Moral reasoning of finance and accounting professionals: An ethical and cognitive moral development examination

Corporate America is at the crossroad where ethical and unethical behaviors intersect. After decades of an eroding of regulations to prevent corporate and personal self-serving behavior, the Sarbanes-Oxley Act of 2002 was legislated. However, will prosecution act as a deterrent to prevent further illegal acts and unethical behavior? Empirical research must continue to understand the antecedents of ethical behavior in order to prevent further corruption in the workplace.; Cognitive Moral Development theory states that cognitive ethical reasoning becomes more complex as one matures and gains cognitive processes. This theory assumes anyone with lower-order ethical reasoning is not able to process higher-order ethical reasoning. The theory is another indication that high ethical standards exhibited today do not guarantee the same standards tomorrow. Continuous education and training in what a company or profession considers high ethical standards are necessary to maintain and reinforce moral behavior. Such education and training emerge as even more important as the employee or member of the profession matures, so that his or her values are in alignment with the core ethical values of the company or the profession.; Lawrence Kohlberg developed a system to represent logical ethical reasoning with a model of six stages. James Rest extended the work of Kohlberg by developing a valid, reliable instrument to quantitatively measure logical ethical reasoning. This instrument is called Rest's Defining Issues Test (DIT). Using five ethical dilemmas that Rest created, the DIT determines how people use different processes when resolving a moral situation. Each survey participant rates the five moral dilemmas on a five-point-Likert-type scale. The person that makes moral decisions based on reasoning from ethical principles is at Kohlberg's highest stage, as determined by the DIT. Further, Rest developed a four-component model to describe the process most employees use when making ethical decisions. Rest's four-component process involves: moral sensitivity, identifying the correct course of moral action, determining what action to take when presented with an ethical dilemma, and the execution of the moral plan. Rest believed that moral failure could occur if a person lacked any of the four components.; Kohlberg's and Rest's models are combined with a demographic survey to test the variables of education level, age, gender, and ethical training. Research has proven these variables have an impact on ethical decision-making when surveying a student population. However, these variables have not yet been applied to finance and accounting professionals.; This research finds that the N2 score for the over 35 age group is significant: Subjects older than 35 years had a higher N2 score (m = 25.66, sd = 5.66) than subjects 35 years old or younger (m = 21.39, sd = 7.12). Although the variable for age was not significant, females scored higher for finance, and males scored higher for accounting.; The relationship between the moral maturity level of finance and accounting professionals and the variable ethics courses and/or ethics training of finance professionals compared to accounting professionals was not supported through this analysis. The results are similar when the moral maturity level of finance and accounting professionals were surveyed on gender, age, and education.