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A wave of discussion involving ethics and accounting education has recently taken place. However, before accounting educators can design curricula with the most positive impact on the moral development of accounting students, educators need to have an idea of where their students stand on a variety of ethical issues. For example, there is an absence of information describing the ethical reasoning of accounting students as it relates to academic dishonesty. Knowing how accounting students feel about academic dishonesty is important. Sierles et al.(1980) found there was a continuum from cheating in college, to cheating in medical school in didactic areas, to cheating in clerkships in patient care. Thus, cheating in school may be an early warning of a propensity to engage in unethical practices during one's professional career. This study provides descriptive information concerning accounting students and academic dishonesty. First, students' perceptions of questionable academic activities are presented. Next, detail about the ‘cheating’ environment at several large public institutions and information concerning the perceived effectiveness of methods commonly used to deter cheating on examinations is presented. Lastly, a logistic regression model provides further insights into factors which may influence students' propensity to cheat.academic dishonesty, cheating, judgment, ethics,

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INTRODUCTIONWhether audit qualifications have informational value to investors is a question that remains unresolved.' Empirical studies of this question yield mixed results (Craswell, 1985). Some studies conclude that qualified opinions contain information (Firth, 1978;Ball, Walker and Whittred, 1979;Chow and Rice, 1982;Dopuch, Holthausen and Leftwich, 1986;and Fields and Wilkins, 1991). Others conclude that the market impounds information about the economic condition or conditions that cause the qualification prior to public announcement of the qualification (Elliott, 1982;and Dodd, Dopuch, Holthausen and Leftwich, 1984). The failure of some studies to find information content for audit qualifications may be due to the fact that the firms in these studies were very large and traded on national stock exchanges (Strawser, 1991).The fact that empirical evidence on the information content of qualified audit opinions for American firms is limited to the New York Stock Exchange (NYSE) and American Stock Exchange (ASE) is problematic if one attends to an important theoretical possibility. The value of any particular piece of information can be reasonably argued to be a decreasing function of the number of alternative pieces of information available. That is, a reasonable initial assumption is that the more information sources available to investors the less salient any particular source becomes for users of information. This leads to the inference that valuations of large firms -firms that are, for example, traded on the NYSE or ASE -are less influenced by audit qualifications than smaller firms. This would be due to the fact that valuation decisions for large firms, as opposed to small firms, are functions of the larger set of available information about the firm. Thus the audit qualification -like any other single piece of information -is less salient to investors armed with an array of information about the firm. In this way, tests of the information content of audit qualifica-997 998 AMEEN, CHAN AND GUFFEY tions for large firms may be at best only weak tests of the information content of audit qualifications (Dodd et al., 1984).This study is designed to test for the information content of audit qualifications for smaller firms. T o conduct that test, we have taken our sample from firms listed on the over-the-counter (OTC) exchange. With this exception, our study is methodologically quite similar to studies examining NYSE and ASE firms.We find that the market 'learns' of the underlying cause(s) of the qualification and reacts negatively before the first observable public announcement. No significantly negative response is associated with the announcement of the qualification. However, when the sign of the abnormal performance is ignored (i.e., when no attempt is made to determine whether the qualification is 'good news' or 'bad news'), the results indicate a statistically significant market reaction.The remainder of this paper proceeds as follows. First, the motivation for examining O T C firms is presented. Next, ...