1 GREY AREA OF ETHICS: THE SIGNIFICANCE OF LEVINAS’ PERSPECTIVE ON ACCOUNTING STUDENTS’ DELIBERATIVE MORAL REASONING Kias Ayu Damara Supriyadi ( Universitas Gadjah Mada ) ABSTRACT:This study aims to analyze the significance of Levinas‟ perspective on the deliberative moral reasoning of accounting students when facing a grey area of ethics in a corporate accounting context. In a between-subjects experimental design, 36 undergraduate accounting students at Faculty of Economics and Business, UniversitasGadjahMada, were randomly assigned into two groups, which are treatment group and control group. The first group received a treatment of Levinas‟ perspective, while the second received no treatment at all. However, both responded to the same four ethical dilemmas faced by corporate accountants designed to measure their deliberative moral reasoning. As expected, students in the treatment group exhibited significantly higher deliberative moral reasoning than those in the control group. This result thus suggests that Levinas‟ perspective has significance on accounting students‟ deliberative moral reasoning when facing a grey area of ethics in a corporate accounting scheme. Keywords: Levinas‟ perspective, deliberative moral reasoning, accounting students, grey area of ethics. INTRODUCTION Nowadays, there has been a widespread belief that the world is facing the era of moral freedom, when people are more inclined to create their own morality (Wolfe, as cited in Bruhn, 2009).Corporate accountants, as we fully aware, are likely to face the grey area of ethics. It is possibly due to their position, as explained by Gowthorpe and Amat (2005) that preparers of financial statements are in a position to manipulate the economic reality view provided by those statements to interested parties. As such, accountants now, as a group, are regarded to have lower levels of moral reasoning than other professional groups (Eynon et al., as cited in McPhail& Walters, 2009).
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GREY AREA OF ETHICS: THE SIGNIFICANCE OF LEVINAS’
PERSPECTIVE ON ACCOUNTING
STUDENTS’ DELIBERATIVE
MORAL REASONING
Kias Ayu Damara
Supriyadi
( Universitas Gadjah Mada )
ABSTRACT:This study aims to analyze the significance of Levinas‟ perspective on the
deliberative moral reasoning of accounting students when facing a grey area of ethics in a
corporate accounting context. In a between-subjects experimental design, 36 undergraduate
accounting students at Faculty of Economics and Business, UniversitasGadjahMada, were
randomly assigned into two groups, which are treatment group and control group. The first
group received a treatment of Levinas‟ perspective, while the second received no treatment at
all. However, both responded to the same four ethical dilemmas faced by corporate accountants
designed to measure their deliberative moral reasoning. As expected, students in the treatment
group exhibited significantly higher deliberative moral reasoning than those in the control
group. This result thus suggests that Levinas‟ perspective has significance on accounting
students‟ deliberative moral reasoning when facing a grey area of ethics in a corporate
accounting scheme.
Keywords: Levinas‟ perspective, deliberative moral reasoning, accounting students, grey area
of ethics.
INTRODUCTION
Nowadays, there has been a widespread belief that the world is facing the era of moral
freedom, when people are more inclined to create their own morality (Wolfe, as cited in Bruhn,
2009).Corporate accountants, as we fully aware, are likely to face the grey area of ethics. It is
possibly due to their position, as explained by Gowthorpe and Amat (2005) that preparers of
financial statements are in a position to manipulate the economic reality view provided by those
statements to interested parties. As such, accountants now, as a group, are regarded to have
lower levels of moral reasoning than other professional groups (Eynon et al., as cited in
McPhail& Walters, 2009).
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Apart from an individual‟s ethical ideology and moral philosophy, some blamed the
negative effect business and accounting education have on ethical development of students
(McCabe and colleagues, 1991, and Gray and colleagues, 1994, as cited inMcPhail& Walters,
2009). More specifically, some researchers pointed out that ethics education students received
during college are seen to contribute to poor ethical choices (Jennings, 2004; Fleming et al.,
2009). Vis-à-vis to that argument, Roberts also noted that ethics in business can only be
perceived as a strategy of being seen to be ethical, which is the obverse of being responsible (as
cited in Aasland, 2004).
The above issue is important since ethics education which does not depart from the „real
ethics‟ may not result in ethical behavior of students expected to be corporate accountants in
the future. This study thus examines how to enhance the deliberative moral reasoning of
accounting students, which involves the formulation of an intention to act on a particular
ethical dilemma (Thorne, 2000) with Levinas‟ perspective which is argued to be related to what
„real ethics‟ is. The focus on the deliberative moral reasoning is chosen because according to
Fleming et al. (2009), understanding students‟ ability to execute professional judgment is
crucial to assessing the outcome of accounting education.
Moran (in McPhail& Walters, 2009) explained that, for Levinas, the phenomenology of
ethics is associated with „the effort to constrain one‟s freedom and spontaneity in order to be
open to the other person, or more precisely to allow oneself to be constrained by the other.‟ In
other words, there is a tendency to do otherwise than privileging oneself over the others
(Aasland, 2004). Such a motive is what Aasland called ethics. This study then hypothesizes that
there is a significant difference in the deliberative moral reasoning between students with
Levinas‟ perspective and those without it.
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The hypothesis is tested by employing a 1 x 2 between subject experimental design.
Thirty six undergraduate accounting students who participated in this study were randomly
assigned into two groups, of which treatment group got Levinas‟ treatment,while control group
did not get it, yet, both groups responded to the same measurement of deliberative moral
reasoning in corporate accounting context, which is Fleming et al.‟s adaptation of Accounting
Ethical Dilemma Instrument (AEDI) developed by Thorne. As expected before, there is a
significant difference between deliberative moral reasoning in both groups. Moreover, this
research found that accounting students in the treatment group exhibited a higher level of
deliberative moral reasoning than those in the control group.
The results of this study enrich the studies of behavioral accounting and encourage
further research aimed to enhance the deliberative moral reasoning of accounting students who
later might become corporate accountants.As for accounting students, this research provides a
new approach which may help those who consider to becorporate accountants to exercise a
better professional judgment under a grey area of ethics.
The remaining of this paper is organized as follows. In the next section, background in
regards to ethics education is discussed and hypothesis of this research is developed. The
following section addresses research method for this study and presents the results. At last, this
paper concludes the research, outlines the limitations, as well as proposes some suggestions for
future research.
LITERATURE REVIEW AND HYPOTHESIS DEVELOPMENT
Ethical Ideologies: Idealism vs. Relativism
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Smith and Quelch (as cited in Lu & Lu, 2010) emphasized that the sources of ethical
disparities among individuals are idealism and relativism. Moral relativism alleges that all
moral standards are concerned with the culture in which they happened (Schlenker& Forsyth,
as cited in Lu & Lu, 2010). Forsyth stated that highly relativistic individuals are more likely to
believe that morals action depend on the encompassing circumstances and individuals involved
than believing simply in absolute moral truths (as cited in Marques & Pereira, 2009). Based on
moral relativism, moral rules cannot be derived from universal moral principles, but abide as a
function of time, place, as well culture. Thus, there is no set of rules that can be formulated to
determine what is right and what is wrong for all individuals (Swaidan,Vitell, &Rawwas,
2003).
Meanwhile, idealism describes the extent to which an individual focuses on the inherent
rightness or wrongness of an action, despite the consequences of that action (Swaidan et al.,
2003). Forsyth (as cited in Lu & Lu, 2010) explained that idealistic individuals comply with
moral absolutes when making moral judgments. Meanwhile, less idealistic people think that
harm is sometimes needed to produce well. They prefer to have a utilitarian perspective
suggesting that an action is right if it produces the greatest good for the greatest number of
people affected by the action, although it may harm a certain group of people (Forsyth, as cited
in Swaidan et al., 2003).
Cognitive-Development Theory
In general, people with cognitive developmental perspective have concentrated on the
study of the development of cognitive reasoning structures which trigger an ethical decision
choice (Thorne, 2000). Referring to Kohlberg‟s model of Cognitive Moral Development
(CMD), there are three levels of moral development, which are pre-conventional, conventional,
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and post-conventional (McPhail& Walters, 2009). For those with pre-conventional moral
development, the moral acceptability of alternative actions is defined by the rewards and
punishments. For people with conventional moral development, the moral acceptability
confirms to group norms. As for the last, moral development considers universal moral
principles regardless of the impacts on oneself (Thorne, 2000).
Based on this perspective, Rest‟s Model of Ethical Action has been widely used to define
the ethical decision process of accountants (Thorne 1998; Thorne 2000; Jones et al. 2003, as
cited in Fleming et al, 2009). The model has four components including: (1) identification of an
ethical dilemma, (2) ethical judgment, (3) intention to act ethically, and (4) ethical behavior
(Rest, as cited in Fleming et al, 2009).
The focus of this study is on investigating the ethical judgment by examining the
development and level of corporate accountants‟ moral reasoning, especially the deliberative
moral reasoning. As Thorne (2000) stated that deliberative reasoning is similar to an
accountant‟s intention to execute professional judgment to resolve an ethical dilemma.
Ethics for Business vs. Ethics in Business
Business ethics is recently being a very prominent business topic. Moreover, the
dilemmas and debates addressing business ethics have drawn a number of attention from
various parties (Crane &Matten, 2007). Aasland (2009) stated that there is still an unanswered
question left from both American and European literature: Is „business ethics‟ a knowledge of
„ethics for business‟ or is it a knowledge of „ethics in business?
Aasland (2009) stated that ethics for business describes – and prescribes – how
companies respond to ethical challenges in society, and thereby constitutes an important part of
the knowledge called business management. There are several reasons why Aasland regarded
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ethics for business as instrumental knowledge and not „real ethics‟: 1. The main interest of
business leaders is to find tools that can work instead of looking for the truth about humans as
well as their perspectives on right and wrong; 2. Economic and business management
knowledge is equipped with a logical structure, sometimes called „boomerang effect‟. It means
that it will always pay to behave morally, because if one does not, it will hit back at oneself and
one‟s company as decreased trust or a negative reputation; 3. In the end, pursuing the interest of
a company and more than that of others is self-centered perspective.
In contrast, what Aasland (2009) called ethics in business is the occurrence of the idea
that it is possible to put the other before myself, also within and between business
organizations. Thus, the difference between both terms is that, while ethics for business is
knowledge that business develops and applies for itself, ethics in business is ethics which can
only be applied and developed for the sake ofthe other.
Levinas’ Perspective
Campbell et al. (2009) argued that within a different stream of accounting ethics literature
there is a small but growing discussion about the ethics of Emmanuel Levinas (Shearer, 2002;
MacIntosh, 2004; Roberts, 2003; McKernan and KosmalaMacLullich, 2004) as well as a
sociological translation of Levinas‟ work provided by Zygmunt Bauman (McPhail, 2001;
Funnell, 1998; Junge, 2001, Tester, 2002). Levinas perceived ethics by employing a very
different perspective from traditional moral philosophy. He brought a phenomenological view
to the study of ethics (McPhail& Walters, 2009). He commented:
The absolute nakedness of a face, the absolute defenceless face, without covering,
clothing or mask, is what opposes my power over it, my violence and opposes it in an
absolute way, with an opposition which is opposition itself (cited in Bauman, 1993, p.
73).
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Levinas questioned, „how does the experience of ethics present itself to us; what is the
given-ness of ethics?‟ He realized that it presents itself through the Other, through the
encounter with the face; through the face to face (McPhail&Walters, 2009). To better
understand Levinas‟ perspective, there is Bauman‟s thought about Levinas‟ work within a
modern social context.
It will be only later, when I acknowledge the presence of the face as my responsibility,
that both I and the neighbor acquire meanings: I am I who is responsible, he is he to
whom I assign the right to make me responsible. It is this creation of meaning of the
Other, and thus also of myself, that my freedom, my ethical freedom, comes to be. (As
cited in Bauman, 1993: 86)
Bauman‟s explanation above makes Levinas‟ perspective more applicable to the
sociological perspective. It is the fundamental of sympathy and core responsibility for others
implied from Levinas‟ work. In order to bring Levinas‟ work into the economy, this research
suggests to once again refer to Aasland‟s book.
Aasland (2004) opened up the issue by explaining what Spinoza called conatus essendi
is. It is a will to preserve oneself, that applies to all unliving, as well as all living. However,
humans do not always follow their conatus. This kind of ethics differs with other ethical
ideologies which stated that ethics is developed from a reason, or even consequences one may
have on oneself as well as the others. Nonetheless, why it emerges is caused by the faculty to
be conscious and to reflect about himself or herself that each human has.
The capacity to question the conatus and set the other before oneself is, by Levinas,
suggested to happen from the encounter with the Other. Yet, he also acknowledges that I not
only meet with the Other, but also the third, the fourth, etc., as the Others. By then, I am forced
to always do evaluation, comparison, and searching for what is just, because the called forth
mercy for each unique Other drives me to always strive for more justice.
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Levinas‟ grounding of ethics begins with „the way the face of the Other makes a claim on
me to restrain myself‟ (McPhail& Walters, 2009). Moran (as cited in McPhail& Walters, 2009)
explained that for Levinas, the phenomenology of ethics involves „the effort to constrain one‟s
freedom and spontaneity in order to be open to the other person, or more precisely to allow
oneself to be constrained by the other.‟ This idea of good to be able to put the Other before the
I is what Aasland (2009) argued as the „real ethics‟. This research brings this perspective to be
applied in accounting context, particularly in the grey area of ethics faced by corporate
accountants.
Accordingly, the following alternative hypothesis tests the applicability of such
perspective in corporate accounting context.:
Ha: There is a significant difference in the deliberative moral reasoning between accounting
students, treated as corporate accountants, who get Levinas‟ treatment and those who do not.
RESEARCH METHOD
Participants
There were 48 undergraduate accounting students from Faculty of Economics and
Business, UniversitasGadjahMada, who participated in this study. Of the 48 participants, eight
failed the internal validity check. Furthermore, two failed in completing the assignments, and
the other two participants were omitted because they did not complete the assignments as
directed, thus, resulting in a final sample of 36. Based on demographic data, sixty-four percent
of the students were female, seventy-eight percent of the students were in their fourth year of
study at FEB UGM, and all of the participants had completed a business ethics course as well
as a cost accounting course.
Research Design, Variables, and Measurement
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This study analyzes the significance of Levinas‟ perspective on the deliberative moral
reasoning of accounting students in a corporate accounting context by employing a 1x2
between subject experimental design. The independent variable in this research is Levinas‟
perspective which is embedded in the treatment scenario, whereas the dependent variable being
studied is the deliberative moral reasoning of accounting students treated as corporate
accountants. Moreover, there is a control group who did not get any treatment.
As of the deliberative moral reasoning of accounting students treated as corporate
accountants, it is measured by Fleming et al.‟s adaptation of Accounting Ethical Dilemma
Instrument (AEDI) developed by Thorne. This instrument consists of four different cases which
capture elements of the standards of ethical practice-competence, confidentiality, integrity, and
credibility-set forth in the IMA Statement of Ethical Professional Practice (Institute of
Management Accountants [IMA], as cited in Fleming et al., 2009). Furthermore, each of them
shows the ethical dilemma faced by a corporate accountant and has questions related to how
they believe “the accountant described in the case would realistically respond, taking into
consideration the pressures and tradeoffs that influence accountants‟ behaviors on the job”
(Thorne, as cited in Fleming et al., 2009).
After reading the cases, participants in both groups rated the importance of predetermined
12 items for consideration on five-point scales (SangatPenting, Penting, CukupPenting,
AgakPenting, danTidakPenting). In each case‟s items for considerations, there are three items
representing principled moral development. Afterwards, the participants ranked in order of
decreasing importance the four most important considerations to a realistic response to the
ethical dilemma (Fleming et al., 2009). Each participant‟s DP-SCORE was then calculated by
adding the points assigned to the principled items for consideration based on the rankings for
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each case (4 points for first rank, 3 points for second rank, 2 points for third rank, and 1 point
for fourth rank) and converting the participant‟s total points to a percentage of total possible
points (Thorne, as cited in Fleming et al., 2009). The total scores provided an insight the extent
to which each participant‟s deliberative moral reasoning affects his/her real action when facing
a grey area of ethics. Further analysis examines the significance of Levinas‟ work on the
deliberative moral reasoning of accounting students.
RESULTS
Descriptive Statistics
Descriptive statistics summarizes the mean, standard deviation, minimum, and maximum
of the samples being studied.
Table 1
Descriptive Statistics
N Minimum Maximum Mean Std. Deviation
DPScore1 18 12.50 40.00 25.5556 7.55157
DPScore2 18 2.50 37.50 16.1111 8.36758
Valid N (listwise) 18
The results of the descriptive statistics presented in the Table 4.1.1 describe that there are
36 samples in this research, divided equally to a treatment group (denoted as Group 1) and to a
control group (denoted as Group 2). The deliberative moral reasoning (denoted as DPScore) of
Group 1 has a minimum of 12.50 and a maximum of 40.00, with a mean of 25.5556. On the
other hand, the DPScore of Group 2 shows a minimum of 2.50, a maximum of 37.50, and a
mean of 16.1111.
From the results above, it can be noted that the deliberative moral reasoning of the
treatment group is, on average, higher than that of the control group.
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Normality Test
Since the data used in this research are ratio data, then a normality test on the data should
be carried out to meet another parametric assumption. Thus, the Kolmogorov-Smirnov test is
conducted. If the value of K-S significance is greater than the significance level (α) of 0.05,
thus, data are normally distributed. The results of this test are as follows.
Table 2
Test Statisticsa
DPScore
Most Extreme Absolute .556
Differences Positive .000
Negative -.556
Kolmogorov-Smirnov Z 1.667
Asymp. Sig. (2-tailed) .008
a.Grouping Variable: Group
The test statistic table indicates that the probability of the Kolmogorov-Smirnov Z
statistic falls below the significance level of 0.05, that is, 0.008. It means that the distributions
of the two groups are significantly different from each other, thus, the null hypothesis stated
that data are normally distributed is rejected.
The Mann-Whitney Test
As data are not normally distributed, then a nonparametric test of two independent-
samples, which is Mann-Whitney test, is used.
Table 3
Ranks
Group N Mean Rank Sum of Ranks
DPScore 1 18 24.31 437.50
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2 18 12.69 228.50
Total 36
Table 4
Test Statisticsb
DPScore
Mann-Whitney U 57.500
Wilcoxon W 228.500
Z -3.320
Asymp. Sig. (2-tailed) .001
Exact Sig. [2*(1-tailed Sig.)] .001a
a. Not corrected for ties
b. Grouping Variable: Group
The Mann-Whitney test results as shown in Table 4.4 indicate that there is a significance
difference between both groups. That is, the treatment group exhibited a significantly higher
deliberative moral reasoning than the control group. It is explained by the fact that the test
shows a significance value of 0.001, which is less than the significance level of 0.05. Therefore,
the hypothesis of this study is accepted.
The Independent-Samples T Test
Nevertheless, even though the normality test failed to prove that the data used in this
study are normally distributed, but by referring to the Central Limit Theorem, the data of more
than 30 can be regarded as normally distributed data. Hence, this research performs a
parametric test to draw a conclusion about whether or not the hypothesis is accepted. Analytical
technique used for this study is the independent- samples t-test by utilizing SPSS 15.0. The
independent-samples t-test is conducted to see if there are any significant differences in the
means for two groups in the variable of interest (Sekaran&Bougie, 2010). In this research, the
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means of deliberative moral reasoning from a treatment group and a control group were tested
to see whether there is a significant mean difference between them.
1) 1988 Undergraduate Degree in Accounting (Drs.),
Faculty of Economics, Universitas Gadjah
Mada
2) 1993 Master of Science in Accounting at the
University of California, Fresno, USA
3) 1998 Doctoral Degree in Accounting at the
University of Kentucky, USA
RESEARCH
INTERESTS
1. Financial Accounting
2. Behavioral Accounting
3. Business and Professional Ethics
COURSE TAUGHT
Introductory Accounting I (Undergraduate Program)
Intermediate Accounting I (Undergraduate Program)
Behavioral Accounting (Master of Science Program)
Business and Professional Ethics (Master of Applied Program)
Behavioral Research in Accounting (Doctorate Program)
PROFESSIONAL
ORGANIZATION
MEMBERSHIP
The Indonesian Institute of Accountant
A Member of Appealing Committee (2006-2011)
The Head of Yogyakarta Branch (2011-2016)
INTELLECTUAL
CONTRIBUTION1
Peer Reviewed Journal
1. 2011 Exploring the Model of Internet Use: Indonesian
Contect. Co-Author, Published in UTCC-
International Journal of Business and Economics
(Thailand), Vol. 3, No. 1
2. 2010 The Moderating Effect of Procedural Justice on the
Effectiveness of the Balanced Scorecard
1 For each of the intellectual contributions, please categorize whether the intellectual contribution is
Learning and Pedagogical Research (contribution influence the teaching-learning activities of the school), or Contributions for Practice (influence professional practice in the faculty member’s field), or Discipline-based Research (contributions add to the theory or knowledge base of the faculty member’s field).
28
Performance Measures in Improving Managerial
Performance through Organizational Commitment.
Gadjah Mada International Journal of Business,
Vol. 12.No. 3
3. 2005 Analisis Moderasi Set Kesempatan Investasi
Terhadap Hubungan Antara Kebijakan Deviden
dan Aliran Kas Bebas dengan Tingkat Leverage
Perusahaan (Moderation Analysis on Investment
Opportunity toward The Relationship Between
Dividend Policy and Free Cash Flow with
Company‟s Leverage Level). Co-Author,
Published in Jurnal Ekonomi dan Bisnis, Vol. X1
No. 2
4. 2005 The Influence of Contingency Factor as
Moderating Variable to the Relation between
Users‟ Participation and the Success of
Information System in PTP Nusantara – XIV
(Persero). Co-author. Published in Jurnal
Sosiosains Vol. 18, No. 1
5. 2005 Pengaruh Krisis Moneter terhadap Nilai Tambah
Informasi Arus Kas (The Influence of Monetary
Crisis on the Value Added of Cash Flow
Information). Co-author. Published in Jurnal
Akuntansi & Investasi, Vol. 6, No. 1
6. 2003 Executive Involvement and Participation in the
Management of Information System. Co-author.
In: Jurnal Sosiohumanika, Vol. 16A, No. 3
Research Monograph
1. 2011 Examining Order Effect and Response Mode on
Investment Judgment. Co-Author. Presented in the
peer-reviewed international conference in
29
Amsterdam, The Netherland 2012.
2. 2011 The Effectiveness of Flexible Working
Arrangement and Stress Management Training in
Mitigating Auditors‟ Burnout: An Experimental
Study. Co-Author. Presented in the peer-reviewed
international conference in Melbourne, Australia
2012.
3. 2010 Culture and Effectiveness of Good Corporate
Governance Implementation: Indonesian Case
Study. Research Project sponsored by POSCO
South Korea (Peer-reviewed Research
Competition). Co-Author.
PROFESSIONAL
QUALIFICATION
Professional Experience2
1. 2008 – present Director of Master of Science and
Doctorate Programs, FEB, Universitas
Gadjah Mada
2. 2011 – present Head of the Indonesian Accounting
Association – Yogyakarta Branch
3. 2007 – 2011 A Member of the Appealing Committee
of the Indonesian Accounting
Association
4. 2007 – 2008 Associate Dean for Academic Affairs,
FEB, Universitas Gadjah Mada
5. 2004 – 2007 Director of Master of Management
Program, Universitas Gadjah Mada
6. 2003 – present Editorial Board Member, Jurnal
Manajemen Akuntansi dan Sistem
Informasi MAKSI, Master of Science in
Accounting Program, Diponegoro
2 Position hold in a company or organization as BoD, Commissioner, etc. OR Position hold in profession