Ethics in accounting and ethical education have been the focus of increasing interest in the last decade. However, some important shortcomings persist. Generally, rules, principles, values and virtues are presented in a fragmented fashion, and
only a few authors consider the role of the accountant's character in presenting relevant and truthful information in financial reporting, and the importance of practical reasoning in accounting.
In his article "Ethical Education in Accounting: Integrating Rules, Values and Virtues," Professor Domènec Melé of IESE Business School considers that, after the recent accounting scandals, it seems absolutely essential to pay increasing attention to ethics in accounting and to improve ethical education for accountants. Moreover, in contrast with the relevant current trends in accounting ethics and ethical education in accounting, Melé presents an approach in which rules, values and virtues are interconnected.
Accountants can perform their work in many different areas, including auditing, managerial accounting, tax accounting, financial planning, consulting and, of course, simply preparing accounts. In each of these spheres, ethical issues appear and accountants perceive that opportunities exist in their work to engage in unethical behavior.
To assist them codes of conduct give guidelines for proper behavior in the profession. These codes contain a set of principles and rules specifying what the society expects to be considered in decision making. In practice however, the rules are often applied in a mechanical way. Moreover, in today's legalistic society, the question of "What is the right thing to do?" is often confused with "What is legal?". Therefore, ethics in accounting cannot be reduced to simply what codes of conduct state. Accountants have to make practical judgments about concrete situations and, above all, have to behave correctly. Both conditions require not only knowing rules and bearing values in mind, but also having a good character. Values (created in the mind) correspond with human virtues (part of one's character), that is to say, virtues of the person as an individual. The author understands values as "intrinsic moral values" or "moral goods", which are rooted in human nature. On this basis he states that rules, values and virtues are interrelated.
Because character has an influence on practical reasoning, the author believes that the main goal for ethical education in accounting - and, of course, in any other professional field - should be to impact on the ethical behavior of those receiving this education and not only to provide a set of theories and tools to solve ethical dilemmas.
Ethical behavior primarily depends on: moral sensitivity (how the subject comprehends the ethical dimension of a situation); moral judgment (the capacity to judge which alternatives are ethically acceptable and which are not and to determine the uprightness of the intention); moral motivation (willingness to take the moral course of action, placing moral values above other values and taking personal responsibility for moral outcomes); and moral virtues (permanent attitudes and interior strength for moral behavior).
Consequently, ethical education in accounting has to be oriented towards motivating moral behavior and acquiring virtues. However, virtues are not a matter of knowledge, but of personal moral development. What ethical education can do is show virtues, exhort and motivate the student to acquire them, and explain how to do so. This includes the presentation and discussion of rules (generally from codes of conduct), principles and values that are necessary for acquiring virtues.
From a practical perspective, Melé's proposal requires, first of all, changing the status quo of teaching that exclusively presents rules and enlightened ethical theories. The comprehensive ethical approach interrelating rules, values, and virtues, imposed for case studies, for example, include not only dilemmas but also descriptions of specific people involved in a particular situation, significant facts of their life, traits of their character, as well as other relevant information concerning factors with an influence on moral behavior.