The Effect of Professional Context on Accounting Students' Moral Reasoning

ABSTRACT: This study investigates whether the professional context of accounting ethical dilemmas influences accounting students' moral reasoning. In a between‐subjects experiment, 101 accounting students from a large public AACSB‐accredited university in the U.S. responded to four ethical dilemmas faced by either auditors or corporate accountants designed to measure their deliberative moral reasoning. As expected, students in the audit condition exhibited significantly higher deliberative moral reasoning than students in the corporate accounting condition. Supplemental analysis indicates this finding is robust to commonly influential demographic characteristics and perceptions about the current business environment. These results are consistent with accounting students having more audit‐based ethical knowledge structures which do not flexibly transfer to resolving ethical issues in the corporate accounting context.