When faced with an ethical dilemma, the first step for an accountant is to

You can prepare your students to judge whether something is ethical or unethical by introducing them to a decision-making process that requires thorough critical thinking. The 8-Step Decision-Making Model developed by Dr. Sandra Byrd does this by asking students to engage in a process that uncovers all key information needed to make an informed decision about whether something is ethical or unethical—a skill they’ll need for their future careers and when they sit for the CPA and CMA exams.

Below is a brief overview of Dr. Byrd’s decision-making model followed by a discussion about how to incorporate it into a class activity where students collaborate in groups to develop a skit about an ethical dilemma. 

8-Step Decision-Making Model

Step 1 – Determine the facts – What, Who, Where, When, How

Step 2 – List the significant stakeholders

Step 3 – Define the ethical issues

Step 4 – Identify major principle(s), rule(s), and/or value(s) involved in the issue

Step 5 – Specify the alternative actions available

Step 6 – Compare major principle(s), rule(s), and value(s) in Step 3 with alternative actions in Step 5 to see if there is a clear decision

Step 7 – Assess the consequences

Step 8 – Make your decision

Step 1 – Determine the facts – What, Who, Where, When, How

Step 1 is perhaps the most important step because students who recently entered the workforce can be tempted to determine whether something is ethical or not without considering all of the relevant information. After reviewing the facts, they may be able to decide immediately if the issue is ethical or not, or if they’re still unsure they should continue to Step 2.

Step 2 – List the significant stakeholders

Significant stakeholders could include:

• Your family
• Your employer
• Other employees
• Auditors
• Society in general
• Board of directors
• Existing and future stockholders/creditors

Step 3 – Define the ethical issues

Ethical issues involved could be a conflict of:

• Your integrity vs. your job security/reputation/loyalty to the firm
• Your company’s fiscal health vs. client’s/investor’s/union leader’s or society’s right to know
• Your obligation to management/creditors/government/stockholders/other employees/society

Step 4 – Identify major principle(s), rule(s), and/or value(s) involved in the issue

Major principles, rules, or values involved could include:

• Integrity
• Profit
• The Right to Know
• Quality
• Fairness
• Job Security
• Respect for Persons
• Loyalty
• Independence

Step 5 – Specify the alternative actions available

Step 5 is to determine what alternative actions are available. These might include:

• Talking to your supervisor
• Reporting directly to the internal auditor
• Reporting to some type of law enforcement
• Reporting to the SEC or other government agencies
• Ignore the issue

Step 6 – Compare major principle(s), rule(s), and value(s) in Step 3 with alternative actions in Step 5 to see if there is a clear decision

Step 6 helps determine whether one of the alternative actions should be taken once considering the information discovered in Step 3.

Step 7 – Assess the consequences

This step involves assessing the possible consequences to you and your company of each alternative action noted in Step 5.

Step 8 – Make your decision

Step 8 is when your students need to make the decision they believe best applies to the circumstance after going through the 8-step process.

In order to facilitate students thinking critically, you can have them collaborate with their classmates to create a skit about an ethical dilemma, and then ask the class to go through this 8-step process to determine whether the skit showed a situation that was ethical or unethical.

Ethics Skit Activity

To introduce this activity, you’ll divide your class into groups of 4-5 students (this works for in-person or virtual classes), and then hand or send out the instructions for the activity. Students will be tasked with writing a skit about an ethical dilemma followed by a performance of that skit for the class (or if you have a large class, you can assign groups to present to each other). The class uses the 8-Step Decision-Making Model to identify all of the information needed to determine whether the situation portrayed was ethical or unethical.

You’ll need to provide students with an example skit so they understand what they need to do. To view an example, watch the on-demand webinar hosted by Dr. Sandra Byrd.

Key Takeaways to Help Your Students Learn What is Ethical and Unethical

• You can help your students determine whether something is ethical or unethical by teaching them about the 8-Step Decision-Making Model.
• The model provides students the structure they need to evaluate all of the pertinent information when faced with an ethical dilemma.
• Working the decision-making model into an activity where students write and act-out skits about ethical situations makes the topic fun and engaging rather than dry.

If you’re interested in hearing more about the history of ethics in accounting, the 8-Step Decision-Making Model, and the Ethics Skit Activity mentioned above, view our on-demand webinar hosted by Dr. Sandra Byrd, CPA and PhD, is an emeritus professor of accounting at Missouri State University in Springfield, Missouri. Dr. Byrd taught undergraduate and graduate courses in accounting and taxation for over 40 years and has also taught numerous CPE courses focused on Ethics.

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