Accounting scandals, ethical dilemmas and educational challenges

Ethics of Business Organizations: The Basis for Their Sustainability

“…This control mechanism is indicated by all professional groups as one that neither controls nor monitors the behaviour of individuals framed in a relationship of agency. This highly negative aspect of Portuguese corporate governance is in line with the research of Low, Davey and Hooper (2008), which highlights that ethical behaviour is fundamental in organisations, and that a good system of corporate governance and ethically sustainable business practices are the basic foundations of continuity in organisations. It also dovetails with the analyses of Adler (2002), Young (2003), Allen (2005), and Boatright (1999), who demonstrate that executives undergo training underpinned by a culture of money, and in order to be successful in the world, in its present state, do not, therefore, value a culture of ethics in business practices.…”

“…Therefore, the evaluation of management bonuses and the achievement of objectives, whether measured in objective terms-accounting-or in subjective ones-judgements-is underpinned by a number of ethical judgements. On disagreeing with the unethical behaviour of mangers, the technical professionals responded in self-defence: as the auditors, generally speaking, are responsible for the validation of the financial statements and for the economy, the efficiency and effectiveness of an organisation, they reacted in an institutional and defensive manner to safeguard their own interests given their share of responsibility in the evaluation of the performance of the managers (Merchant & Van Der Stede, 2005;Low, Davey, & Hooper, 2008). Presently, the auditors generally report to the audit committee or to the supervisory and auditing board and, in the wake of SOX (2002) and PCAOB (2006), perform an important role in the organisation of corporate governance, above all in the evaluation of the internal control system.…”

“…This has brought about the emergence of SOX (Sarbanes Oxley Act, 2002) and PCAOB (Public Company Accounting Oversight Board, 2006), which established a number of conduct rules in order to foster integrity, honesty and the morality of agents. It is taken as a given, then, that the accountants and the auditors exercise a fundamental role in the control of institutions and the good practices of corporate governance, but it is also recognised that the introduction of further rules of conduct might not function satisfactorily and, therefore, the development of a better quality education is advocated as an instrument with the potential to mitigate the effects of financial scandals (Low, Davey, & Hooper, 2008;Padia & Maroun, 2012). Further, it is stated (Dedoulis, 2006) that the conception of confidence is dynamic and an endogenous factor in the system, and, as a result, responses have to be drawn up through ethical commitments.…”

Dialogic education: reflections from an accounting course

“…Day et al (2003) suggest that as teachers and researchers accounting educators should be reflective about the students' engagement in their learning of critical accounting -as the purpose of learning critical accounting is to expose the conflicts, ideologies and complexities embedded in accounting practice. The necessity of critical accounting education becomes even more apparent considering the evolving role of accounting professionals (Parker, 2001) and recent corporate scandals (Cuganesan et al, 1997;Low et al, 2008). Thomson and Bebbington (2004) acknowledge that there is a vast difference between the context of Freire's work and those of accounting educationalists working in UK higher education.…”

“…The main idea is that human beings and the world exist in constant interaction and it is in their capacity to intervene in praxis (reflection-action) (Freire, 1998). Educational challenges, as the ones embraced in the generative themes, may equip accounting graduates with an essential skill before they enter the complex world of businesses as the number of accounting scandals and ethical dilemmas is increasing alarmingly (Howieson, 2003;Saravanamuthu, 2004;Low et al, 2008;Burch, 2008) For us, some key themes have emerged from this literature. First, we agree that the initiatives discussed in these papers (and subsequently in our own) are best described as a weak dialogical approach.…”