A Test of the Selection-Socialization Theory in Moral Reasoning of CPAs in Industry Practice

Abstract

This paper investigates the Selection-Socialization Theory (SST) and its related Inverted-U Phenomenon (IUP) in the moral reasoning of Certified Public Accountants (CPAs) in industry and public practice. This is an extension of the literature that has primarily focused on CPAs in public practice and has reported mixed results. We do not find significant differences in moral reasoning (as measured by the P-score of the Defining Issues Test) between various professional ranks of practicing accountants. This result suggests an absence of SST or IUP in promotions of CPAs to higher ranks in industry or public practice. Investigation of control variables indicates that gender and ethical training do not have significant effects on the P-score. However, as expected, CPAs with graduate degrees have higher P-scores than those with only an undergraduate degree, and politically moderate or liberal CPAs score higher than conservatives.

Accountants’ cognitive styles and ethical reasoning: A comparison across 15years

“…Ponemon (1992) provided early evidence of a selection-socialization in which disproportionately more accountants with low levels of P-scores were promoted to higher professional ranks in accounting firms than those with higher P-scores. However, more recent, and larger scale, studies have not found selection-socialization to be a factor in promotion in public practice (Bernardi & Arnold, 1997;Scofield et al, 2004) or industry practice (Abdolmohammadi & Ariail, 2009). Our finding of SF/ST dominance in 2005 that is also associated with lower P-score than NF/NTs raises the question again as to whether or not a conscious (or unconscious) selection takes place that might explain why these individuals are attracted to the accounting profession.…”

“…In his explanation of this issue, Ponemon (1992) suggests that high-ranking accountants may be attracting or retaining people similar to themselves in a selection socialization mechanism, thus promoting individuals with a lower level of ethical reasoning than found in the overall population of lower rank accountants. More recent and larger scale studies find no evidence in support of this bias in promotion to higher ranks for CPAs in public practice (Bernardi & Arnold, 2004;Scofield, Phillips, & Bailey, 2004) or industry practice (Abdolmohammadi & Ariail, 2009).…”

Investigating Socialization, Work-Related Norms, and the Ethical Perceptions of Marketing Practitioners

“…More recently, studies have shown no evidence of selection-socialization among, for example, professional accountants (Abdolmohammadi and Ariail, 2009). …”

The effects of length of service and ethical ideologies on moral development and behavioral intentions

“…Our findings suggest that there could be socialization at play within the Brazilian tax authorities and that the tax auditors regress in their ethical decision making abilities as their tenure increases. Length of service affects auditors working for the public administration in Brazil in a similar fashion, it affects accountants and auditors working for the private sector in other contexts (e.g., Abdolmohammadi and Ariail 2009). These results challenge studies on public administration that suggest that length of service positively influences public sector servants' moral development (Stensöta, 2010).…”