AN EMPIRICAL REANALYSIS OF THE SELECTION-SOCIALIZATION HYPOTHESIS

1. AN EMPIRICAL REANALYSISOF THE SELECTION-SOCIALIZATION HYPOTHESIS Stephen B. Scofield(deceased) Texas A&M University - Kingsville Thomas J. Phillips, Jr. Louisiana Tech University Charles D. Bailey

2. Stephen B. Scofield

3. Background • Lawrence D. Ponemon “Ethical reasoning and selection socialization in accounting.” Accounting, Organizations and Society 17 (1992), 239–258. Based on his 1988 dissertation at Union College of Union University

4. Poneman's Socialization-Selection Hypothesis • Partners of larger CPA firms have lower levels of moral judgment than incoming auditors. • Through the promotion process, these ensconced partners weed out candidates with high ethical judgments, selecting “less ethical” persons like themselves.

5. Wide Acceptance of Ponemon’s Findings • Cited 22 times as of October 2001 [98 times per Google Scholar 02/07] • “passed into the accepted wisdom” • Anon. reviewer of our paper, 2001 • Ponemon achieved career success • hired as partner by two Big-5 firms • Now president of a privacy/security consulting firm

6. P-score does not differ across rank

7. P-score does not differ across rank

8. P-Scores do not differ across rank or Big-5 experience • Similar nonsignificant results looking just at Big 5, Table 6 • Those who left Big 5 did not have higher ethical reasoning, Table 7 • Power is sufficient to give confidence in nonsignificance (no large or medium difference likely exists).

9. Critique of Ponemon 1988/1992 • Selection–socialization hypothesis is instinctively appealing. • Many professionals have felt pressures to conform, to compromise one’s ethical code. • To place high value on conformance to society is to move toward Kohlberg’s (1969) ‘‘conventional’’ reasoning, below the level of principled reasoning. • In his dissertation, Ponemon (dissertation, 1988) recounts his personal experience • his ‘‘tension level to paranoiac proportions’’ in interview

10. Two discrepancies undermine Ponemon’s Results: • Demographics of his data differ greatly from the population from which the sample was drawn • What’s wrong?! • No effective control exists for the possible effects of firm size.

11. Fig. 1. AICPA membership in public practice, by firm size.“Firms with fewer than50 professionals constitute 78% of the populationbut only 17% of the recordsin Ponemon …. Firms with more than 50professionals constitute only 22% of the populationbut make up 83% of Ponemon’s respondents…. [not] a random departure from the… AICPAmembership (Chi2=74.10, p<0.001).” (p. 547)

12. Ponemon’s DIT stage scores are weird!Extreme drops in Stages 4 & 5 reasoning, big increase in Stage 3. Our data are consistent between samples and reflect normal developmental expectations.

13. Epilogue • http://seclists.org/politech/2001/Jun/0081.html • http://www.ponemon.org/index.html