An examination of the moral reasoning abilities of Cypriot Accounting students MARIOS (MAZ) DEMOSTHENOUS A thesis submitted in partial fulfillment to obtain the Degree of Doctor of Education at Flinders University College of Education, Psychology and Social Work FLINDERS UNIVERSITY OF SOUTH AUSTRALIA September 2017 1 Declaration I certify that this study does not incorporate without acknowledgment any material previously submitted for a degree or diploma in any university; and that, to the best of my knowledge and belief, it does not contain any material previously published or written by another person except where due reference is made in the text. Flinders University, September 2017 Maz Demosthenous 2 Acknowledgment I express my appreciation to the following people who provided me with invaluable support, guidance and insights to the completion of this thesis: Associate Professor Ben Wadham, my thesis supervisor, College of Education, Psychology and Social Work. Associate Professor Paul Kenny, my thesis supervisor, College of Business, Government and Law. Professor Carol Tilt, School of Commerce, University of South Australia 3 Table of Contents Declaration .............................................................................................................................................. 2 Acknowledgment .................................................................................................................................... 3 Abstract ................................................................................................................................................... 6 Chapter 1: Introduction .......................................................................................................................... 8 1.1 Background ..................................................................................................................................... 10 1.2 Research Context ............................................................................................................................ 13 1.2.1 Cypriot Culture and ethical decision making ............................................................................... 14 1.3 Justification for the study ............................................................................................................... 21 1.4 Research questions and objectives ................................................................................................. 23 1.4.1 Study objectives ........................................................................................................................... 23 1.5 Thesis structure ............................................................................................................................... 24 Chapter 2: Literature review ................................................................................................................. 26 2.1 Ethical reasoning of accounting and business students and Accountants ..................................... 26 2.2 Hypothesis development ................................................................................................................ 28 2.2.1 Education/ethics education ......................................................................................................... 29 2.2.2 Gender ......................................................................................................................................... 33 2.2.3 Age ............................................................................................................................................... 35 2.2.4 Work experience .......................................................................................................................... 37 2.3 Chapter Summary ........................................................................................................................... 38 Chapter 3: Models and Theories of ethical decision making (behaviour) ........................................... 39 3.1 Why do individuals behave unethically? ........................................................................................ 39 3.1.1 Unethical behaviour in Accounting .............................................................................................. 41 3.2 Accounting Code of conduct ........................................................................................................... 42 3.3 Theoretical Ethics ............................................................................................................................ 46 3.3.1 Deontological Ethics (Principled approach) ................................................................................. 46 3.3.2 Teleological Ethics (Consequential approach) ............................................................................. 48 3.4.1 Accountants and Deontological theory ....................................................................................... 53 3.4.2 Accountants and Virtue ethics ..................................................................................................... 53 3.4.3 Accountants and Teleological (Utilitarian) ethics ........................................................................ 55 3.4.4 Accountants and Stakeholder theory .......................................................................................... 56 3.4.5 Accountants and Legitimacy theory ............................................................................................ 58 3.5 Theoretical Framework for this study ............................................................................................. 59 4 3.6 Chapter Summary ........................................................................................................................... 60 Chapter 4: Methods .............................................................................................................................. 61 4.1.1 Sample .......................................................................................................................................... 62 4.1.2 Permissions .................................................................................................................................. 63 4.2 Cognitive Moral Development (CMD) Theory ................................................................................ 63 4.2.1 Kohlberg theory ........................................................................................................................... 64 4.2.1 Application of Kohlberg’s model .................................................................................................. 68 4.2.2 Limitations of Kohlberg’s theory of development ....................................................................... 68 4.2.3 Extension of Kohlberg theory – add a spiritual/religious stage ................................................... 69 4.2.4 Rest’s four component model of moral judgment ...................................................................... 70 4.3 The survey instrument – Defining Issues Test (DIT) ........................................................................ 72 4.3.1 The scoring of the DIT instrument ............................................................................................... 73 4.3.2 The validity and reliability of the DIT ........................................................................................... 75 4.4 Statistical analysis ........................................................................................................................... 76 4.5 Chapter Summary ........................................................................................................................... 77 Chapter 5 Analysis and presentation of findings .................................................................................. 78 5.1 Descriptive Results .......................................................................................................................... 78 5.2 Hypothesis Testing .......................................................................................................................... 80 5.2.1 Regression Modelling ................................................................................................................... 87 5.3 Limitations of the Analysis .............................................................................................................. 90 5.4 Chapter Summary ........................................................................................................................... 91 Chapter 6 Discussion and Conclusion ................................................................................................... 92 6.1 Summary of key findings ................................................................................................................. 92 6.2 Implications ..................................................................................................................................... 96 6.3 Limitations ....................................................................................................................................... 98 6.4 Future research ............................................................................................................................... 99 6.6 Conclusion ..................................................................................................................................... 105