ACG 6835 PROFESSIONALISM AND ETHICS IN ACCOUNTING AND AUDITING
TENTATIVE READING LIST
*Please note that the readings may change and additional readings will be assigned as the semester progresses.
Week 1: January 7
Course Overview and Introduction to Ethical Reasoning
- Rashbaum, W.K. and D.B. Henriques, (March 19, 2009) Accountant for Madoff Is Arrested and Charged With Securities Fraud ("The accountant, working out of a tiny storefront office, provided auditing services to Bernard L. Madoff's investment firm for more than a decade.")
Week 2: January 14
Introduction to Ethics and Professionalism
Ethics and Professionalism - Week 3 Notes.ppt (339.00 kb)
- Kultgen, J. 1988. Chapter 1
- Kultgen, J. 1988. Chapter 2
- Kultgen, J. 1988. Chapter 3
- Fink, S. 2009. Strained by Katrina: A Hospital Faced Deadly Choices. New York Times (August 30): http://www.nytimes.com/2009/08/30/magazine/30doctors.html
- Villegas, A. 2010. Doctor shortage fuels nurses' push for expanded role. NPR.org (March 7) http://www.npr.org/templates/story/story.php?storyId=123967655
Discuss current ethical and professional issues. Each student should be prepared to identify current issues they are interested in discussing.
Week 3: January 21
An Elaboration on Ethical Reasoning
- Sutton, S.G., V. Arnold, and T.D. Arnold. 1995. Toward an Understanding of the Philosophical Foundations for Ethical Development of Audit Expert Systems. Research on Accounting Ethics, Vol. 1: 63-74.
- Arnold, T.D., V. Arnold, and S.G. Sutton. "Toward a Philosophical Foundation For Ethical Development of Audit Expert Systems: A Contractarian Approach." Research on Accounting Ethics, Volume 3, 1997, pp. 211-232.
- Sutton, S.G., T.D. Arnold, and V. Arnold. "Teleological Foundations for the Ethical Development of Expert Systems: A Note on Act vs. Rule-Based Reasoning." Accounting Forum, Vol. 21, No. 3-4, 1998, pp. 463-474.
- Reich, R. B. 2010. Op-Ed Contributor: How to End the Great Recession. New York Times (September 3)
- Buffett, W.E. 2011 Op-Ed Contributor: Stop Coddling the Super Rich. New York Times (August 11)
What method of reasoning fits your ethic the best (reflect on Katrina hospital example)? How does this fit Kultgen’s view (reflect on Chapter 2)?
Week 4: January 28
Is the Auditing Profession Fulfilling its Responsibility? A Debate over SOX.
- DeFond, M.L. and J.R. Francis. 2005. “Audit Research after Sarbanes-Oxley”, Auditing: A Journal of Practice and Theory, Supplement: 5-20.
- Canada, J., J.R. Kuhn, and S.G. Sutton. 2008. “Accidentally in the Public Interest: The Perfect Storm that Yielded the Sarbanes-Oxley Act”, Critical Perspectives on Accounting 19(7): 987-1003.
- "Spitzer Calls Accountants 'Facilitators' for Corporate Abuse," by Michael Cohn, Accounting Today, February 8, 2011 --- Click Here
- Lord & Benoit Report: Fraud in U.S. Non-Accelerated Filer Companies
- Johnson, S. Fraud Case Casts Doubt over Sarbox Exemption CFO.com (February 1, 2010)
- Has Sarbanes-Oxley Failed? New York Times. (July 24, 2012): http://www.nytimes.com/roomfordebate/2012/07/24/has-sarbanes-oxley-failed (PLEASE READ ALL FOUR OPINIONS).
Is auditing fulfilling its purpose?
Week 5: February 4 *ETHICS CASES DUE FRIDAY, FEBRUARY 14*
Understanding the Nature of Professions & the Marketplace for Accounting Services
Ethics and Professionalism - Week 5 Notes.ppt (355.50 kb)
Model of Professions.docx (49.33 kb)
- Kultgen, J. 1988. Chapter 4
- Kultgen, J. 1988. Chapter 5
- Op-Ed Columnist: What Life Asks of Us By David Brooks
- Magill, H.T., G.J. Previts, and T.R. Robinson. 1998. Chapter 7, “The Economics and Business of CPA Practice,” The CPA Profession: Opportunities, Responsibilities, and Services. Pages. 127-148.
- R. Brass, 2004, "Is image letting accountants down?" ACCA (December 15)
- Wyatt, A.R. 2004. Accounting Professionalism--They Just Don't Get It! Accounting Horizons 18(1): 45-53
What is the current image of the CPAs? What is the current scope of CPA services?
Week 6: February 11
Evaluating Professionalism in Accounting
Ethics and Professionalism - Week 7 Notes.ppt (325.00 kb)
- Kultgen, J. 1988. Chapter 6.
- Kultgen, J. 1988. Chapter 7.
- Lee, T. 1995. The professionalization of accountancy: A history of protecting the public interest in a self-interested way. Accounting, auditing & Accountability Journal 8 (4): 48-69.
- Cullinan, C. and S.G. Sutton. 2002. Defrauding the Public Interest: A Critical Examination of Reengineered Audit Processes and the Likelihood of Detecting Fraud. Critical Perspectives on Accounting, 13: 297-310.
- Brown, K. 2002. Heard on the Street: It's Hard to Catch Exec Fraud, Wall Street Journal (July 8).
What is the state of professionalism in the accounting profession?
Week 7: February 18
Is a code of ethics necessary?
Ethics and Professionalism - Week 8 Notes.ppt (167.50 kb)
- 1. Kultgen, J. 1988. Chapter 10.
- Rogers, R.K., J. Dillard, and K. Yuthas. 2005. The accounting profession: Substantive change and/or image management. Journal of Business Ethics 58: 159-176.
- Arnold, P. and Cooper, C. 1999. A tale of two classes: The privatisation of Medway ports. Critical Perspectives on Accounting 10, 127-152. (Electronic)
- T. Whitehouse, "PCAOB Fires Shot on Audit Issues, Calls for Enforcement," Compliance Week, Sept. 30, 2010
- A New PCAOB Shot at Auditor Professionalism or Lack Thereof (don't get hung up on the heavy detail, scan this one).
- J. Brunsden "EU Seeks to Split Big Four Auditing Firms in Rule Overhaul," Bloomberg BusinessWeek, December 5, 2011.
Note: Don’t get bogged down in theory and jargon of the Arnold and Cooper article. Focus on the issue of privatization and the role of accounting firms in the privatization movement. Make sure you can chronicle what the authors report happened in the Medway Port case.
Do contemporary codes of ethics serve a purpose?
Week 8: February 25
The Cheating Culture
- Callahan, D. 2004. Chapters 1-6
- Frank, R.H., 2010. "Economic View: Income Inequality: Too Big to Ignore", New York Times, (October 17).
- Porter, E., 2010. “How Superstars’ Pay Stifles Everyone Else” New York Times, (December 25).
- Blow, C.M. 2011. "America's Exploding Pipe Dream" New York Times, (February 19).
How does the current society, as described by Callahan, affect professions?
Week 9: March 4
Spring Break - no class
Week 10: March 11
Enron: The Smartest Guys in the Room
- Read the book or watch the movie and identify as many ethical issues as possible. Be prepared to discuss those issues.
- Callahan, D. 2004. Chapters 7-9
- Young, J. 2005. Changing our Questions: Reflections on the Corporate Scandals. Accounting and Public Interest 5: 1-13.
- Meyerson, H. 2010. "When Tea Party wants to go back, where is it to?" Washington Post (October 27, p. A23).
- Smith, G. 2012 "Why I am Leaving Goldman Sachs." New York Times (March, 14).
- "The Big Four Accounting Firms: Shape Shifters." The Economist (October, 17, 2012).
What characteristics of Callahan’s “Cheating Culture” were represented in the culture and people of Enron?
Week 11: March 18
Blind Spots: Why We Fail to Do What's Right and What to Do about It
- Bazerman, M.H. and A.E. Tenbrunsel. 2011. Chapters 1-4
- Moore, D.A., Tetlock, P.E., Tanlu, L., & Bazerman, M.H. Conflicts of Interest and the Case of Auditor Independence: Moral Seduction and Strategic Issue Cycling. Academy of Management Review, 2006 31(1), 1-20.
Is asserting one’s professionalism enough to reduce the perceived conflict of interest in the auditing profession? Can auditors overcome biases which are inherent in human behavior?
Week 12: March 25
Blind Spots: Why We Fail to Do What's Right and What to Do about It
- Bazerman, M.H. and A.E. Tenbrunsel. 2011. Chapters 5-8
- Nelson, M. W. 2006. Ameliorating conflicts of interest in auditing: Effects of recent reforms on auditors and their clients. Academy of Management Review, 31: 30–42.
- Bazerman, M.H., Moore, D.A., Tetlock, P.E., & Tanlu, L. Reports of solving the conflicts of interest in auditing are highly exaggerated. Academy of Management Review, 2006, 31(1), 1-7.
If conflicts of interest exist in the auditing profession, then how can they be overcome?
Week 13: April 1 *EXAM RELEASE DAY – DUE ON SUNDAY, APRIL 13 (11:55 P.M.)*
Inside Job - Accountants and the "New" Economy
- Watch the film Inside Job (2010)
- Rapaport, M. "Role of Auditors in Crises Get Look." The Wall Street Journal (December, 23).
- Christensen, B.E., S.M. Glover, and D.A. Wood. "Extreme Estimation Uncertainty in Fair Value Estimates: Implications for Audit Assurance." Auditing: A Journal of Practice & Theory. 31.1 (2012): 127-46.
- Brown, N. "Ernst & Young to pay $99 million to end Lehman investor lawsuit." Reuters (October 18, 2013).
- McKenna, F. "$99 Million Buys EY Ticket Out Of Private Lehman Litigation, Finally." re: The Auditors (October, 21, 2013).
What role, if any, did accounting play the 2008 meltdown of the financial markets?
Week 14: April 8
No class in lieu of take home exam
Week 15: April 15
Research Paper Forum
Instructor will be available from 6:00 pm until no longer needed (or 8:50 pm - whichever is earlier) to discuss group term papers and presentations.
Week 16: April 22 *TERM PAPERS DUE SUNDAY, APRIL 27 (11:55 P.M.)*
Can ethics be taught?
- Bampton, R. and P. Maclagan. 2005. Why teach ethics to accounting students? A response to the sceptics. Business Ethics: A European Review 14(3): 290-300.
- Ponemon, L.A. 1993. Can Ethics Be Taught in Accounting? Journal of Accounting Education 11: 185-209.
- Copeland, J.E., Jr. 2005. Ethics as an Imperative. Accounting Horizons 19(1): 35-43.
Can auditors without a strong moral code be taught to behave more ethically?
Final Exam Week
Term Paper Presentations
Last Updated: Tuesday, January 07, 2014.