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The integration of ethics into accounting curricula is a critical challenge facing accounting educators. The ethical subject matter to be covered and the role of the professor in ethical debates in the classroom are important unresolved issues. In this paper, we explore teaching basic values as an integral part of ethics education. Concern about indoctrination of students is addressed and the consistency of values education with the goals of ethics education is examined. A role for ethics researchers in identifying and clarifying the basic values that define our profession is recommended, and suggestions for implementing values education in accounting ethics are provided. The importance of ethics education in accounting is now recognized by accounting practitioners and academicians (American Accounting Association, 1986; Arthur Andersen et al., 1989). The National Commission on Fraudulent Financial Reporting (Treadway Commission, 1987) recommended more extensive coverage of ethics in accounting education and the call for increased ethics coverage in accounting education is now being answered. Recently, accounting researchers have identified goals for ethics education in accounting (Loeb, 1988 and 1990), problems to be overcome (Langenderfer and Rockness, 1989; Loeb, 1988), and the need to assess the outcomes of teaching ethics in accounting courses (Loeb, 1991). The importance of 'sensitizing business students to the ethical dimensions of their profession' (Atkinson et al., 1987, p. 13) is generally accepted; however, the methods of teaching ethics and, in particular, the moral content of the courses remain unsettled issues. Ethics education in accounting is based on the premise that moral development can be enhanced through the educational process. Support for this premise is found in research in the development of moral judgment. For example, Rest (1979) stated that '(o)lder, educationally advanced students have higher moral judgment scores' (p. 247), and recent accounting research suggests 'that ethics training might affect the process by which accounting students and accountants resolve ethical dilemmas' (Hiltebeitel and Jones, 1991, p. 272). However, traditional accounting education does not contribute to the moral development of students to the extent of other college programs (Armstrong, 1987; Ponemon and Glazer, 1990) which suggests the need for additional efforts by accounting teachers and researchers. Progress has been made in developing teaching tools(1) to aid in the identification of ethical issues; however, difficult questions remain concerning the ethical subject matter to be covered and the role that the ethics instructor should play. These questions must be addressed to more carefully define the purpose and goals of ethics education and to assist in the implementation of the objectives of ethics education. The following questions suggest some of the more controversial issues: Is there a place in ethics education in accounting for teaching certain basic values? Is so, how might these values be identified? Should the instructor try to move the classroom discussion from the identification of ethical questions to teaching moral values that should direct the professional's behavior? Should the ethics instructor express his/her values in the classroom, or would this expression represent indoctrination of the students? These questions provide the motivation for this paper. We propose that teaching values is a necessary part of ethics education. However, teaching values is very different from indoctrination. Identification and exploration of basic values that should direct a professional's behavior is an essential part of ethics education and research. The instructor properly may -- indeed should -- express his/her values and should subject these to examination by the class. The following sections explore the goals of ethics education, values education, indoctrination, and the implementation issues of teaching values in the educational system. Values education Ethics can be defined as 'the philosophical study of morality, and, accordingly, morality is clearly identified as the characteristic subject matter of ethics' (Mappes, 1988, p. 35). A profession is 'a moral community of shared norms, values and definitions of appropriate behavior' (Frankel, 1989, pp. 110--111). Note that a moral concept is evident in both definitions. Consideration of a set of basic moral values is a necessary part of ethics research and education and impacts the goals of ethics education as specifically applied to the accounting profession. Goals in ethics education Goals important in all courses involving the teaching of ethics were proposed by the 'Report of The Hastings Center Project on the Teaching of Ethics' found in Callahan (1980) and summarized and adapted for accounting by Loeb (1988). These goals, listed in Table I, are very broad but provide a basis for consideration of issues related to teaching ethics in the classroom. Accounting matters must be related to moral issues (Loeb, 1988). In any situation, moral choices must be made. Students should become aware that situations will arise when one party may be harmed (Loeb, 1988, p. 320 citing Powers and Vogel, 1980) by the accounting choices made. As professionals, they will be faced with the task of avoiding or resolving these undesirable situations. From this observation flows the second goal of teaching ethics: that an individual recognizes that 'accounting issues have ethical implications' (Loeb, 1988, p. 322). Bok (1976) suggests that the inability to identify an ethical dilemma is the reason individuals behave immorally. Providing students an opportunity to discuss ethical situations encountered by professionals will enable students more readily to identify ethical predicaments. After identifying the ethical dilemma, students must determine how to react to and resolve the situation. This resolution will be based upon the individual's moral ideas. This leads to the third and fourth goals of accounting ethics education. Each individual must develop a 'sense of moral obligation' and skills to 'deal with ethical conflict' (Loeb, 1988, p. 322). These two goals can be developed within the classroom setting. By subjecting their ideas to the careful scrutiny of their peers, students will develop more objective ideas as to morally appropriate behavior. The moral obligation and ethical dilemma-solving skills honed in a classroom setting can then be applied to situations encountered in personal and professional worlds. However, this is not meant to imply that all ethical dilemmas can be resolved with a single solution. Rather, the situation may present various alternative solutions. This is also the case in accounting, which is reflected in the fifth goal of ethics education. Ethics education should help students 'learn to deal with the uncertainties of the accounting profession' (Loeb, 1988, p. 322). A given ethical dilemma may be resolved in a number of ways, depending upon the individuals involved and the context in which the situation arises. Students should recognize the uncertainties and incorporate these into their identification of the ethical dilemma and the evaluation of potential solutions. Loeb (1988) further suggests accounting education should ''set the stage for a change in ethical behavior'' (Loeb, 1988, p. 321). Additionally, it should provide an understanding and appreciation of the history and content of accounting ethics and its relationship to the overall field of ethics (Loeb, 1988). Moral development The goals of ethics education are premised on moral TABULAR DATA OMITTED issues, but as Shenkir (1990) emphasized, 'ethics education should recognize that different students will be operating at different stages of moral maturity' (p. 31). Six stages of moral maturity were defined by Lawrence Kohlberg and will impact an individual's 'sense of moral obligation' and ability to 'ideal with ethical conflict' (Loeb, 1988, p. 322). Individuals advance through the stages of moral reasoning at various rates of speed although the stages occur in an invariant sequence and are universal to all. Additionally, individuals may reach moral maturity at any level. The six stages summarized in Table II represent 'structured wholes' (Kohlberg, 1981, p.120), that is, an individual does not reason at different stages for specific situations but reasons at one stage for all situations. Researchers have argued that educators have a responsibility to contribute to the moral development of their students (see, e.g., Bok, 1976; Hitlebeitel and Jones, 1991). Since the moral development of university students is never complete (Langenderfer and Rockness, 1989) the identification and espousal of basic values should enhance the moral development of accounting professionals. Values Expectations that educational systems should teach values are often met with resistance from educators (Nazario, 1990, p. B1). The reluctance of educators to teach values is, in part, due to the uncertainty as to what, or whose values, if any, should be taught. Values are personal to each individual. However, values presented to accounting students should reflect the ideals and principles intrinsically valuable to society and the profession. Principles intrinsically valuable to society might include honesty, civility, and diligence, and professional principles might include fairness, equity and efficiency. The societal principles may be derived from current laws and regulations. Additionally, doctrine espoused by religious institutions with respect to social justice and human rights can provide basic values. Professional values can be identified from the auditing standards, the Professional Code of Conduct, and the Quality Review standards. While some of the professional standards are general in nature, others are more conduct specific. For example, the auditing standards provide a basic guide for performing audits. Additionally, principles of the Professional Code of Conduct provide general guidance with respect to professional responsibilities, the public interest, integrity, objectivity and independence, due care, and services provided. Other 'values' can be found in the Statements on Auditing Standards which provide specific guidance on the auditor's work. The rules, interpretations, and rulings of the Code of Professional Conduct provide guidance relating to the scope and application of professional behavior. Statements on Quality Control Standards and interpretations thereof provide professionals with a system of quality control which provides reasonable assurance of meeting their 'responsibility to provide professional services that conform with professional standards' (AICPA, 1979, p. 17061). Societal and professional values may be applied to ethics education through a model of ethical behavior, such as that presented by Rest (1986). A situation can be evaluated against established values to identify potential problems. The problems can then be judged to determine a moral resolution. Again, alternate resolutions can be identified from and evaluated against established societal and professional values. The individual should then strive to place moral values above any conflicting personal values when following through with the resolution of the dilemma. Certain values may not yet be clearly defined by the profession. Through ethics research, vague -- but fundamental -- concepts such as fairness and equity can be clarified. Values clarification through ethics research Integration of ethics research into the accounting curriculum can contribute to the overall ethics education. The identification of basic values and the subjection of those values to critical analysis and rational methods is a role for accounting researchers. Part of the reluctance on the part of educators to adopt and support a moral view may be due to a 'lack ... of conceptual clarity' (Wilson, 1986, p. 94). However, conceptual clarity can be gained through research. Reasoned criticism is essential for ethical development, and it is in this area that researchers can contribute. To overcome the reluctance of accounting researchers to deal with soft issues such as equity (Lev, 1988) or fairness, we must first acknowledge that what we have typically viewed as hard issues, such as efficiency, are themselves value-laden. Thurow provides some insights: One often hears that although there are economic statements to be made about efficiency, there are not economic statements to be made about equity, only personal prejudices. In fact, equity statements stand on the same foundation as efficiency statements. Neither is value free. Both depend upon an underlying set of discussable value judgments. Once these value judgments have been made, there are technical studies to be done on economic equity just as there are technical studies to be done on economic efficiency (Thurow, 1975, p. 24). Efficiency is not often recognized as a value because it is an almost universally accepted value. Recognition that topics such as efficiency and equity are both value-laden concepts is important in overcoming researchers' reluctance in dealing with issues such as fairness and duty. Basic research exploring issues such as fairness can provide insights for the critical analysis of values central to accounting. A limited amount of such research appears in the accounting literature. For example, Young and Johnson (1989), Williams (1987), and Ijiri (1983) explored the issue of fairness in financial reporting, and Lev (1988) suggested that equity issues should be included in the accounting research agenda. Insights from these discourses could also prove useful in dealing with basic policy issues as well as providing useful education materials. For example, disclosure issues on which basic fairness discourses would provide insights are: 'Is information asymmetry inherently unfair?' 'Is it appropriate, under principles of equity and efficiency, to strive for information parity?' These research efforts could provide moral subject matter for ethics discussions in accounting. The opportunity exists for ethics research that identifies various moral positions and examines the reasonableness of each position. The possibility of the espousal of moral values in the classroom and the critical and reasoned analysis of these values suggest important complementary roles for educators and researchers. The role of the accounting educator in teaching basic values is a controversial issue -- as is the teaching of values at all levels of education. Educators and others are concerned about the potential for the indoctrination of students. Indoctrination There is disagreement among ethicists as to what is indoctrination: Is the teaching of any value, no matter how widely accepted, indoctrination? Does it depend on the manner in which the values are taught? Does the aim of the person distinguish the educator from the indoctrinator? (Macklin, 1980, pp. 85-86). Rosen and Caplan (1980) suggest that indoctrination occurs when one impresses upon students a particular viewpoint without allowing the students to subject the idea to objective reasoning. While the resolution of what constitutes indoctrination is beyond the scope of this paper, two themes in the indoctrination debate are important. First, 'if we are to avoid indoctrination ... the beliefs we teach must be rational' (Flew, 1972, p. 68 citing John Wilson) and second, 'we must strive to develop individuals capable of developing ideas on ethical situations, which ideas may differ from our own' (Flew, 1972, p. 69 citing R. M. Hare). In other words, the professor should strive to prepare students 'to reason and reach decisions about moral problems and normative ethical theories without the aid of the teacher' (Rosen and Caplan, p. 21). One objection to educators trying to teach certain basic values lies 'in the prospect of bad teachers doing inappropriate things in the classroom' (Macklin, 1980, p. 96). However, this prospect should not be a basis for ruling out the espousal of values by the educator. Indeed, we suggest that the educator's expression of his/her values is inevitable. As Shenkir (1990) states, 'faculty must be conscious ... that the attitudes and value orientation they bring to the classroom and to the subjects they are teaching are going to be absorbed to some extent by students' (p. 32). In other words, values education occurs even when it is not intended. One's silence on controversial issues may inadvertently express a value not held by the educator. The successful ethics educator should train students to be in the position of evaluating the educator's own moral arguments (Macklin, 1980). That is, all moral beliefs, both the students' and the professor's, must be subjected to rational analysis and criticism. Loeb (1991, p. 78) notes that 'the teaching of accounting ethics should be congruent with the curriculum goals of an accounting program and not be an attempt at indoctrinating students in a particular type of morality.' The educator must recognize that a reasoned view precisely opposite to that held by the educator is also a correct answer. In this way, the professor can assure that education, rather than indoctrination, occurs. Moreover, by assessing the 'outcomes' of the accounting ethics education, 'indoctrination is kept at a minimum' (Loeb, 1991, p. 78). The role of the educator can be defined by the notion of 'dispensability'. Loeb (1988) underscores the concern of Callahan (1980) who questioned the professor as a role model (p. 70). Loeb (1988) noted that 'it would be difficult for most teachers to serve in such a capacity' (p. 321). Rather than attempting to be a 'role model,' the professor should express his/her values and subject them to the same analysis as those expressed by others. Some values can and should be rejected through reasoned analysis which again underscores the complementarity of teaching and research in ethics education. Such analysis is consistent with the goals of ethics education. Pluralism and teaching values As values may be derived from societal principles (e.g., from laws, regulations or religious institutions), an obvious concern in examining values arises from the pluralistic nature of our society. Pluralism can be defined as 'the array of moral and political values in our culture' (Macklin, 1980, p. 81). In our pluralistic society, whether it is acceptable to impose one person's values on another is, of course, a legitimate concern (Wilson, 1986). In addition to defining the array of values in our society, pluralism may be viewed normatively, 'expressing a positive commitment to the preservation of these diverse values' (Macklin, 1980, p. 81). Because of pluralism, relativism often arises in discussions of teaching ethics. Relativism can be defined as: a cluster of thought and feelings, often incoherent but immensely powerful in education (and elsewhere), which emerge in remarks like 'There's no such thing as objective truth,' 'It's all a matter of belief,' 'Values and knowledge are just social products,' 'What right have we to impose our ideas on pupils?' and the like (Wilson, 1986, p. 89). As a result of concerns about indoctrination and relativism, educators may conclude that teaching values in the classroom is unacceptable. However, the goals of ethics education suggest that teaching values is possible, indeed desirable, and that it is possible without indoctrinating the students. We next explore some implementation issues. Implementation issues Behavior is changed by factors other than formal ethics courses. However, the classroom setting should provide the impetus for changing behavior, which will continue into the students' professional careers. By providing an atmosphere conducive to change, students will begin to question their current behavior, consider alternative behaviors, and modify their acts to an ethically appropriate behavior. Gaining an understanding of the development of accounting ethics will also aid in the students' ethical development. By reviewing past events and the circumstances surrounding those events, one can identify predicaments which were previously faced by accounting professionals. The manner in which the problems were resolved can be examined and comparisons can be made between past and current events. Comparisons can also be made between accounting and other fields to identify progress that has been made and areas for future growth. The development of such an understanding will also aid in the students' ethical dilemma identification and behavior modification. Values education as described earlier is consistent with these goals for accounting ethics education. Values education allows students to reason, to challenge moral arguments, and to reach decisions about moral problems. To enhance the students' 'sense of moral development' (Loeb, 1988, p. 322) a classroom environment must exist which encourages individuals (students and professor) to share ideas and to subject these ideas to critical evaluation. Such a classroom environment may be difficult to establish but it is critical to the success of values education. To promote ethics education, accounting programs need to allow for a more interdisciplinary approach and professional socialization. In current programs, the emphasis tends to be on technical matters -- the application and understanding of accounting and auditing standards and tax and business law. The student is not required to make connections between these technical aspects and the moral judgments which occur in business. However, faculty should assist students by challenging their ideas so that students achieve a more critical perspective (Wilcox, 1988). Other social-science viewpoints should be included in the curriculum (DeGeorge, 1987) to introduce students to basic philosophical values. Concepts from these courses can then be utilized to recognize issues having ethical conflicts or dilemmas. When presenting and discussing business issues, students should be required to look beyond accounting, management, or marketing theories to identify similarities and differences between business concepts and those of the social sciences which impact the identification, evaluation, and resolution of ethical dilemmas. Ideas of what is intrinsically good or evil must be considered. In order to reach the highest level of moral development, individuals must have 'knowledge of underlying principles of philosophical and religious ethics ...' and 'ethics educators can provide these persons with knowledge of the major traditions of philosophical ethics, including those based on concepts of individual rights, moral duty, justice, and social utility' (Shenkir, 1990, p. 32). Such knowledge would allow students to arrive at more ethically sound decisions. Mayer-Sommer and Loeb (1981) encourage the creation of an academic atmosphere conducive to developing the students' beliefs and attitudes which last into their professional careers. An environment should be provided for the 'professional socialization' (Mayer-Sommer and Loeb, 1981) of the students. That is, students should be treated as young professionals during their accounting education. This will enable students to develop a sense of what to expect and how to act in the professional workplace. Values education is an essential part of students' professional socialization. The reasoned analysis of the values that define our profession will require changes in presentation methods, faculty-student relations, and student evaluations. Presentation methods Lecture and problem-solving methods should be supplemented with open and objective discussions regarding the morality of alternative decisions. Invited faculty and professionals should involve the class in exploring and challenging current ethical issues in the business environment (George, 1988). Working in groups of three or four, students should be encouraged to discuss their individual perspectives of a situation, identify ideas for managing ethical dilemmas, and critically evaluate their own and others' ideas based upon social-science and business theories. An analysis of conflicts from a 'moral point of view' (Callahan, 1980, p. 64) and the reduction of disagreement require classroom debate. In such a debate, the values of the educator should be expressed, but most importantly, must be subjected to analysis by the students to avoid indoctrination. Faculty-student relations Throughout their college experience, students should be treated as 'colleagues' by the faculty. Shenkir (1990) argues that, in addition to 'instructing students in a framework for moral development,' education should conduct 'learning in a climate that fosters honor and trust between fellow students and between faculty and students' (p. 30). Obviously, students are not prepared to act as peers to faculty. However, they can function as 'junior colleagues' (Mayer-Sommer and Loeb, 1981, p. 130), that is, as staff accountants in public accounting firm. In this role, students will be encouraged to evaluate and challenge faculty ideas. By allowing for the exchange of ideas, the educator will aid in developing the student's ability to analyze critically and evaluate moral ideas and to interact with faculty (Flew, 1972, p. 69, citing R. M. Hare). By being held to the level of performance of a junior colleague, students will begin to see themselves as such and act accordingly. Additionally, students should be acquainted with the professional organizations and the forums available in which to exchange ideas. This requires faculty to be aware of the activities of professional organizations. Student involvement can occur when faculty invite students to attend meetings, conferences, and seminars of their professional organizations. Ideas can also be exchanged through published articles in professional practice journals. Introducing students to these professional forums during their academic careers will promote their continuing interest in the subject of values education upon their entering the profession. Student evaluation Rather than requiring the demonstration of an ability to calculate quantitative solutions, a student should be evaluated on his/her ability to analyze a situation critically, identify ethical dilemmas, consider alternative courses of action, and present a logical solution, supported by a thorough, ethical evaluation. No one answer may exist to a given ethical problem and the student should not be evaluated on whether s/he selects the right answer as predetermined by the instructor. By requiring the student to assimilate information from various fields of study, s/he will be better prepared for making ethical decisions in the business environment. Conclusion Teaching values in accounting is consistent with the goals of ethics education. Furthermore, indoctrination is not an inevitable outcome of teaching values. Ethics is now viewed by many as a critical component of accounting education. Consequently, it is important to make sure that the integration of ethics into the accounting curriculum actually contributes to students' moral development. The first step is to identify those values which should be introduced and how best to communicate this information. The exploration of basic values that define a profession provides a rich agenda for ethics research. The ethical development of accounting professionals is an evolutionary process, but is a matter which must be addressed for accountants to continue as professionals. Academicians should be asked to present information to students in such a way as to allow students to evaluate ethical situations and potential solutions critically. This responsibility may require that academicians enhance their experiences and skills with various ethical theories. Additionally, presentation and evaluation methods must be reviewed and revised to allow for more critical analyses of the values that define our profession. Note 1 See, for example, a joint effort by the American Accounting Association and Arthur Andersen & Co. in the development of an ethics video cassette ('Ethics in Accounting', Tape No. 1296, copyright 1989, Arthur Andersen & Co.) and the case book prepared by the American Accounting Association: 1990, Ethics in the Accounting Curriculum: Cases & Readings, edited by William W. May. References American Accounting Association, Committee on the Future Structure, Content, and Scope of Accounting Education (The Bedford Committee): 1986, 'Future Accounting Education: Preparing for the Expanding Profession', Issues in Accounting Education 1, pp. 168-195. American Institute of Certified Public Accountants: 1979, 'Statements on Quality Control Standards', AICPA Professional Standards 2, p. 17061. Armstrong, M. B.: 1987, 'Moral Development and Accounting Education', Journal of Accounting Education 5, pp. 27-43. Arthur Andersen & Co., Arthur Young, Coopers & Lybrand, Deloitte Haskins & Sells, Ernst & Whinney, Peat Marwick Main & Co., Price Waterhouse and Touche Ross: 1989, Perspectives on Education: Capabilities for Success in the Accounting Profession, pp. 1-15. Atkinson, G., J. Buckeye and A. Trostel: 1987, 'Incorporating Ethics into the Business Curriculum', Teaching Philosophy 10, pp. 13-21. Bok, D. C.: 1976, 'Can Ethics Be Taught?', Change, pp. 26-30. Callahan, D.: 1980, 'Goals in the Teaching of Ethics', in D. Callahan and S. Bok (eds.), Ethics Teaching in Higher Education (Plenum Press, New York), pp. 61-80. DeGeorge, R. T.: 1987, 'The Status of Business Ethics: Past and Future', Journal of Business Ethics 7, pp. 201-211. Flew, A.: 1972, 'Indoctrination and Doctrines', Concepts of Indoctrination (Routledge & Kegan Paul, London), pp. 67-92. Frankel, M. S.: 1989, 'Professional Codes: Why, How and with What Impact?', Journal of Business Ethics 8, pp. 109-115. George, R. J.: 1988, 'The Challenge of Preparing Ethically Responsible Managers: Closing the Rhetoric-Reality Gap', Journal of Business Ethics 6, pp. 715-720. Hitlebeitel, K. M. and S. K. Jones: 1991, 'Initial Evidence on the Impact of Integrating Ethics into Accounting Education', Issues in Accounting Education 6, pp. 262-275. Ijiri, Y.: 1983, 'On the Accountability-Based Conceptual Framework of Accounting', Journal of Accounting and Public Policy 2, pp. 75-81. Kohlberg, L.: 1981, The Philosophy of Moral Development, Moral Stages and the Elder of Justice (Harper & Row Publishers, Inc., San Francisco), pp. 17-19. Langenderfer, H. Q. and J. W. Rockness: 1989, 'Integrating Ethics into the Accounting Curriculum: Issues, Problems and Solutions', Issues in Accounting Education 4, pp. 58-69. Lev, B.: 1988, 'Toward a Theory of Equitable and Efficient Accounting Policy', The Accounting Review 63, pp. 1-22. Loeb, S. E.: 1988, 'Teaching Students Accounting Ethics: Some Crucial Issues', Issues in Accounting Education 3, pp. 316-329. Loeb, S. E.: 1990, 'Whistleblowiug and Accounting Education', Issues in Accounting Education 5, pp. 281-294. Loeb, S. E.: 1991, 'The Evaluation of 'Outcomes' of Accounting Ethics Education', Journal of Business Ethics 10, pp. 77-84. Macklin, R.: 1980, 'Problems in Teaching of Ethics: Pluralism and Indoctrination', Ethics in Higher Education (Plenum Press, New York), pp. 61-101. Mappes, T. A.: 1988, 'What is Personal Ethics and Should We be Teaching More of It?', Teaching Philosophy 11, pp. 33-40. Mayer-Sommer, A. P. and S. E. Loeb: 1981, 'Fostering More Successful Professional Socialization Among Accounting Students', The Accounting Review 56, pp. 125-136. National Commission on Fraudulent Financial Reporting (Treadway Commission): 1987, Report of the National Commission on Fraudulent Financial Reporting. Nazario, S. L.: 1990 (Apr. 6), 'Schoolteachers Say It's Wrongheaded to Try to Teach Students What's Right', The Wall Street Journal, pp. B1, B8. Ponemon, L. and A. Glazer: 1990, 'Accounting Education and Ethical Development: The Influence of Liberal Learning on Students and Alumni in Accounting Practice', Issues in Accounting Education 5, pp. 195-208. Powers, C. W. and D. Vogel: 1980, Ethics in the Education of Business Managers, The Teaching of Ethics V (Hastings-on-Hudson, New York: The Hastings Center, Institute of Society, Ethics and the Life Sciences). Rest, J. R.: 1979, Development in Judging Moral Issues (University of Minnesota Press, Minneapolis), p. 247. Rest, J. R.: 1986, Moral Development: Advances in Research and Theory (Praeger Publishers, New York). Rosen, B. and A. L. Caplan: 1980, Ethics in the Undergraduate Curriculum, The Teaching of Ethics IX (Hastings-on-Hudson, New York: Institute of Society, Ethics, and the Life Sciences). Shenkir, W. G.: 1990, 'A Perspective from Education: Business Ethics', Management Accounting 71, pp. 30-33. Thurow, L. C.: 1975, Generating Inequality: Mechanisms of Distribution in the U.S. Economy (Basic Books, New York), p. 24. Wilcox, R. T.: 1988, 'Indoctrination is Not a Four-Letter Word', The Clearing House 61, pp. 249-252. Williams, P. F.: 1987, 'The Legitimate Concern with Fairness', Accounting, Organizations and Society 12, pp. 169-189. Wilson, J.: 1986, 'Relativism and Teaching', Journal of Philosophy of Education 20, pp. 89-96. Young, J. and O. Johnson: 1989, 'On the Logical Foundation for Self-Regulation: Rules, Corporations, and Financial Reporting', Research in Accounting Regulation, Vol. 3 (JAI Press, Inc., Greenwich, Connecticut), pp. 133-151. H. Fenwick Huss is Associate Professor of Accounting at Georgia State University. His recent research focuses on ethical and regulatory issues in financial reporting. He has presented papers and served as a panel member in sessions on ethics at regional American Accounting Association conferences. Denise M. Patterson is a doctoral candidate at Georgia State University. Her research interests are in the areas of auditing and the impact of ethics on the role of the auditor. Denise has audit experience with an international accounting firm. TABLE I Goals of accounting ethics education* 1. Relate accounting education to moral issues. 2. Recognize issues in accounting that have ethical implications. 3. Develop 'a sense of moral obligation' or responsibility. 4. Develop the abilities needed to deal with ethical conflicts or dilemmas. 5. Learn to deal with the uncertainties of the accounting profession. 6. 'Set the stage for' a change in ethical behavior. 7. Appreciate and understand the history and composition of all aspects of accounting ethics and their relationship to the general field of ethics. * Loeb (1988, p. 322).

The establishment of optimal sampling size relative to auditing compliance-testing is examined using the same audit populations used in 1982 in the research performed by Godfrey and Andrews. Optimal sampling solutions are determined for both finite and infinite samples, using a formal (rather than the popularly accepted informal) Bayesian decision-theoretic approach. The research suggests that auditors should use formal, as well as informal, Bayesian methods when determining number of tests to run prior to formulating an opinion as to the company's compliance with its stated internal control procedures.