II. Alternative perspectives for thinking about accounting ethics

VIRTUE ETHICS AND THE ACCOUNTING PROFESSION

Introduction

High-profile ethical failures during the 1960s and 1970s resulted in increasing regulation and oversight of the accounting profession (Cowton 2017); yet scandals have continued to plague the profession in more recent decades. Accounting is an art (techne) requiring considerable professional judgment, and lists of rules cannot anticipate every situation (Mele 2005; West 2017). In fact, accounting rules often require significant professional judgment to interpret, and these rules require frequent amendments to accommodate new social trends and economic practices. Therefore, regulations that focus on specific actions may be an insufficient foundation upon which to build the profession (Cowton 2017; West 2017, 2018a). Virtue ethics represents an alternative perspective that focuses on the character of the professional rather than specific actions or outcomes. Virtue ethics starts by asking what it means to be a good accountant. Then it asks which intellectual and moral virtues an accountant must develop in order to act in the best way. Virtues should make it easier, or even instinctive, for professionals to serve their clients’ needs and the public interest even in unique or novel situations. However, we need to establish which virtues accountants need and how they may develop them. This requires research by subject matter experts who understand the accounting profession as well as virtue ethics.

Virtue ethics is one of the three leading schools of ethics, along with deontology and consequentialism (Besser-Jones and Slote 2015). Systems of ethics based upon virtue were the norm in ancient and medieval Western philosophy (Frede 2015) and have remained in favor in non-Western ethics.1 However, virtue ethics is essentially a contemporary movement that began as a critique of both deontology and consequentialism (Anscombe 1958; Hursthouse and Pettigrove 2017; Snow 2017).- Therefore, perhaps the simplest way to understand where contemporary virtue ethics stands is by contrasting its position with those of deontology' and consequentialism.

Whereas deontology' asks what a person should do, virtue ethics asks what a person should be (MacKinnon and Fiala 2014). So virtue ethics places primacy on the goodness of a persons character rather than the rightness of a person’s actions (Oakley' and Cocking 2001). ’ Virtue ethics is certainly concerned with the consequences of actions; however, virtue ethics does not require the common good to be maximized by' an act for that act to be considered “good"

(Nussbaum 1988). Rather, virtue ethics places primacy on the development of a person's character, because only a person of good character can live in a state of human flourishing (Kraut 2018).

Accounting ethics research happens to have been dominated by deontology and conse-quentialism. The Defining Issues Test (DIT) has had an overwhelming influence on behavioral research in accounting ethics (Bailey, Scott, and Thoma 2010). The DIT proposes a six-stage hierarchy of morality wherein the highest levels of moral development are exemplified by utilitarian consequentialism (stage 5) and deontology (stage 6), the highest level of moral development (Rest 1994). The DIT questions also happen to focus on actions and outcomes. Consequently, there has been relatively little attention paid to virtue ethics within accounting research.

Virtue ethics can certainly be applied to business, and there are several notable contributions from management scholars (Alzola 2015; Audi 2012; Moore 2005a, 2005b; Murphy 1999; Whetstone 2001). There have also been a few notable exceptions within accounting literature. These papers have considered virtue ethics as it relates to the profession as a whole (Francis 1990; Mêlé 2005), accounting education (Mêlé 2005; Mintz 1995, 2006), and tax practice (West 2018b). In addition, at least one accounting ethics textbook emphasizes the virtue ethics approach (Cheffers and Pakaluk 2007).

More recently, some accounting scholars have begun to address how virtue ethics might inform codes of professional conduct (Cowton 2017; West 2017, 2018a). They argue that scandals continue to occur despite increased regulation and oversight of the profession (Cowton 2017; West 2017, 2018a). Since accounting is an art, requiring considerable judgment, lists of rules focusing on outcomes may be insufficient to anticipate every situation (Mêlé 2005; West 2017). While it may be unwise to dispense entirely with lists of rules, virtue ethics may provide a more nuanced philosophical underpinning for a code of ethics through its focus on professional excellence and character (West 2018).

Contemporary virtue ethics does not present a unified theory (Sanford 2015). While many draw from Aristotelean ethics (Snow 2017)4, others draw on diverse traditions, such as Confucianism (Loy 2014; Luo 2015; Sim 2015), Buddhism (Goodman 2015; Adams 2017) and Hinduism (Bilimoria 2014; Perrett and Pettigrove 2015). In an increasingly multicultural world, one of the benefits of adopting a virtue ethics approach may be the fact that theories of virtue already exist in so many different cultures around the world. Reading these different accounts, it is apparent that the lists of virtues share more similarities than differences.

The review of existing accounting literature in this chapter suggests that accounting scholars have focused primarily on two works to date: Aristotle’s Nicomachean Ethics (NE) and Alasdair MacIntyre’s After Virtue (AV). Since Aristotle was the first thinker to provide a systematic, comprehensive study of virtue (Frede 2015), NE provides a useful starting point for a discussion of virtue. MacIntyre aims to extend Aristotelean ethics. So AV provides an interesting insight into how contemporary virtue ethics has revived the study of virtue and contributed its own ideas. Therefore, I shall start my discussion with Aristotle’s concept of virtue and, drawing on the work of other accounting researchers, attempt to formulate a list of essential virtues for accountants. Then I shall discuss some of the important concepts introduced by MacIntyre, including the concepts of a practice and internal goods. This frames the discussion of accounting as a practice that can help develop the essential virtues. As I do this, I shall point to some opportunities for future research, accounting education, and professional development.

 
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