Accountants and Their Conduct: Implications of Behavioral Ethics

1. Accountants and Their Conduct: Implications of Behavioral Ethics December 5, 2013 Robert Prentice Robert.Prentice@mccombs.utexas.edu

2. Let’s start with a little survey…

3. A quick quiz: Question #1: I have solid, well-considered ethical beliefs that can be changed only by reasoned arguments or new evidence. ___True ___ False

4. Question #2: I have character and integrity that will carry me through difficult situations and hard choices. ___ True ___ False

6. Good News: You’re not as unethical as you could be…

7. How many of you stole candy from a baby this week?

8. How many of you took an opportunity to mug a little old lady?

9. Bad News: You are not as ethical as you think you are.

10. We are all Lance Armstrong…sort of.

12. Humility

13. The McGurk Effect

15. Optical Illusions

17. There are even tactile illusions…

18. A quick quiz: Question #1: I have solid, well-considered ethical beliefs that can be changed only by reasoned arguments or new evidence. ___True ___ False

19. A quick quiz: Question #1: I have solid, well-considered ethical beliefs that can be changed only by reasoned arguments or new evidence. ___True _X_ False

20. Question #2: I have character and integrity that will carry me through difficult situations and hard choices. ___ True ___ False

21. Question #2: I have character and integrity that will carry me through difficult situations and hard choices. ___ True _X_ False

22. If there is one overwhelming finding in behavioral ethics research over the past decade, it is this:

23. If there is one overwhelming finding in behavioral ethics research over the past decade, it is this: • Most people (including accountants) want to and do think of themselves as good people

24. 80% or so of people believe themselves to be more moral than their peers • 92% of Americans are satisfied with their moral character • A higher percentage of people believe they themselves will get into heaven than that Mother Theresa did.

25. Most people (including accountants) want to and do think of themselves as good people • Most people (including accountants) frequently act unethically, usually in minor ways

26. Most people want to and do think of themselves as good people • Most people frequently act unethically, usually in minor ways • Our accomplice:

27. Moral Beliefs and Attitudes: 10---9---8---7---6---5---4---3---2---1 Very Ethical Very Un- ethical

28. Moral Beliefs and Attitudes: 1) Self-Interest

29. Your views on the morality of homosexual conduct might well change if your son comes out of the closet….

30. “Rob Portman Supports Same-Sex Marriage After Learning Son Is Gay” Senator Rob Portman, (R)-Ohio

31. Your views on the morality of premarital sex might change if your teenage daughter got pregnant…

32. 2) Emotional Reaction

33. 2) Emotional Reaction Disgust 10---9---8---7---6---5---4---3---2---1 Very Ethical Very Unethical

36. Frank is on a footbridge over the trolley tracks. He knows trolleys and can see that the one approaching the bridge is out of control, with its conductor passed out. On the track under the bridge, there are five people; the banks are so steep that they will not be able to get off the track in time. Frank knows that the only way to stop an out-of-control trolley is to drop a very heavy weight into its path. But the only available, sufficiently heavy weight is a large person also watching the trolley from the footbridge. Frank can save the five by shoving the large person onto the track in the path of the trolley, resulting in his death; or he can refrain from doing this, letting the five die. Is it morally permissible for Frank to push the large person onto the tracks?

38. Bottom Line: Our moral views are not as fixed as we think.

39. Moral Actions Most of us (including accountants) believe that we have rock solid character that leads us to act morally….

40. Most people (including accountants) are largely unaware of factors that cause good people to do bad things: • Cognitive errors • Social pressures • Organizational pressures • Other environmental factors

41. Fundamental Attribution Error: • Underweight situational factors in others • Overweight them in ourselves

42. Let’s Talk About Some of those Factors 1) Transparency “Integrity is living your values even when no one is looking.”

43. 1) Transparency

44. 1) Transparency

45. 1) Transparency

46. 1) Transparency

48. 2) The Self-Serving Bias

49. a. Affects how we collect, process, and even remember information.

50. i. Collect