The Science of Moral Codes and AICPA Ethics

Gusto Editors

What is the difference between ethics and morals? Are ethics and morals the same? Just by asking yourself these questions, you’re cultivating your tendency to maintain high standards of integrity.

To help you reflect on the CPA professional values, we partnered with CPA Academy to bring you a webinar titled “Painless December Ethics CPE.” The webinar was hosted by Caleb Newquist, Gusto’s Editor-at-Large, and Greg Kyte, founder of Comedy CPE

Greg Kyte is a unique voice in the world of accounting. He’s been a stand-up comedian for over a decade and has shared the stage with many notable comedians. In merging comedy with accounting, he captures his audience’s attention and helps them to laugh and learn at the same time. Greg is known for his witty and ironic insights that provide much-needed perspective on the industry.

In this article, Caleb and Greg cover what behavioral science tells about ethics and why you don’t even need to believe in a moral code for it to affect your behavior.

What social science tells us about ethics and morals

Group of coworkers during a meeting in an office.

Greg demonstrated once again that people’s behavior depends on social norms. He referenced a study from Dan Ariely, author of The Honest Truth: How We Lie to Everyone—Especially Ourselves revealed how people’s behavior depends on social norms. Dan and his colleagues at The University of California at Los Angeles designed the study to find what drives honest and dishonest behavior. In the experiment, they gave participants a math test and modified conditions to see how many answers people got right or claimed to get right.

“[The proctor] says, ‘I’m going to pay you for every right answer.’ … It’s set up like a college testing center. You come in; you take your test, you hand it to a proctor, [and] the proctor grades it. And you get a buck or whatever for every right answer you have.”

– Greg Kyte

The researchers then tweaked the experiment to see how it would affect performance. First, they increased the amount of money they awarded for correct answers, which saw little change. What did affect performance, however, was giving people the opportunity to cheat. While the control group wasn’t given this opportunity, the test group had a new set of instructions. 

“They said, ‘You’re going to grade your own paper, and not only are you going to grade your own paper, you’re going to shred all of your paperwork in a shredder. And then [you’re going to] go to the proctor and tell him how many right answers you got on this quiz, and they will pay you accordingly.’”

– Greg Kyte

Unsurprisingly, when people had the opportunity to lie about their answers, the average score jumped from 7 to 12. In other words, everyone cheated, but no one claimed a perfect score. According to Greg, this proves that people are generally honest. While people are comfortable stretching the truth, most people don’t feel great about extremes.

“This goes back to ‘Are people generally honest or dishonest?’ and it sort of depends on what you mean by generally honest. … A lot of people cheated, because the average score went up to 12, [but] nobody ever claimed 20 out of 20.”

– Greg Kyte

Next, the researchers asked people to read and sign the school’s “Code of Conduct,” designed for the experiment. Amazingly, no one cheated after signing it. The results indicate that accountability is a powerful motivating force for behavior. To take this concept even further, the researchers’ next experiment was to ask people to write down the Ten Commandments before taking the test. 

“Before the test, he had everybody brainstorm as many of the Ten Commandments as they could. [He was like], ‘Here’s a sheet of paper. Just write down as many as you can.’ … Nobody got all ten, and there were some people who couldn’t get any of them. … Again, brainstorming the Ten Commandments and then taking the test … resulted in absolutely eliminating cheating. The average went back to seven.”

– Greg Kyte

Even more fascinating was that it still eliminated cheating when the researchers asked a group of self-described atheists to write down the Ten Commandments before taking the test. 

Businesswoman writing notes while sitting at table in class with group of students.

Why? Did atheists have a change of heart once they started thinking about the rules? Were they unconsciously influenced by them? Greg argued that it boils down to self-perception. Just like people want other people to see them as honest, they want to see themselves as honest. 

By reviewing a moral code, participants had ethics on their minds. If they proceeded to cheat, they would have to view themselves as dishonest. Dan Ariely pointed this truth out in The Honest Truth: How We Lie to Everyone—Especially Ourselves. While ethics training seminars and lectures do little to sway bad behavior, reminders of moral codes do, especially when they are presented to someone at the moment they could act unethically.

According to Ariely, we’re all driven by conflicting forces. One part of us wants to cheat, gain an advantage over others, and obtain as much glory and money as we can. The other part of us needs to see ourselves as honest and honorable. Since there’s always a battle, there’s no guarantee that we’ll go in one way or another. Unfortunately, many people let their need for power win over their need for integrity. Further, it’s small infractions by otherwise good people that can cause the majority of the damage. 

What are moral codes, and how do they support CPA professional values?

If everybody lies and cheats—even just a little—what does that mean for CPAs? Do accountants get a pass for minor slipups given that they, like everyone else, are only generally honest or dishonest? 

Of course, the answer is no—your clients and your team expect and deserve your complete honesty. Integrity is a core pillar in the accounting profession. The American Institute of Certified Professional Accountants  (AICPA) states in their Code of Professional Conduct that CPAs are to “perform professional duties with the highest sense of integrity.” 

So what are the ethical responsibilities of accountants? CPEs must be honest, objective, and always put their client’s best interests in mind. Greg and Caleb agreed that the AICPA, along with everyone else in the field, expects absolute integrity from CPAs:

“The expectation is there. Now, you flip that around and go, ‘We’re human’. So are we going to be morally perfect? … [Think about asset misappropriation]. If you write a note to your wife, husband, partner, or significant other with a pen from work, on a piece of paper you brought from home. Well, you just misappropriated the ink from the work pen. Are we going to be perfect? No, we’re not. But the expectation is absolutely [there].”

– Greg Kyte

In reflecting on moral perfection, Greg brought up an important point. While it’s unlikely that people can go through life without making moral mistakes, the simple process of reflecting on that idea can help drive more ethical behavior.

“The nice thing about saying, ‘Are we expected to be morally perfect?’ [is that] it forces people to [reflect about what ‘morally perfect’  means.  You can kind of go, ‘Gosh, I can’t be [perfect], but I sure can try my [hardest] to be [perfect].”

Greg Kyte

Studying and reflecting on moral codes can have a powerful impact on how we perceive our integrity. Greg described the experience of taking a business school ethics class and how it impacted him personally more than he’d expected.

Business people attending a seminar in board room, speaker in front.

“I re-evaluated everything that I’d done in my whole life. I was making amends like an alcoholic on step nine. I was [thinking about anyone] I’d ever slighted. I was like, ‘Hey man; this probably wasn’t cool. So how can I make this right?’ But it was because every day for five weeks I was looking at these Harvard Business Review cases and having this honest reflection.

– Greg Kyte

To apply Greg’s advice to your own professional life, make moral codes a part of company culture. Review company codes yourself, read case studies, and integrate literature around ethics throughout the company. 

“[Do] whatever you can do to reflect on a moral code in an honest way. Grab an HBR ethics book  … and read a case once a week. If you’re at a firm, maybe assign that as reading and discussion for a staff meeting. It might feel weird, but it’s something that you can do to increase your ethical behavior.”

– Greg Kyte

Keeping moral codes top of mind at work may be far more effective than lectures about ethics.

Learn more about the science of moral codes

Moral codes have a powerful effect on us, even if we don’t necessarily agree with everything they say. As a CPA, you need to maintain exceptional standards of integrity. By simply thinking about morals and ethics, you’re more likely to do so. You can reinforce this at your firm by assigning it in training and bringing it up in discussion. 

Did you enjoy this article? You can learn more about moral codes by watching the full webinar. Alternatively, check out our other articles based on the same episode: Navigating the Space Between Honesty and Dishonesty in CPA Ethics, CPA Ethics & The Ultimatum Game, The Sunglass Experiment and How It Applies to CPE Fraud, What Is Ego Depletion and How to Replenish It as a CPA and How to Build an Ethical Culture at Your CPA Firm.

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