Making ethical accounting decisions: the effect of ethical orientation on the decision process

This research examines the role of ethical orientation in making ethical decisions. Two aspects of ethical orientation are measured using Forsyth's (1980) Ethics Position Questionnaire (EPQ): 1) ones preference for following moral rules in ethical situations (relativism) and 2) ones concern that ethical actions must lead to positive consequences for those affected by the action (idealism). Subjects scoring high/low on the relativism and idealism scales were identified and further classified into ethical orientation categories according to Forsyth's (1980) typology.

Subjects read four scenarios depicting ethical dilemmas in accounting-related contexts. Subjects evaluated the action described in each scenario using items identified as useful indicators of overall ethical judgments and behavioral intention in Flory et al. (1992). The relationship of relativism and idealism to overall ethical judgments and to behavioral intention was examined.

The results indicate that high relativists' overall ethical judgments are influenced by a variety of situational variables while low relativists judgments are influenced only by variables related to broad moral rules. High idealists' and low idealists' judgments were also found to differ. High idealists' mean judgment scores were greater for scenarios that had more severe potential consequences than for scenarios where the potential consequences were less severe. And generally, low idealists' judgment scores were the same for the different scenarios, regardless of the severity of possible consequences. However, neither ethical orientation, nor relativism nor idealism, were found to be strongly related to subjects' behavioral intention. Implications of these finding are discussed and suggestions for further research are presented.