The effects of accounting students' ethical reasoning and personal factors on their ethical sensitivity

Samuel Y S Chan, Philomena Leung*

*Corresponding author for this work

Research output: Contribution to journalArticle

74 Citations (Scopus)


Purpose - Rest posited that to behave morally, an individual must have performed at least four basic psychological processes: moral sensitivity; moral judgment; moral motivation; and moral character. Though much ethics research in accounting has been focused on component two, ethical judgment, less research has been undertaken on the other three components. The purpose of this study is to focus on component one, ethical sensitivity, of Rest's four-component model. Design/method ology/approach - A sample of 156 accounting undergraduates was employed to investigate the ethical sensitivity of accounting students and the effects of their ethical reasoning and personal factors on their ethical sensitivity. Findings - Results of this study show that accounting students vary in their ability to detect the presence of ethical issues in a professional scenario. There is no significant relationship between accounting students' ethical sensitivity and their ethical reasoning (P-score). Accounting students characterized as "internals" are more likely to show an ability to recognize ethical issues than those characterized as "externals." The results also indicate that an accounting ethics intervention may have positive effect on accounting students' ethical sensitivity development. Hence, an individual who possesses the ability to determine what is ethically right or wrong (high ethical reasoning) may fail to behave ethically due to a deficiency in identifying ethical issues (low ethical sensitivity) in a situation. Originality/value - Whilst much research has concentrated on ethical reasoning and ethics education to enhance the ethical conduct of accountants, it is important that the profession and researchers also direct their attention and efforts to cultivating the ethical sensitivity of accountants. The findings of this study provide additional evidence to support Rest's theory of a more comprehensive cognitive model of ethical decision-making and suggest a more balanced research effort in evaluating the ethical development of individuals.

Original languageEnglish
Pages (from-to)436-457
Number of pages22
JournalManagerial Auditing Journal
Issue number4
Publication statusPublished - 2006
Externally publishedYes


  • Accounting
  • Ethics

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