Giving Voice to Values in Accounting

Tara Shawver, William Miller

• Publisher: Routledge
• Year: 2018
• ISBN:
  9781351107471
• Edition: 1
• Topic: Business
• Subtopic: Business General
• Index: Business

There has been much written on the importance of responsibility accounting and integrated reporting to ensure business accountability, but not on how to be a responsible accountant. As the accounting profession is built on the foundation of maintaining public trust, making the right decisions when faced with a challenging dilemma has a major impact on the long-term performance and perception of the firm as well as personal credibility. Accountants make judgement calls on a regular basis: they are privy to highly confidential information regarding their clients and their clients' businesses. Unethical earnings management practices can easily lead to falsifying records, but how does the accounting professional avoid succumbing to these practices when faced with other pressures?

Giving Voice to Values in Accounting is the first book to explain the ethical dilemmas faced by accountants in their day-to-day work and to provide clear guidance for accounting students and professionals in navigating through these issues. The Giving Voice to Values (GVV) framework focuses on resolving ethical conflict by encouraging individuals to act on their values. This book provides accounting educators, coaches, trainers and professionals with both the impetus and the tools to easily implement the GVV offering into their own work, their organizations and in the classroom.

1

Review of the existing literature related to GVV in accounting

Tara J. Shawver and William F. Miller

Giving Voice to Values curriculum

The main idea behind Giving Voice to Values (GVV) is that awareness of ethical issues and knowing what is right may not result in ethical action since little time is spent learning the skills to respond to ethical conflict effectively. The GVV program is based on the premise that through practice with voicing their values, a person will build the confidence and the “moral muscle” needed to consistently speak up when an ethical problem is encountered. This premise is built on 12 foundational assumptions (Gentile 2010, 224):

• I want to voice and act upon my values.

• I have voiced my values at some points in the past.

• I can voice my values more often and more effectively.

• It is easier for me to voice my values in some contexts than others.

• I am more likely to voice my values if I have practiced how to respond to frequently encountered conflicts.

• My example is powerful.

• Although mastering and delivering responses to frequently heard rationalizations can empower others who share my views to act, I cannot assume I know who those folks will be.

• The better I know myself, the more I can prepare to play to my strengths and, when necessary, protect myself from my weaknesses.

• I am not alone.

• Although I may not always succeed, voicing and acting on my values is worth doing.

• Voicing my values leads to better decisions.

• The more I believe it’s possible to voice and act on my values, the more likely I will do so.

Gentile incorporated these foundational assumptions into the provided curricular framework within seven topical areas: (1) Values – individuals appeal to the short list of widely shared values of honesty, respect, responsibility, fairness and compassion; (2) Choice – individuals have the ability to choose to voice their values; (3) Normality – individuals should approach values conflicts calmly and competently; (4) Purpose – individuals should define their personal and professional purpose; (5) Self-Knowledge, Self-Image and Alignment – individuals should voice their values in a way that is consistent with who they are; (6) Voice – is developed over time; and (7) Reasons and Rationalizations – individuals should anticipate common reasons given for unethical behaviors and identify counterarguments (Gentile 2010, 245).

Faculty are provided materials that cover each of the above areas including assigned readings, individual and group exercises, individual and group case analysis and recommended in-class discussion. Each faculty member has the flexibility to integrate the materials into any class. The coverage of these assumptions begins to prepare students to first recognize the type of ethical dilemma they are dealing with and the common reasons and rationalizations individuals encounter when they face unethical business practices. Rushworth Kidder (2005, 89) suggests that most ethical dilemmas fall into at least one of these four categories or patterns:

• “Truth versus loyalty”

• “Individual versus community”

• “Short term versus long term”

• “Justice versus mercy”

These categories reflect common values conflicts which exist in most ethically challenging situations. Another way to refer to these conflicts is as a tension between them (a push and pull between competing values). These types of conflicts are often time the result of how a problem is framed as if no option exists where both values can co-exist in harmony. Stepping back and thinking of the problem on a broader scale, rather than narrowly defining it often helps in determining how best to approach a discussion about the issue. Along those same lines, understanding the type of issue helps us anticipate what reasons and rationalizations we will probably hear when we raise the issue:

• Expected or standard practice

• Materiality

• Locus of responsibility

• Locus of loyalty

Once individuals recognize the type of issue and these common reasons and rationalizations, they can begin to create counterarguments that voice their values to encourage ethical action. The materials include a set of tools that Gentile (2010) refers to as levers that students practice using to create powerful and persuasive responses to anticipated reasons and rationalizations. Common levers include:

• Asking for help – seeking advice from friends, family, mentors and professional organizations.

• Finding allies – identifying those in the organization who can provide support and probably will have similar concerns to yours.

• Identifying risk – consider both short and long-term consequences of the issue,

• Researching the topic – collecting support for your concern whether that be evidence of the issue, authoritative literature surrounding the proper treatment or policy and procedures manuals, etc.

• Providing solutions rather than complaints – it’s always better to provide a resolution to a problem than complain about the existence of one.

• Considering what is unique about you or the situation that you can use to your advantage, like a new employee being able to raise a concern by starting with “I need your help in understanding something. As a new employee, I probably am misunderstanding or misinterpreting this, but…”

• Identifying the impact stakeholders – both primary and secondary to the issue.

• Highlighting the benefits of the proposed solution.

The use of these levers in conjunction with prepared counterarguments to expected reasons and rationalizations maximizes the chances to successfully resolve the issue. As stated, the goal of the GVV framework is provide people with the confidence and tools necessary to increase the likelihood they will speak up and confront ethical issues they encounter. Specific examples on how this framework can be used are provided in Chapters 3 and 4. What follows is a discussion of the existing theoretical, anecdotal and empirical research on the efficacy of GVV.

Theoretical research

Rest’s (1986) model includes moral sensitivity (awareness), moral judgment (critical analysis), moral intent (planned moral action) and moral courage (taking action). Rest posits action cannot occur unless the first three stages are present. In order to take moral action, more emphasis must be placed on moral values than other factors (Rest 1986). Gentile (2010) echoes Rest (1986) and suggests that courage, or at least confidence, is a useful, if not necessary, trait for voicing our values. Gentile does not consider GVV to be a stand-alone ethical decision-making model but a framework to encourage ethical action.

Arce and Gentile (2015, 537) suggest that

teaching students to recognize ethical challenges in business and to reason through them rigorously are essential skills (e.g. ethical awareness and analysis), but an exclusive focus on these two agendas is both incomplete and potentially problematic. This is because its underlying assumption is that ethical omissions and transgressions are entirely a matter of faulty understanding: that is, individuals either do not identify the ethical problems they encounter, and/or they fail to analyse them effectively. And although these two challenges are real and need to be addressed, they overlook those individuals who knowingly choose to behave unethically, as well as those who would prefer not to behave unethically but still do so.

The authors suggest that GVV has the power to transform business paradigms by introducing ethical considerations into the conversation, reconsidering the goals of the system by integrating concepts of positive and normative decision-making rather that treating them as separate concepts that never meet, and empowering one to add, change, evolve or self-organize system structures by providing a script for doing so. Practitioners have a potential leverage point to counterbalance the pressures that lead to ethical failures and may prevent their future recurrence. Arce and Gentile (2015) detail the integration of GVV into an undergraduate economics course, address how best to go about the integration and customization to various courses and suggest opportunities for future research using pre/post-test surveys or longitudinal studies to assess its efficacy.

Gonzalez-Padron, Ferrell, Ferrell and Smith (2012) express some concerns regarding GVV based on their integration of GVV into both an on campus and online MBA program. While they conclude that GVV is an effective communication tool, they do not believe it should be considered a complete ethical decision-making framework. They suggest that given the ease with which GVV can be integrated into course content, people may believe it to be a replacement for traditional ethics programs which include theory and ethical decision-making models. They suggest it as being additive to traditional programs and specifically call for pre-post intervention studies to determine the true efficacy of GVV.

While Gonzales-Padron et al. (2012) caution against considering GVV as more than a communication tool, Edwards and Kirkham (2013) suggest that GVV could potentially significantly contribute to and expand existing ethical theory. They call for research surrounding how GVV might fit into ethical theories, like Rest’s four stage model of ethical decision making (Edwards and Kirkham 2013). Mintz (2016) incorporated GVV into his development of an ethical decision-making framework based off Rest’s model. Mintz (2016), like Gonzales-Padron et al. (2012), suggests that GVV be considered additive to traditional ethics programs, and not be considered a replacement to them. He also calls for empirical testing of the efficacy of GVV (Mintz 2016). Although GVV has never been proposed as a replacement for traditional ethics programs that focus on awareness and analysis, it does provide the tools and the missing link in effectively resolving ethical conflict – acting on one’s values.

Anecdotal research

Many educators have implemented the GVV program in their classrooms and discuss the benefits of the GVV methodology. Most of what has been written about GVV is descriptive in nature with evidence of efficacy considered speculative at best with many researchers calling for empirical studies to test the effectiveness of the GVV program materials (Chappell, Webb and Edwards 2011; Ingols 2011; Cote, Goodstein and Latham 2011; Mintz and Morris 2013; Lynch, Hart and Costa 2014; Arce and Gentile 2015).

The University of Western Australia Business School introduced a required ethics course for all post-graduate students in 2008, designed around the concepts of GVV, for the purpose of embedding ethics more integrally into the curriculum and to help maintain both EQUIS and AACSB accreditation requirements. A number of factors contributed to their decision to initially implement a GVV stand-alone course including the importance of including ethics in all degree programs within 12 months, minimizing the initial impact of this decision on the broader group of faculty members, and providing the most flexibility on integrating ethics throughout the curriculum over time. Based on anecdotal evidence, Chappell, Webb and Edwards (2011) suggest that the biggest opportunity in offering a required ethics course based on the GVV material is the intensity and depth of learning that is possible for students to increase their awareness of ethical issues and their capacity to act ethically.

At the Simmons College School of Management 2007 Assessment of Learning workshop prior to implementing GVV, faculty learned that their students were not performing well across several categories of learning outcomes related to ethics and the school’s mission of educating women for principled leadership. The faculty were untrained in philosophy or ethics but excited to implement what they referred to as the practical, common sense approach of GVV into five core courses in the MBA program to improve learning outcomes. They saw immediate improvement to associated outcome after the integration of GVV into the first of the five courses. Ingols (2011) believes that the intertwining of several factors increased their students’ knowledge and understanding of ethical issues and their ability to write more clearly and persuasively about ethical issues after implementing GVV across the curriculum.

Cote et al. (2011) found GVV to be effective in increasing undergraduate students’ inclusion of others in case analysis and an effective way to strengthen the coverage of particular learning outcomes at the MBA level. They suggest that when teaching accounting, students practice as many exercises as possible to reinforce theories; however, it has been difficult to provide students repeated practice with ethical challenges. Introducing GVV into the curriculum creates opportunities for realistic practice exercises.

Mintz and Morris (2013) found that case analysis is better under GVV, as role-playing is a more powerful tool than a written assignment. The role-plays using a GVV approach focus on what a person would do and who they would talk to, with a focus on effectively resolving an ethical dilemma. They also believe it to be effective in strengthening professional acc...

Table of contents

• Cover
• Half Title
• Series Page
• Title Page
• Copyright Page
• Dedication
• Table of Contents
• List of illustrations
• List of contributors
• Preface
• Acknowledgements
• Introduction to GVV
• 1. Review of the existing literature related to GVV in accounting
• 2. Assessing the impact of GVV modules in accounting courses
• 3. Building action-oriented tools to tackle ethical challenges in the accounting profession
• 4. Sidney McCallum
• 5. A matter of freight
• 6. Stefano Foods
• 7. Locus of Responsibility: Where does the responsibility lie?
• 8. Non-GAAP earnings A failure to protect the public trust?
• 9. Accounting professional standards and implications for practice
• Index