference among the means of the ethics manipulation with respect to rm size (F = 1.337, p = .156). Therefore, rm size does not affect the preference for ethics coursework in recruiting decisions. Phase Two Phase two was designed to ascertain which criteria recruiters self-report as important. Phase two used RI 4 , which asked recruiters to rank nine criteria for entry-level accounting applicants by importance. Of the 100 research instruments sent,
TABLE 2 Analysis of Variance Results, Phase 1: Ethics Manipulation and Firm Size Interaction Source Ethics Size F Value 1.337 Prob > F 0.156

19 usable instruments were returned for a response rate of 19%. Each recruiter ranked the most important criterion as 1 while the least important criterion was ranked as 9. To analyze these data, the mean ranking was computed for each criterion. The mean ranking for all categories was calculated and are shown in Table 3. The criteria are presented in order of importance based on the means as reported by survey respondents. As evidenced by the mean ranking, ethics coverage in curriculum ranks low in importance in recruiting decisions. Ethics coverage only ranked in the top 5 criteria in 15.8% of the useable surveys. Thus, recruiters self report that ethics coverage is not important in recruiting decisions. With ethics having a mean ranking of 7.4, only age was indicated as being less important than ethics coverage when recruiting for entry-level accounting positions. The results of phase two lend additional support to the ndings of phase one that ethics coursework is not an important criterion in recruiting for entry-level accounting positions. RI 4 also asked recruiters to list additional criteria that were important in recruiting decisions. These criteria indicate other characteristics that recruiters value as important and may be useful in future research studies. Table 4 shows the additional criteria frequently listed by recruiters. CONCLUSION If recruiters do not value ethics coursework as this study suggests, should colleges and universities offer these courses? Phase one indicated that recruiters do not value ethics in the accounting curriculum when recruiting for entry-level accounting positions. Phase two lends support to the results
TABLE 4 Additional Criteria, Phase 2 Prior work experience Career objectives Professional poise Character and integrity Computer skills

ETHICS EDUCATION IN ACCOUNTING CURRICULA

of phase one and indicated additional criteria which recruiters consider important. Therefore, NASBAs push for ethics coursework should be evaluated to determine which delivery method of ethics coursework would be most benecial to students, colleges, and the profession as a whole. If specic courses in ethics would not make students more desirable to recruiters, the model used by many schools of integrating ethics in the accounting programs should sufce for ethics education for entry-level accountants. The present research study does not suggest that ethics is not important but rather provides guidance to NASBA as the organization pushes for ethics coursework in accounting curricula. Although ethics is important to the profession, it may be to the students and professions benet to educate accountants on ethics through CPE courses and internal rm ethics training. More research should be performed to examine whether the profession values on-the-job ethics training more than ethics coursework in college curricula.

REFERENCES
AICPA. (2005). Accounting Education Change Commission. 1990. Objectives of Education for Accountants: Position Statement Number

One. Issues in Accounting Education (Fall): pamphlet. Retrieved July 22, 2008, from http://www.nasba.org/nasbaweb/NASBAWeb.nsf/PS/955 11CC8CE69334A862571B900755B3F/$le/AICPA%20Framework.pdf Baker, R. (1999). Codes of ethics: Some history. Perspectives on the Professions. Retrieved July 22, 2008, from http://www.iit.edu/ departments/csep/perspective/pers19 1fall99 2.html Baker, W. M., & McGregor, C. C. (2000). Empirically assessing the importance of characteristics of accounting students. Journal of Education for Business, 75, 149157. Dipiazza, S. A. (2002). Ethics in Action. Executive Excellence, 19, 1516. Hardin, J. R., & Stocks, M. H. (1995). The effect of AACSB Accreditation on the recruitment of entry-level accountants. Issue in Accounting Education, 10, 8395. NASBA. (2005). Retrieved July 22, 2008, from http://www.nasba.org/ nasbaweb/NASBAWeb.nsf/PS/264D55C613B9747D862571B900755C7 F?OpenDocument MacLean, T., & Litzky, B. (2003). Task force report on integrating ethics and business in society in the U.S. management curriculum. Retrieved July 22, 2008, from http://www.cba.kstate.edu/department/ethics/docs/TaskForceSummaryJune03.pdf Paseward, W. R., Strawser, J. R., & Wilkerson, J. E., Jr. (1988). Empirical evidence on the association between characteristics of graduating accounting students and recruiting decisions of accounting employers. Issues in Accounting Education, 3, 388401. Parasuraman, A., Grewal, D., & Krishnan, R. (2004). Marketing research. Boston: Houghton Mifin Company. Willen, L. (2004). Kellogg denies guilt as B-schools evade alumni lapses. Bloomberg Press Wire. Retrieved July 22, 2008, from www.cba.kstate.edu/departments/ethics/docs/bloombergpress.htm

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APPENDIX ARECRUITER SURVEY Assume that your rm is recruiting an entry-level accountant. During the interview process, you meet a student from an AACSB accredited accounting program who has the following criteria: The student is 23 years old. The student has a professional appearance. The student is eligible to sit for the CPA examination. The student demonstrates good communication skills. The students coursework contains no ethical content. The student is involved in several extracurricular activities. The students overall GPA is a 3.4 on a 4.0 scale. The student has a GPA of 3.6 in accounting courses. The student is energetic, motivated and enthusiastic.

How actively would your rm recruit the above student? Please indicate your answer by placing a slash on the line below. 012345678910 Not Very Actively Very Actively

Firm Demographics How many CPAs does your rm employ? Would you classify your rm as local, regional or national? APPENDIX BRECRUITER SURVEY Assume that your rm is recruiting an entry-level accountant. During the interview process, you meet a student from an AACSB accredited accounting program who has the following criteria: The student is 23 years old. The student has a professional appearance. The student is eligible to sit for the CPA examination. The student demonstrates good communication skills. The students coursework integrates ethics throughout the curriculum. The student is involved in several extracurricular activities. The students overall GPA is a 3.4 on a 4.0 scale. The student has a GPA of 3.6 in accounting courses. The student is energetic, motivated and enthusiastic.

How actively would your rm recruit the above student? Please indicate your answer by placing a slash on the line below. 012345678910 Not Very Actively Very Actively

Firm Demographics How many CPAs does your rm employ? Would you classify your rm as local, regional or national?