Utilising continued professional development of ethics ...

Utilising continued professional development of

ethics amongst prospective chartered accountants

by

DR GIDEON ELS

THESIS

submitted in fulfilment of the requirements for the degree

DOCTOR COMMERCII

in

AUDITING

in the

FACULTY OF ECONOMIC AND FINANCIAL SCIENCES

at the

UNIVERSITY OF JOHANNESBURG

Supervisor: Professor Thea L Voogt Co-supervisor: Professor Ben Marx

June 2007

i

PREFACE

Soli Deo Gloria

Completing a doctoral thesis may be seen as a ‘group’ effort. Allow me to thank the

following people and institutions for their enormous contribution:

my loving family for their inspiration and support;

my head of department, colleague and friend, Professor Henco van Schalkwyk,

for allowing me the time and opportunity to complete this study;

my supervisors, Professors Thea Voogt and Ben Marx, for their insight and

leadership;

my colleague, Professor Craig MacKenzie, for applying his professional editing

skills to this manuscript;

my friend, Carin Roux, and colleague, Professor Liz Greyling, for assisting with

language issues;

the helpful staff of the Statistical Consultation Service (STATKON) at the

University of Johannesburg but specially Dr Riëtte Eiselen, Nelis Potgieter and

Adam Martin;

the various research assistants who helped me over the years but especially

Henk Wassermann and Ryno Booyens;

Mandi Olivier from the South African Institute of Chartered Accountants (SAICA);

and

Bernard Agulhas from the Independent Regulatory Board for Auditors (IRBA).

The successful completion of this study was only possible with the help of our Lord

God.

“Research is creating new knowledge.”

Neil Armstrong Johannesburg

June 2007

PREFACE ii

To Petro and Carol

PREFACE iii

PLEASE TAKE NOTE …

Although the name of the Rand Afrikaans University changed to

that of the University of Johannesburg in 2005 after a merger

with the Technikon Witwatersrand, mention will only be made

to Rand Afrikaans University or RAU throughout this study.

With the signing of the new Auditing Profession Act, the

Independent Regulatory Board for Auditors became the

successor body to the Public Accountants’ and Auditors’ Board

as of 1 April 2006. As the scope of this study only extends to

31 March 2006, mention throughout this study will be made to

the Public Accountants’ and Auditors’ Board or PAAB.

iv

ABSTRACT

It is widely accepted that accounting education aims to produce competent professional

accountants, who are capable of making a positive contribution to the profession and

the society in which they work. The provision of a basis of ethical values should

therefore be viewed as an important aspect of professional accountants’ education and

training.

In the face of increasing changes encountered by accountants, it becomes essential

that they develop and maintain an attitude of learning to learn (i.e. Continuous

Professional Development or CPD).

In current times, an education programme for Chartered Accountants (CAs) needs to

transcend the traditional approach that emphasised ‘transfer of knowledge’, with

learning defined and measured strictly in terms of knowledge of principles, standards,

concepts, facts and procedures at a particular time.

This study aims to investigate the utilisation of the CPD of ethics among prospective

CAs by analysing and statistically interpreting the perceptions and attitudes of a group

of undergraduate students at a South African higher education institution, by means of

an empirical survey.

The objectives of this study are to:

(i) demarcate the CA and his/her profession by studying undergraduate students’

perceptions;

(ii) determine undergraduate students’ perceptions of CPD, life-long learning (LLL)

and ethics, within the framework of a CA and his/her undergraduate education;

(iii) investigate the perceived core values within the CA profession; and

(iv) analyse specific aspects of the education and training of prospective CAs at the

University of Johannesburg (UJ).

ABSTRACT v

Keywords:

Chartered accountants; continuous professional development; life-long learning; ethics;

ethics education.

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vi

OPSOMMING

TITEL : Die aanwending van die voortgesette professionele

ontwikkeling van etiek onder voornemende geoktrooieerde

rekenmeesters.

OUTEUR : Dr Gideon Els

PROMOTOR : Prof Thea L Voogt

MEDE-PROMOTOR : Prof Ben Marx

GRAAD : Doctor Commercii

STUDIEVELD: : Ouditkunde

DEPARTEMENT : Rekeningkunde

FAKULTEIT : Ekonomiese en Finansiële Wetenskappe

UNIVERSITEIT : Universiteit van Johannesburg

TAAL : Engels

Rekeningkundedosente verbonde aan hoëronderwysinstellings word van verwag om op

verskeie veranderings wat wêreldwyd deur die rekeningkundige professie in die gesig

gestaar word, te reageer. Hul onderrig behoort dus by leerders ’n verskeidenheid

strategieë wat leer sal bevorder, te ontwikkel.

Gedurende die onderrig van voornemende Geoktrooieerde Rekenmeesters (GRe) (dus

op voorgraadse vlak), behoort onderrigmetodes nie slegs daarop te fokus om leerders

met ’n noodsaaklike basiese grondslag van kennis, vaardighede, professionele waardes

en etiek vir professionele bekwaamheid toe te rus nie. Onderrigmetodes behoort ook

die nodige leerinstrumente en professionele ontwikkeling ná kwalifisering in te sluit.

’n Onderbou in Lewenslange Leer (LL) behoort dus gelê te word, ten einde leerders in

staat te stel om:

’n begeerte en vermoë te verwerf om lewenslank te leer;

by ’n veranderende omgewing aan te pas;

nuwe kennis en vaardighede te verwerf; en

OPSOMMING vii

verantwoordelikheid vir persoonlike prestasie te neem.

Voortgesette Professionele Ontwikkeling (VPO) en Lewenslange Leer (LL) word

normaalweg as ’n aspek ná kwalifisering beskou. Die aanvanklike voortgesette

professionele ontwikkeling en lewenslange leer van etiek behoort egter bevorder te

word, indien GRe alreeds tydens hul voorgraadse hoëronderrig in hierdie proses geskool

word.

Hierdie studie het die bestudering van die persepsies en houdings van ’n groep

voorgraadse rekeningkundestudente aan ’n Suid-Afrikaanse hoëronderwysinstelling,

rakende die voortgesette professionele ontwikkeling van etiek ten doel. As deel van die

empiriese studie word van ’n vraelys wat statisties ontleed en vertolk word, gebruik

gemaak.

Die doelwitte van die studie is:

(i) die posisionering van die GR en sy/haar professie met behulp van voorgraadse

studente se persepsies;

(ii) die bepaling van voorgraadse studente se persepsies van voortgesette

professionele ontwikkeling, lewenslange leer en etiek binne die raamwerk van ’n

GR en sy/haar voorgraadse onderrig;

(iii) ’n ondersoek na bepaalde kernwaardes binne die GR-professie; en

(iv) die analisering van spesifieke aspekte rakende die onderrig en opleiding van

voornemende GRe aan die Universiteit van Johannesburg (UJ).

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viii

TABLE OF CONTENTS

PREFACE...................................................................................... i

ABSTRACT ................................................................................. iv

OPSOMMING............................................................................. vi

LIST OF FIGURES .................................................................. xxvi

LIST OF TABLES .................................................................... xxix

LIST OF ABBREVIATIONS AND ACRONYMS......................... xxxv

CHAPTER 1: INTRODUCTION ....................................................1

1.1 INTRODUCTION ................................................................................1

1.2 MOTIVATION FOR THE STUDY ..........................................................3

1.3 IDENTIFICATION OF THE PROBLEM .................................................4

1.4 AIM OF THIS STUDY..........................................................................6

1.5 OBJECTIVES ......................................................................................7

1.5.1 Issues addressed in the study .................................................................. 7

1.5.2 Specific objectives of the study ................................................................ 7

1.5.3 Demarcation of study .............................................................................. 8

1.6 RESEARCH METHODOLOGY...............................................................8

TABLE OF CONTENTS ix

1.7 SCOPE OF THE STUDY .......................................................................9

1.7.1 Rand Afrikaans University ........................................................................ 9

1.7.2 Learners and students ............................................................................. 9

1.7.3 Undergraduate students .........................................................................10

1.7.4 Educator and teacher .............................................................................10

1.7.5 Continuous professional development ......................................................10

1.7.6 Education and training............................................................................11

1.7.7 Professional accountants ........................................................................11

1.7.8 Public Accountants’ and Auditors’ Board...................................................11

1.8 CONTENTS OF THE STUDY...............................................................11

1.9 PLANNED CONTRIBUTION TO RESEARCH.......................................12

CHAPTER 2: DEMARCATING AN EDUCATIONAL FRAMEWORK FOR

THE TRAINING OF CHARTERED ACCOUNTANTS

NATIONALLY AND INTERNATIONALLY .......................14

2.1 INTRODUCTION ..............................................................................14

2.2 AN OVERVIEW OF THE EDUCATIONAL LANDSCAPE IN SOUTH AFRICA............................................................................................15

2.2.1 Introduction ..........................................................................................16

2.2.2 Primary and Secondary Education and Training ........................................16

2.2.2.1 White Paper 1............................................................................................. 16

2.2.2.2 White Paper 2............................................................................................. 17

2.2.3 Higher Education and Training ................................................................17

2.2.3.1 White Paper 3............................................................................................. 18

2.2.3.2 Higher Education Act................................................................................... 18

2.2.3.3 National Plan for Higher Education ............................................................... 19

2.2.3.4 Higher Education Qualifications Framework .................................................. 20

TABLE OF CONTENTS x

2.2.4 National Qualifications Framework...........................................................20

2.2.4.1 Introduction................................................................................................ 20

2.2.4.2 The NQF Structure ...................................................................................... 21

2.2.4.3 The training of chartered accountants and the NQF structure......................... 21

2.3 AN OVERVIEW OF THE CHARTERED ACCOUNTING PROFESSION IN SOUTH AFRICA...........................................................................23

2.3.1 A historical overview ..............................................................................23

2.3.2 A current overview.................................................................................28

2.3.2.1 Background on transformation ..................................................................... 28

2.3.2.2 Some statistical evidence............................................................................. 29

2.3.3 Roles and responsibilities of SAICA and PAAB...........................................33

2.3.4 The restructuring of the accounting profession .........................................35

2.3.4.1 Accounting Profession Bill ............................................................................ 35

2.3.4.2 Audit Profession Act .................................................................................... 35

2.4 THE CHANGING FACE OF ACCOUNTING EDUCATION......................37

2.4.1 Introduction ..........................................................................................37

2.4.2 The dynamic nature of the accounting environment..................................37

2.4.3 Accounting education at higher education institutions ...............................38

2.5 INTERNATIONAL ACCOUNTING EDUCATION STANDARDS .............40

2.5.1 Introduction ..........................................................................................40

2.5.2 Definition of terminology ........................................................................41

2.5.3 International Education Standards...........................................................41

2.5.3.1 Education and practical experience needs..................................................... 43

2.5.3.2 Dynamic profession..................................................................................... 44

2.5.3.3 Lifelong learning ......................................................................................... 44

2.5.3.4 Continuous professional development........................................................... 44

2.5.3.5 Competence assessment ............................................................................. 44

2.6 PRESCRIBED CONTENT OF CHARTERED ACCOUNTANT EDUCATION PROGRAMMES – AN INTERNATIONAL PERSPECTIVE ..................................................................................45

2.6.1 Introduction ..........................................................................................45

TABLE OF CONTENTS xi

2.6.2 Education and training components.........................................................46

2.6.2.1 Professional knowledge component.............................................................. 46 a) Introduction .................................................................................................................... 46 b) Content ........................................................................................................................... 48

(i) Accounting, finance and related knowledge ........................................................ 48 (ii) Organisational and business knowledge.............................................................. 49 (iii) Information technology ........................................................................................ 50

2.6.2.2 Non-professional knowledge (skills) component ............................................ 52 a) Introduction .................................................................................................................... 52 b) Content ........................................................................................................................... 53

(i) Intellectual skills .................................................................................................. 53 (ii) Technical and functional skills............................................................................. 54 (iii) Personal skills ...................................................................................................... 55 (iv) Interpersonal and communication skills .............................................................. 55 (v) Organisational and business management skills ................................................. 56

2.6.2.3 General education component...................................................................... 56 a) Introduction .................................................................................................................... 56 b) Content ........................................................................................................................... 57

2.6.3 Professional values, ethics and attitudes ..................................................58

2.6.3.1 Introduction................................................................................................ 58

2.6.3.2 Content ...................................................................................................... 58

2.6.3.3 Teaching professional values, ethics and attitudes......................................... 60

2.6.3.4 Workplace learning and professional values, ethics and attitudes ................... 61

2.6.4 Continuous professional development ......................................................62

2.6.4.1 Introduction................................................................................................ 62

2.6.4.2 Purpose and scope...................................................................................... 62

2.6.5 Promotion of lifelong learning .................................................................65

2.7 PRESCRIBED CONTENT OF CHARTERED ACCOUNTANT EDUCATION PROGRAMMES – A SOUTH AFRICAN PERSPECTIVE....65

2.7.1 Introduction ..........................................................................................65

2.7.2 Training as a chartered accountant..........................................................67

2.7.3 The training environment .......................................................................68

2.7.4 The goal of training................................................................................69

2.7.4.1 Knowledge fundamental to training .............................................................. 70 a) Auditing.......................................................................................................................... 70 b) Accounting, financial management and secretarial services .......................................... 71 c) Information technology .................................................................................................. 71 d) Taxation and estates ....................................................................................................... 71

TABLE OF CONTENTS xii

2.7.4.2 Skills fundamental to training and development ............................................ 71 a) Intellectual skills............................................................................................................. 72 b) Interpersonal skills ......................................................................................................... 72 c) Communication skills..................................................................................................... 72

2.7.4.3 Professional values...................................................................................... 72

2.8 A SUMMARISED INTERNATIONAL AND NATIONAL COMPARISON OF THE TRAINING OF A CHARTERED ACCOUNTANT..................................................................................74

2.9 SUMMARY .......................................................................................77

CHAPTER 3: CONTINUOUS PROFESSIONAL DEVELOPMENT

THROUGH SELF-DIRECTED LEARNING.......................81

3.1 INTRODUCTION ..............................................................................81

3.2 CONTINUOUS PROFESSIONAL DEVELOPMENT ...............................83

3.2.1 Introduction ..........................................................................................83

3.2.2 Definitions and descriptions ....................................................................85

3.2.2.1 Continuous professional development........................................................... 85

3.2.2.2 Competence and continuous professional development ................................. 87

3.2.2.3 Lifelong learning and continuous professional development ........................... 87

3.2.2.4 Self-directed learning and continuous professional development .................... 88

3.2.3 The need for continuous professional development of chartered accountants...........................................................................................89

3.3 SELF-DIRECTED LEARNING.............................................................90

3.3.1 Introduction ..........................................................................................90

3.3.2 Current theories of learning ....................................................................91

3.3.2.1 Learning is a process of knowledge construction ........................................... 91

3.3.2.2 Learning is knowledge-dependent ................................................................ 91

3.3.2.3 Learning is situation-bound.......................................................................... 91

3.3.2.4 Learning needs to account for distributed cognition....................................... 92

3.3.2.5 Learning is affected by motivational issues ................................................... 92

3.3.3 Historical perspective on self-directed learning .........................................93

TABLE OF CONTENTS xiii

3.3.4 Defining self-directed learning.................................................................95

3.3.5 Characteristics or dimensions of a self-directed learner .............................99

3.3.5.1 Personal autonomy ................................................................................... 101

3.3.5.2 Self-management (self-regulation) ............................................................. 101

3.3.5.3 Independent pursuit of learning ................................................................. 102

3.3.5.4 Learner control ......................................................................................... 102

3.3.6 Skills needed for self-directed learning...................................................103

3.3.7 Learner-centred approaches in self-directed learning ..............................104

3.3.7.1 Introduction.............................................................................................. 104

3.3.7.2 Teacher-centred learning versus self-directed learning ................................ 104

3.3.7.3 The lack of learner-centred approaches in the education of chartered accountants .............................................................................................. 107

a) Student readiness.......................................................................................................... 107 b) Teacher support mechanisms ....................................................................................... 108 c) Non-reflective teaching approaches ............................................................................. 108

3.3.8 Myths, realities and challenges of self-directed learning ..........................108

3.3.8.1 Introduction.............................................................................................. 108

3.3.8.2 Myths of self-directed learning ................................................................... 109 a) Autonomy..................................................................................................................... 109 b) Emancipation................................................................................................................ 110 c) Socio-cultural perspective ............................................................................................ 111

3.3.8.3 Realities of self-directed learning................................................................ 112 a) Empowerment to self-direction .................................................................................... 112 b) Communal learning ...................................................................................................... 112 c) Assessment ................................................................................................................... 113

3.3.8.4 Challenges of self-directed learning ............................................................ 113 a) Self-directed learning must be ‘taught’ ........................................................................ 113 b) Self-directed learning and cross-cultural perspectives ................................................. 114 c) Collaborative aspects of self-directed learning ............................................................ 114 d) Use of technology......................................................................................................... 114 e) Self-directed learning - a future learning methodology?.............................................. 115 f) Assessment ................................................................................................................... 116

3.3.9 Facilitation of self-direction in learning...................................................116

3.3.9.1 Roles of educators .................................................................................... 116

3.3.9.2 Roles of educational institutions ................................................................. 118

3.4 PROBLEM-BASED LEARNING ........................................................118

3.4.1 Introduction ........................................................................................118

3.4.2 Defining problem-based learning...........................................................119

TABLE OF CONTENTS xiv

3.4.3 Problem-based learning environments ...................................................120

3.4.4 Principles of problem-based learning methodology..................................121

3.5 LIFELONG LEARNING IN PRACTICE USING A SELF-DIRECTED LEARNING APPROACH ..................................................................122

3.5.1 Introduction ........................................................................................122

3.5.2 Understanding lifelong learning .............................................................123

3.5.3 Self-directed learning as a vehicle for lifelong learning and continuous professional development .....................................................................124

3.5.4 Implications of self-directed learning in continuous professional development .......................................................................................124

3.6 A SOUTH AFRICAN PERSPECTIVE .................................................125

3.7 SUMMARY .....................................................................................126

CHAPTER 4: A HOLISTIC CRITIQUE OF ETHICS ..........................131

4.1 INTRODUCTION ............................................................................131

4.2 THE THEORY OF ETHICS ...............................................................132

4.2.1 Introduction ........................................................................................132

4.2.2 Definitions...........................................................................................132

4.2.3 Theories of ethics ................................................................................133

4.2.3.1 Descriptive ethics ...................................................................................... 134 a) Piaget ............................................................................................................................ 134 b) Kohlberg....................................................................................................................... 135 c) Foucault ........................................................................................................................ 137

4.2.3.2 Prescriptive ethics ..................................................................................... 137 a) Virtue Theory ............................................................................................................... 137 b) Deontological Theory................................................................................................... 138 c) Utilitarian Theory ......................................................................................................... 139

4.2.3.3 Meta-ethics............................................................................................... 139

TABLE OF CONTENTS xv

4.3 THE MORALS, ETHICS AND VALUES DEBATE: A BROAD-BASED DISCUSSION .................................................................................139

4.3.1 Introduction ........................................................................................139

4.3.2 Morals and ethics .................................................................................140

4.3.2.1 Ethical problem......................................................................................... 142

4.3.2.2 Ethical behaviour ...................................................................................... 142

4.3.2.3 Unethical behaviour .................................................................................. 143 a) The person's ethical standards differ from general society........................................... 143 b) The person chooses to act selfishly .............................................................................. 144

4.3.3 Morals and values ................................................................................144

4.3.3.1 Globalisation............................................................................................. 145

4.3.3.2 Democracy ............................................................................................... 145

4.3.3.3 Cultural diversity ....................................................................................... 146

4.3.4 Ethics and values .................................................................................148

4.3.4.1 Strategic values ........................................................................................ 149

4.3.4.2 Work values.............................................................................................. 149

4.3.4.3 Ethical values............................................................................................ 149

4.4 GENERAL VERSUS PROFESSIONAL ETHICS ..................................150

4.4.1 Introduction ........................................................................................150

4.4.2 General ethics......................................................................................150

4.4.2.1 Absolutists................................................................................................ 151

4.4.2.2 Relativists................................................................................................. 152

4.4.2.3 Individualists ............................................................................................ 152

4.4.2.4 Idealists ................................................................................................... 152

4.4.3 Professional ethics ...............................................................................152

4.4.3.1 What is a profession? ................................................................................ 153

4.4.3.2 The virtues of a professional accountant..................................................... 154

4.4.3.3 Thoughts on professional ethics ................................................................. 157

4.5 BUSINESS ETHICS.........................................................................158

4.5.1 Introduction ........................................................................................158

4.5.2 Defining/describing business ethics .......................................................159

4.5.3 The ‘morals’ of business ethics ..............................................................160

4.5.4 Business ethics and the stakeholders’ theory ..........................................161

TABLE OF CONTENTS xvi

4.6 MORALS, VALUES AND ETHICS IN PRACTICE ...............................163

4.6.1 Introduction ........................................................................................163

4.6.2 A ‘pocket guide’ to being ethical ............................................................163

4.6.2.1 The first “R” – Respect .............................................................................. 163

4.6.2.2 The second “R” – Responsibility ................................................................. 165

4.6.2.3 The third “R” – Results .............................................................................. 166

4.7 CODES OF PROFESSIONAL ETHICS ...............................................167

4.7.1 Introduction ........................................................................................167

4.7.2 Codes of ethics for chartered accountants..............................................168

4.7.3 SAICA Code of professional conduct ......................................................171

4.8 SUMMARY .....................................................................................172

CHAPTER 5: ETHICS EDUCATION ...........................................175

5.1 INTRODUCTION ............................................................................175

5.2 TEACHING OF BUSINESS ETHICS: AN OVERVIEW ........................176

5.2.1 Introduction ........................................................................................176

5.2.2 Can ethics be taught?...........................................................................178

5.2.3 Can ethics be taught to undergraduate accounting students? ..................181

5.2.4 Is ethics teaching also indoctrination?....................................................182

5.2.5 Aims of teaching business ethics ...........................................................185

5.2.6 An integrated approach?.......................................................................186

5.3 PERSPECTIVES ON THE TEACHING OF BUSINESS ETHICS ...........188

5.3.1 International perspective ......................................................................189

5.3.2 South African perspective .....................................................................191

5.4 VARIOUS APPROACHES TO THE TEACHING AND LEARNING OF BUSINESS ETHICS.........................................................................194

5.4.1 Introduction ........................................................................................194

TABLE OF CONTENTS xvii

5.4.1.1 Defining teaching...................................................................................... 194

5.4.1.2 Defining learning....................................................................................... 194

5.4.1.3 Linking teaching and learning .................................................................... 194

5.4.2 The conventional or institutional approach .............................................195

5.4.3 Community learning approach...............................................................196

5.4.4 The conversational approach ................................................................197

5.4.5 The games approach............................................................................199

5.4.6 The computer learning approach...........................................................200

5.4.6.1 E-learning: closed approach....................................................................... 202

5.4.6.2 E-learning: open approach......................................................................... 202

5.4.7 The experiential learning approach........................................................203

5.4.7.1 Simulation approach.................................................................................. 205

5.4.7.2 Case studies ............................................................................................. 205

5.4.7.3 Journals ................................................................................................... 206

5.4.7.4 Debriefing – a crucial aspect in experiential learning activities...................... 207

5.5 SOME CRITICISM FROM A SOUTH AFRICAN PERSPECTIVE..........208

5.5.1 Introduction ........................................................................................208

5.5.2 Amount of technical detail ....................................................................210

5.5.3 Effectiveness of coverage .....................................................................210

5.5.4 Theory versus application .....................................................................211

5.5.5 Use of computer technology .................................................................212

5.5.6 Classroom realities ...............................................................................212

5.5.7 Other ..................................................................................................213

5.6 SUMMARY .....................................................................................213

CHAPTER 6: RESEARCH METHODOLOGY ..................................217

6.1 INTRODUCTION ............................................................................217

6.2 RESEARCH DESIGN .......................................................................218

6.2.1 Qualitative research .............................................................................218

TABLE OF CONTENTS xviii

6.2.2 Quantitative research ...........................................................................218

6.2.2.1 Nominal scale ........................................................................................... 219

6.2.2.2 Ordinal scale............................................................................................. 219

6.2.2.3 Interval scale ............................................................................................ 220

6.2.2.4 Ratio scale................................................................................................ 220

6.2.3 Quality of measurement .......................................................................220

6.2.3.1 Reliability.................................................................................................. 220

6.2.3.2 Validity ..................................................................................................... 221 a) Internal validity ............................................................................................................ 221 b) External validity ........................................................................................................... 222

6.3 QUESTIONNAIRE DESIGN.............................................................222

6.3.1 Introduction ........................................................................................222

6.3.2 General guidelines in constructing questionnaires ...................................223

6.3.3 Types of questions ...............................................................................224

6.3.3.1 Open-ended questions............................................................................... 224

6.3.3.2 Closed questions ....................................................................................... 224

6.3.3.3 Likert scales.............................................................................................. 224 a) Advantages of using Likert scales................................................................................ 225 b) Disadvantages of using Likert scales ........................................................................... 225 c) Criticism of the use of the Likert scale......................................................................... 225 d) Likert scale employed in this study .............................................................................. 226

6.3.3.4 Ambiguity and bias.................................................................................... 226

6.4 THE SURVEY INSTRUMENT ...........................................................227

6.4.1 Introduction ........................................................................................227

6.4.2 Questionnaire layout ............................................................................227

6.4.3 Testing of the instrument .....................................................................229

6.4.4 Sampling approach ..............................................................................230

6.4.5 Administration .....................................................................................230

6.4.6 Data analysis .......................................................................................231

6.5 ETHICAL CONSIDERATIONS .........................................................231

6.5.1 Permission to collect data .....................................................................231

6.5.2 Informed consent ................................................................................231

TABLE OF CONTENTS xix

6.5.3 Confidentiality and anonymity ...............................................................231

6.6 ANALYSIS OF DATA.......................................................................232

6.6.1 Descriptive analysis of data...................................................................232

6.6.1.1 Standard deviation .................................................................................... 232

6.6.1.2 Skewness ................................................................................................. 233

6.6.1.3 Kurtosis.................................................................................................... 233

6.6.2 Factor analysis.....................................................................................234

6.6.2.1 Introduction.............................................................................................. 234

6.6.2.2 Aim of factor analysis ................................................................................ 234

6.6.2.3 Practical considerations when using exploratory factor analysis .................... 235 a) Sample size................................................................................................................... 235 b) Factor extraction method.............................................................................................. 235 c) Method of rotation........................................................................................................ 235 d) Reliability of factor analysis......................................................................................... 236

(i) Kaiser-Meyer-Olkin Measure of Sampling Adequacy........................................ 236 (ii) Bartlett’s Test of Sphericity................................................................................ 236 (iii) Initial Eigenvalues ............................................................................................. 236

6.6.3 Item analysis .......................................................................................237

6.6.4 Factor scores .......................................................................................237

6.6.5 Development of hypotheses..................................................................237

6.6.6 Testing of hypotheses ..........................................................................237

6.6.6.1 Introduction.............................................................................................. 237

6.6.6.2 t-tests for independent samples ................................................................. 238

6.6.6.3 Mann-Whitney U test................................................................................. 238

6.6.6.4 Pearson Chi-square test............................................................................... 23

6.7 SUMMARY .....................................................................................238

CHAPTER 7: EMPIRICAL ANALYSIS.........................................239

7.1 INTRODUCTION ............................................................................239

7.2 STUDENTS’ PROFILE .....................................................................241

7.2.1 Gender................................................................................................241

7.2.2 Year matriculated.................................................................................241

TABLE OF CONTENTS xx

7.2.3 Highest educational qualification ...........................................................242

7.3 THE CHARTERED ACCOUNTANT AND HIS/HER PROFESSION.......243

7.3.1 Descriptive analysis ..............................................................................243

7.3.2 Some important aspects of the data found in the descriptive analysis.......246

7.3.2.1 A professional CA: an ethical CA? ............................................................... 246

7.3.2.2 Basic theoretical knowledge versus additional knowledge ............................ 249

7.3.3 Factor analysis of the items measuring the chartered accountant and his/her profession ................................................................................252

7.3.3.1 Factor analysis 1 ....................................................................................... 252

7.3.3.2 Factor analysis 2 ....................................................................................... 254

7.3.4 Item analysis .......................................................................................258

7.3.4.1 Factor 1: CmpSkll.................................................................................... 258

7.3.4.2 Factor 2: Ethcs ........................................................................................ 260

7.3.4.3 Factor 3: EdcTrn ...................................................................................... 262

7.3.4.4 Factor 4: CmpPrf ..................................................................................... 264

7.3.5 Factor scores .......................................................................................265

7.3.5.1 Calculation................................................................................................ 265

7.3.5.2 Interpreting factor scores .......................................................................... 266 a) Factor 1: CmpSkll ........................................................................................................ 266 b) Factor 2: Ethcs ............................................................................................................. 268 c) Factor 3: EdcTrn .......................................................................................................... 269

7.3.6 Hypothesis testing................................................................................270

7.3.6.1 Factor 1: CmpSkll.................................................................................... 271

7.3.6.2 Factor 2: Ethcs ........................................................................................ 272

7.3.6.3 Factor 3: EdcTrn ...................................................................................... 272

7.4 CONTINUOUS PROFESSIONAL DEVELOPMENT OF CHARTERED ACCOUNTANTS..............................................................................273



7.4.2.1 Ethics and corporate collapses ................................................................... 275

7.4.2.2 Continuous professional development requirement for CAs .......................... 276

7.4.2.3 Teaching the skills of CPD.......................................................................... 277

7.4.3 Factor analysis of the items measuring the need for continuous professional development of chartered accountants ................................278

TABLE OF CONTENTS xxi

7.4.4 Item analysis .......................................................................................280

7.4.4.1 Factor 1: LrnCPD ..................................................................................... 280

7.4.4.2 Factor 2: CrtCPD ..................................................................................... 282

7.4.4.3 Factor 3: ValCPD ..................................................................................... 284

7.4.5 Factor scores .......................................................................................284

7.4.5.1 Calculation................................................................................................ 284

7.4.5.2 Interpreting factor scores .......................................................................... 284 a) Factor 1: LrnCPD ........................................................................................................ 285 b) Factor 2: CrtCPD ......................................................................................................... 286


7.4.6.1 Factor 1: LrnCPD ..................................................................................... 289

7.4.6.2 Factor 2: CrtCPD ..................................................................................... 289

7.5 LIFELONG LEARNING OF CHARTERED ACCOUNTANTS .................289


7.5.2 Factor analysis of the items measuring the need for lifelong learning of chartered accountants ..........................................................................293


7.6 ASPECTS OF ETHICS EDUCATION RELATED TO CHARTERED ACCOUNTANTS..............................................................................295



7.6.2.1 Ethics is a gut feel..................................................................................... 297

7.6.2.2 Ethics education........................................................................................ 297

7.6.2.3 Ethics education: a moral conversion process ............................................. 298

7.6.2.4 Ethics education at higher education institutions ......................................... 299

7.6.2.5 Professional ethics: a contradiction? ........................................................... 300

7.6.3 Factor analysis of the items measuring aspects of ethics related to chartered accountants ..........................................................................301

7.6.4 Item analysis .......................................................................................303

7.6.4.1 Factor 1: EthcEduc .................................................................................. 303

7.6.5 Factor scores .......................................................................................305

7.6.5.1 Calculation................................................................................................ 305

7.6.5.2 Interpreting factor scores .......................................................................... 305

TABLE OF CONTENTS xxii


7.7 PERCEIVED CORE VALUES WITHIN THE CHARTERED ACCOUNTANCY PROFESSION........................................................309


7.7.2 Factor analysis of the items measuring the perceived core values within the chartered accountancy profession....................................................314


7.8 ASPECTS OF THE EDUCATION AND TRAINING OF CHARTERED ACCOUNTANTS AT RAU .................................................................316



7.8.2.1 Skilled educators....................................................................................... 320

7.8.2.2 A focus on computer skills ......................................................................... 321

7.8.2.3 A focus on professional ethics .................................................................... 322

7.8.3 Factor analysis of the items measuring aspects of the education and training of chartered accountants at RAU ...............................................325


7.9 SUMMARY .....................................................................................327

CHAPTER 8: ATTITUDES OF UNDERGRADUATE STUDENTS TO

CONTINUOUS PROFESSIONAL DEVELOPMENT OF

ETHICS: AN ANALYSIS.........................................332

8.1 INTRODUCTION ............................................................................333

8.2 ATTITUDES OF UNDERGRADUATE STUDENTS TOWARD CONTINUOUS PROFESSIONAL DEVELOPMENT OF ETHICS ...........336

8.3 DEMARCATE THE CA AND THE PROFESSION BY WAY OF UNDERGRADUATE STUDENTS’ PERCEPTIONS ..............................336

8.3.1 The chartered accountant and his/her profession....................................336

8.3.1.1 Introduction.............................................................................................. 336

TABLE OF CONTENTS xxiii

8.3.1.2 General competency and skills ................................................................... 336

8.3.1.3 Values, ethics and attitudes ....................................................................... 336

8.3.1.4 Training, education and lifelong learning .................................................... 339

8.3.1.5 Some summarising remarks....................................................................... 339

8.4 DETERMINE UNDERGRADUATE STUDENTS’ PERCEPTIONS OF CPD, LLL AND ETHICS WITHIN THE FRAMEWORK OF A CA AND HIS/HER UNDERGRADUATE EDUCATION .....................................340

8.4.1 The continuous professional development of chartered accountants.........340

8.4.1.1 Introduction.............................................................................................. 340

8.4.1.2 Education and pursuance of CPD................................................................ 340

8.4.1.3 Importance of continuous professional development ................................... 343


8.4.2 Lifelong learning of chartered accountants .............................................344

8.4.2.1 Introduction.............................................................................................. 344

8.4.2.2 Perceived core aspects of lifelong learning.................................................. 344


8.4.3 Aspects of ethics education related to chartered accountants ..................346

8.4.3.1 Introduction.............................................................................................. 346

8.4.3.2 Aspects of ethics education........................................................................ 346


8.5 INVESTIGATE THE PERCEIVED CORE VALUES WITHIN THE CA PROFESSION .................................................................................348

8.5.1 Perceived core values within the chartered accountancy profession..........348

8.5.1.1 Introduction.............................................................................................. 348


8.6 ANALYSE CERTAIN ASPECTS OF THE EDUCATION AND TRAINING OF CAs AT RAU ............................................................350

8.6.1 Aspects of the education and training of chartered accountants at RAU....350

8.6.1.1 Introduction.............................................................................................. 350

8.6.1.2 Aspects of education of chartered accountants at RAU ................................ 353


8.7 SUMMARY .....................................................................................354

TABLE OF CONTENTS xxiv

CHAPTER 9: SUMMARY, CONCLUSION AND RECOMMENDATIONS ...355

9.1 INTRODUCTION ............................................................................356

9.2 SUMMARY OF THE THESIS ............................................................356

9.2.1 Chapter 1 – Objectives of this study ......................................................356

9.2.2 Chapter 2 – Demarcating an educational framework for the training of chartered accountants nationally and internationally ...............................356

9.2.3 Chapter 3 – Continuous professional development through self-directed learning...............................................................................................357

9.2.4 Chapter 4 – A holistic critique of ethics ..................................................358

9.2.5 Chapter 5 – Ethics education.................................................................359

9.2.6 Chapter 6 – Research methodology .......................................................359

9.2.7 Chapter 7 – Empirical analysis...............................................................360

9.2.8 Chapter 8 – Attitudes of undergraduate students toward continuous professional development of ethics........................................................360

9.3 FINDINGS OF THE STUDY .............................................................360

9.3.1 Demarcate the CA and the profession by way of undergraduate students’ perceptions ...........................................................................360

9.3.2 Determine undergraduate students’ perceptions of CPD, LLL and ethics within the framework of a CA and his/her undergraduate education.........361

9.3.3 Investigate the perceived core values within the CA profession................362

9.3.4 Analyse certain aspects of the education and training of CAs at RAU........362

9.4 CONCLUSIONS ..............................................................................363

9.5 RECOMMENDATIONS ....................................................................364

9.6 SCOPE FOR FURTHER RESEARCH..................................................366

BIBLIOGRAPHY......................................................................368

TABLE OF CONTENTS xxv

APPENDICES ..........................................................................413

Appendix A ...................................................................................................413

Appendix B....................................................................................................419

Appendix C ...................................................................................................430

Appendix D ...................................................................................................433

Appendix E....................................................................................................442

Appendix F....................................................................................................448

Appendix G ...................................................................................................452

Appendix H ...................................................................................................458

Appendix I ....................................................................................................462

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xxvi

LIST OF FIGURES

FIGURE 2.1: The historical development of the Accounting Profession in

South Africa .........................................................................24

FIGURE 2.2: Total number of registered CAs per race, 2001 – 2006 ............30

FIGURE 2.3: Number of registered CAs per race and gender, 2002 –

2006....................................................................................31

FIGURE 2.4: Number of registered black CAs and growth amongst black

and white CAs, 2002 – 2006..................................................32

FIGURE 2.5: International Education Standards .........................................42

FIGURE 2.6: Education environment of a chartered accountant ...................46

FIGURE 2.7: Qualifying as a chartered accountant .....................................66

FIGURE 3.1: Learning matrix ....................................................................98

FIGURE 4.1: An outline of Kohlberg’s Stages of Moral Development...........136

FIGURE 4.2: Combining morals, values and ethics....................................140

FIGURE 6.1: Independent variables focussed on in the study ....................228

FIGURE 7.1: Gender profile of respondents (n = 491)...............................241

FIGURE 7.2: Year of matriculation by respondents (n = 489) ....................242

FIGURE 7.3: Highest educational qualification (n = 491)...........................243

FIGURE 7.4: Mean and median distribution for the chartered

accountant and his/her profession (n = 491) .................246

FIGURE 7.5: Histogram and distribution of Factor 1 (CmpSkll) ................267

LIST OF FIGURES xxvii

FIGURE 7.6: Histogram and distribution of Factor 2 (Ethcs).....................268

FIGURE 7.7: Histogram and distribution of Factor 3 (EdcTrn) ..................269

FIGURE 7.8: Mean and median distribution for the continuous

professional development of chartered accountants

(n = 491)...........................................................................274

FIGURE 7.9: Histogram and distribution of Factor 1 (LrnCPD) .................286

FIGURE 7.10: Histogram and distribution of Factor 2 (CrtCPD)..................287

FIGURE 7.11: Mean and median distribution for the lifelong learning of

chartered accountants (n = 491).....................................291

FIGURE 7.12a: Gender split of frequencies for the lifelong learning of

chartered accountants (n = 491; x < 1.60).....................292

FIGURE 7.12b: Gender split of frequencies for the lifelong learning of

chartered accountants (n = 491; x > 1.60).....................292

FIGURE 7.13: Mean and median distribution for aspects of ethics

related to the chartered accountant (n = 491) ...............296

FIGURE 7.14: Histogram and distribution of Factor 1 (EthcEduc) ..............307

FIGURE 7.15: Mean and median distribution for the perceived core

values within the chartered accountant profession

(n = 491) ...........................................................................311

FIGURE 7.16a: Gender split of frequencies for the perceived core values

within the chartered accountant profession (n = 491;

x < 1.40)..........................................................................312

FIGURE 7.16b: Gender split of frequencies for the perceived core values

within the chartered accountant profession (n = 491;

x > 1.40)..........................................................................313

FIGURE 7.17: Mean and median distribution for the aspects of the

education and training of prospective chartered

accountants at the RAU (n = 491) ...................................318

LIST OF FIGURES xxviii

FIGURE 7.18a: Gender split of frequencies for the aspects of the


accountants at the RAU (n = 491; x < 1.85) ...................319

FIGURE 7.18b: Gender split of frequencies for the aspects of the


accountants at the RAU (n = 491; x > 1.85) ...................320

FIGURE 7.19: CPD of ethics amongst prospective CAs ................................328

FIGURE 8.1: Utilising CPD of ethics amongst prospective CAs....................335

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xxix

LIST OF TABLES

TABLE 2.1: National Qualifications Framework Structure ...........................22

TABLE 2.2: The roles of SAICA and PAAB ................................................33

TABLE 2.3: A training comparison of chartered accountants ......................74

TABLE 3.1: Differences between TDL and SDL environments...................104

TABLE 3.2: Comparison of the Mocker & Spear and Hersey & Blanchard

Models of SDL ....................................................................106

TABLE 7.1: The chartered accountant and his/her profession ..................244

TABLE 7.2: Descriptive analysis: Item U11 (Section B1)..........................245

TABLE 7.2a: Descriptive analysis: Item U8 (Section B1)............................245

TABLE 7.2b: Descriptive analysis: Item U18 (Section B1)..........................245

TABLE 7.2c: Descriptive analysis: Item U13 (Section B1)..........................246

TABLE 7.2d: Descriptive analysis: Item U4 (Section B1)............................246

TABLE 7.2e: Descriptive analysis: Item U9 (Section B1)............................249

TABLE 7.2f: Descriptive analysis: Item U7 (Section B1)............................249

TABLE 7.3: Descriptive analysis: Item U14 (Section B1)..........................249

TABLE 7.3a: Descriptive analysis: Item U16 (Section B1)..........................250

TABLE 7.3b: Descriptive analysis: Item U21 (Section B1)..........................250

TABLE 7.3c: Descriptive analysis: Item U23 (Section B1)..........................251

TABLE 7.3d: Descriptive analysis: Item U6 (Section B1)............................251

TABLE 7.4: KMO and Bartlett's Test (First factor analysis: Section B1)......252

LIST OF TABLES xxx

TABLE 7.5: Anti-Image Matrices (Anti-Image Correlation – Factor

Analysis 1) .........................................................................253

TABLE 7.6: KMO and Bartlett's Test (Second factor analysis: Section

B1)....................................................................................254

TABLE 7.7: Total Variance Explained (Section B1) ..................................255

TABLE 7.8: Rotated Factor Matrix(a) (Section B1)....................................256

TABLE 7.9: Item statistics – Factor 1 (CmpSkll)....................................259

TABLE 7.10: Item-total statistics – Factor 1 (CmpSkll) ............................259

TABLE 7.11: Item statistics – Factor 2 (Ethcs) ........................................260

TABLE 7.12: Item-total statistics – Factor 2 (Ethcs).................................261

TABLE 7.13: Item statistics – Factor 3 (EdcTrn) ......................................262

TABLE 7.14: Item-total statistics – Factor 3 (EdcTrn) ..............................263

TABLE 7.15: Item-total statistics – Factor 4 (CmpPrf) .............................264

TABLE 7.16: Descriptive statistics summary (Factor scores: Section B1).....266

TABLE 7.17: Independent Samples t-Test (Factors: Section B1) ................271

TABLE 7.18: Group statistics (Factors: Section B1) ...................................272

TABLE 7.19 Continuous professional development of chartered

accountants .......................................................................273

TABLE 7.20a: Descriptive analysis: Item V2 (Section B2)............................275

TABLE 7.20b: Descriptive analysis: Item V4 (Section B2)............................276

TABLE 7.21a: Descriptive analysis: Item V7 (Section B2)............................276

TABLE 7.21b: Descriptive analysis: Item V8 (Section B2)............................277

TABLE 7.22a: Descriptive analysis: Item V13 (Section B2) ..........................277

TABLE 7.22b: Descriptive analysis: Item V14 (Section B2) ..........................278

TABLE 7.23: KMO and Bartlett's Test (Section B2)....................................278


LIST OF TABLES xxxi

TABLE 7.25: Item statistics – Factor 1 (LrnCPD) .....................................281

TABLE 7.26: Item-total statistics – Factor 1 (LrnCPD) .............................281

TABLE 7.27: Item statistics – Factor 2 (CrtCPD) .....................................283

TABLE 7.28: Item-total statistics – Factor 2 (CrtCPD)..............................283

TABLE 7.29: Descriptive statistics summary (Factor scores: Section B2).....285



TABLE 7.32: Lifelong learning of chartered accountants............................290


TABLE 7.34: Non-parametric test (Section B3) .........................................294

TABLE 7.35: Aspects of ethics related to chartered accountants ................295

TABLE 7.36: Descriptive analysis: Item X2 (Section B4) ............................297



TABLE 7.39a: Descriptive analysis: Item X9 (Section B4) ............................299

TABLE 7.39b: Descriptive analysis: Item X11 (Section B4) ..........................300

TABLE 7.40: Descriptive analysis: Item X10 (Section B4) ..........................300

TABLE 7.41: KMO and Bartlett's Test (First factor analysis: Section B4)......301

TABLE 7.42: KMO and Bartlett's Test (Second factor analysis: Section

B4)....................................................................................302


TABLE 7.44: Item statistics – Factor 1 (EthcEduc) ..................................304

TABLE 7.45: Item-total statistics – Factor 1 (EthcEduc) ..........................304

TABLE 7.46: Descriptive Statistics (Factor scores: Section B4)...................305


LIST OF TABLES xxxii


TABLE 7.49: Perceived core values within the chartered accountant

profession..........................................................................310

TABLE 7.50: Pearson Chi-square test (Section B5) ...................................314



TABLE 7.53: Aspects of the education and training of prospective

chartered accountants at the RAU........................................317

TABLE 7.54a: Descriptive analysis: Item Z8 (Section B6) ............................321

TABLE 7.54b: Descriptive analysis: Item Z10 (Section B6) ..........................321

TABLE 7.54c: Descriptive analysis: Item Z6 (Section B6) ............................322

TABLE 7.54d: Descriptive analysis: Item Z9 (Section B6) ............................322

TABLE 7.54e: Descriptive analysis: Item Z1 (Section B6) ............................323

TABLE 7.54f: Descriptive analysis: Item Z2 (Section B6) ............................323

TABLE 7.54g: Descriptive analysis: Item Z4 (Section B6) ............................324

TABLE 7.54h: Descriptive analysis: Item Z3 (Section B6) ............................324

TABLE 7.54i: Descriptive analysis: Item Z5 (Section B6) ............................325

TABLE 7.54j: Descriptive analysis: Item Z7 (Section B6) ............................325



TABLE 7.57: Summary of hypotheses developed and tested......................330

TABLE 8.1: Summary results: Section B1 – The chartered accountant

and his/her profession ( ) ..................................................337

TABLE 8.2: Summary results: Section B2 – The continuous professional

development of chartered accountants ( ) ..........................341

LIST OF TABLES xxxiii

TABLE 8.3: Summary results: Section B3 – Lifelong learning of

chartered accountants ( ) ..................................................345

TABLE 8.4: Summary results: Section B4 – Aspects of ethics education

related to chartered accountants ( ) ...................................347

TABLE 8.5: Summary results: Section B5 – Perceived core values within

the chartered accountant profession ( ) ..............................349

TABLE 8.6: Summary results: Section B6 – Aspects of the education

and training of chartered accountants at the RAU ( ) ...........351

TABLE A1: Glossary of terms ...............................................................414

TABLE C1: Student profile distributed by gender ...................................431

TABLE C2: Year of matriculation according to respondents.....................431

TABLE C3: Year matriculated * Gender Crosstabulation..........................432

TABLE C4: Educational qualification * Gender Crosstabulation ................432

TABLE D1a: Descriptive statistics – Section B, Area 1 (Item 7 [U1] –

Item 19 [U13])...................................................................434

TABLE D1b: Descriptive statistics – Section B, Area 1 (Item 20 [U14] –

Item 31 [U25])...................................................................435

TABLE D2: Frequency distribution – Section B, Area 1 [U] ......................436

TABLE D3: Anti-Image Matrices (Anti-Image Correlation – Factor

Analysis 2) .........................................................................440

TABLE D4: Descriptive analysis of factor scores: Section B, Area 1 [U] ....441

TABLE E1: Descriptive statistics – Section B, Area 2 (Item 32 [V1] –

Item 45 [V14]) ...................................................................443

LIST OF TABLES xxxiv

TABLE E2: Frequency distribution – Section B, Area 2 [V] ......................444

TABLE E3: Descriptive analysis of factor scores: Section B, Area 2 [V] ....447

TABLE F1: Descriptive statistics – Section B, Area 3 (Item 46 [W1] –

Item 54 [W9])....................................................................449

TABLE F2: Frequency distribution – Section B, Area 3 [W] .....................450

TABLE G1: Descriptive statistics – Section B, Area 4 (Item 55 [X1] –

Item 65 [X11]) ...................................................................453

TABLE G2: Frequency distribution – Section B, Area 4 [X] ......................454

TABLE G3: Anti-Image Matrices (Anti-Image Correlation – Factor

Analysis) ............................................................................456

TABLE G4: Descriptive analysis of factor scores: Section B, Area 4 [X] ....457

TABLE H1: Descriptive statistics – Section B, Area 5 (Item 66 [Y1] –

Item 73 [Y8]).....................................................................459

TABLE H2: Frequency distribution – Section B, Area 4 [Y] ......................460

TABLE I1: Descriptive statistics – Section B, Area 6 (Item 74 [Z1] –

Item 83 [Z10]) ...................................................................463

TABLE I2: Frequency distribution – Section B, Area 6 [Z] ......................464

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xxxv

LIST OF ABBREVIATIONS AND ACRONYMS

AAT Associate Accounting Technician

AGA Associate General Accountant

ATO Approved Training Organisation

CA Chartered Accountant

CHE Council on Higher Education

CPD Continuous Professional Development

DoE Department of Education

FAESA Future of Accounting Education in South Africa Project

GAAP Generally Accepted Accounting Practice

IAS International Accounting Standards

IASB International Accounting Standards Board

IBE Institute of Business Ethics

IES International Education Standards for Professional

Accountants

IFAC International Federation of Accountants

IRBA Independent Regulatory Board for Auditors (formerly known

as PAAB)

KMO Kaiser-Meyer-Olkin Measure of Sampling Adequacy

LLL Lifelong learning

MSA Measures of Sampling Adequacy

NQF National Qualifications Framework

PAAB Public Accountants' and Auditors' Board (now known as

IRBA)

PBL Problem-based learning

LIST OF ABBREVIATIONS AND ACRONYMS xxxvi

PPE Public Practice Examination

RAA Registered Accountant and Auditor

RAU Rand Afrikaans University

RSA Republic of South Africa

RTO Registered Training Office

SAICA South African Institute of Chartered Accountants

SAIPA South African Institute of Professional Accountants

SAQA South African Qualifications Authority

SDL Self-directed learning

TIPP Training inside Public Practice

TOPP Training outside Public Practice

UJ University of Johannesburg

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1

CHAPTER 1 Introduction

1.1 INTRODUCTION

ll cultures and professions exist in an environment of change. Change may come

about as a result of an external ‘force’ (e.g. new legislation applicable to a

profession) or an internal ‘force’ (e.g. transformation within a profession). But it

may also occur as a result of a combination of both external and internal forces.

This view of change is in some ways applicable to the accounting profession, where

pressures for disclosure of more information, an increased public expectation of and

assurances about the quality of financial statements, as well as a greater use of

forecasts have had a holistic impact on chartered accountants (hereafter CAs),

management accountants and independent auditors alike.

The need to be competitive in a worldwide and globalised economy has prompted a

more intense focus on the role and responsibilities of professional accountants in

entities of all types. Add to that a magnified focus on recent corporate collapses (e.g.

Enron, WorldCom and others) and immediately there are calls for an investigation into

the competence and (ethical) behaviour of professional accountants.

Very often these calls are accompanied by a feeling that the root cause of these ‘wrong-

doings’ may have been inadequate education or a total disregard for the ethical

standards within the profession. A further aspect that then seems to be highlighted is

A

Introduction

CHAPTER 1 2

the reinforcement of the ‘expectation gap’ – the gap between society’s expectations of

professional accountants and auditors and the reality of their obligations.

Should one not perhaps objectively state that sometimes the professional (chartered)

accountant’s ethical obligation has to outweigh its statutory obligation? Staubus

(2005: 5) therefore summarised it as: “... accounting failures are failures of individuals

to perform their fiduciary duties, to fulfil their responsibilities, to behave ethically.”

In a speech by Ted Evans at the Griffith University Business School in August 2004, he

warned that major corporate collapses like Enron are bound to keep occurring due to

the business world’s wilful disregard of business values. “I believe that the solution to

this type of problem can only lie in a return to corporate behaviour that has a basis in

ethical values; behaviour that renders prescriptive law redundant” (Evans, 2004).

The goal of accounting education and training is to produce competent professional

accountants capable of, over their lifetimes, making a positive contribution to the

profession and society in which they work. Providing a basis of ethical values should

therefore be seen as an important element of the professional accountant’s education

and training phase.

Adding to that the maintenance of professional competence (i.e. technical and ethical)

in the face of the increasing changes that accountants encounter, it makes it even more

essential that accountants develop and maintain an attitude of learning to learn. “The

education and experience of professional accountants should provide a foundation of

knowledge, skills and professional values that enable them to continue to learn and

adapt to change throughout their professional lives” (International Federation of

Accountants (hereafter IFAC), 2002a: 2/3). It is important to note that the

‘professional accountants’ mentioned in this IFAC document can also be regarded as

‘prospective CAs’: the focus of this study (also see 1.7.7).

Introduction

CHAPTER 1 3

1.2 MOTIVATION FOR THE STUDY

As was pointed out earlier, change within the accounting profession has emphasised

the need for greater accountability and, as a result, the various demands on the

profession are high and continue to rise. In these days and times, an education

programme for CAs needs to go beyond the traditional educational approach that

emphasised ‘transfer of knowledge’ with learning defined and measured strictly in terms

of knowledge of principles, standards, concepts, facts and procedures at a given point

in time.

This change in the thinking about an educational programme for CAs was highlighted in

an exposure draft document by IFAC (2002a) entitled “Introduction to International

Education Standards for Professional Accountants”. In it the IFAC Education Committee

(2002a: 6-7) determined a range of International Educational Standards that are

intended to “advance the accounting profession” by establishing benchmarks for all the

learning requirements (at an undergraduate level) of prospective CAs, that include their

education, practical experience and training.

The Standards are directed toward establishing, inter alia, the:

goal of accounting [and auditing] education, training and experience leading to

final qualification; and

minimum benchmarks of professional education and experience that CAs should

meet to obtain membership in their respective professional bodies and to

continue in their profession (IFAC, 2002b: 11-12).

The International Education Standards (hereafter IES) for CAs proposed by IFAC cover

these minimum benchmarks of professional education and experience under the

following headings:

entry requirements;

professional education;

Introduction

CHAPTER 1 4

professional skills and general education;

professional values and ethics;

experience requirements;

assessment of professional competence;

continuing professional education and development; and

competence requirements for audit professionals.

These standards therefore prescribe a basic body of knowledge of principles, standards,

concepts, facts and procedures but augment it with additional skills and experience

highlighted by the IFAC minimum benchmarks. A training programme for prospective

CAs should thus combine and integrate aspects dealing with ethics, ethical values and

attitudes of CAs as well as issues of their continuing professional education and

development.

Formulating this ‘new’ training programme should involve detailed research not just on

the theoretical aspects contained in the programme but also into the current attitudes

among students as to their perception of ethics, ethical values and attitudes of CAs and

the incorporation of continuing professional education and development.

1.3 IDENTIFICATION OF THE PROBLEM

Educators have an obligation to respond not just to the ‘changes’ faced by the

accounting profession worldwide, but also to ‘changes’ in education legislation in South

Africa. In terms of the developmental outcomes proposed by the National Education

Policy Act of 1996 (Republic of South Africa (hereafter RSA), 1996b), the undergraduate

learner in higher education, in whatever of field of study, should inter alia be able to:

reflect on and explore a variety of strategies to learn more effectively;

participate as a responsible citizen in the life of local, national and global

communities; and

be culturally and aesthetically sensitive across a range of social contexts.

(Author’s emphasis)

Introduction

CHAPTER 1 5

A fundamental principle of the IFAC Code of Ethics for Professional Accountants (i.e.

CAs) states that (IFAC, 2004a: 7/8):

“A professional accountant has a continuing duty to maintain professional knowledge

and skill at the level required to ensure that a client or employer receives the

advantage of competent professional service based on current developments in

practice, legislation and techniques.”

During the education and training of prospective CAs (i.e. at undergraduate level),

teaching methods should not just focus on providing students with a basic grounding in

the knowledge, skills, professional values and ethics essential for professional

competency but also with the tools for learning and development after qualification (i.e.

continuous professional development (hereafter CPD)). This means providing a

foundation for lifelong learning (hereafter LLL).

LLL implies that learners should have the desire and ability to continue to learn, to

adapt and develop new knowledge, skills and technologies; to move flexibly between

occupations and to take responsibility for personal performance (RSA, 1995a: 21).

CPD is applicable to all CAs, regardless of sector or the size of the business in which

they operate, because (IFAC, 2004a: 4):

all CAs have an ethical obligation of due care to their clients, employers and

relevant stakeholders and need to demonstrate their ability to discharge this

responsibility in a competent manner;

CAs in all sectors hold positions of importance involving financial reporting,

public accountability and maintaining the public trust;

the public is likely to rely on the designation or standing of the CA. Moreover, all

CAs carry the chartered designation, and any lack of competence or ethical

behaviour has the same consequences to the reputation and standing of the

profession, irrespective of the sector or role in which they operate;

Introduction

CHAPTER 1 6

the rapidly changing environment creates the consequential need to adapt the

strategic or business plans of those organisations relying on the CA’s chartered

competence; and

employers hiring CAs in any sector rely, at least to some extent, on the

chartered designation as proof of competence.

The process of LLL and CPD for CAs should however commence early on in their

education and this should then be continued within their formal training programme

until their eventual qualification as a CA - and on through the individual’s career. Even

though CPD and LLL are seen as a post-qualification aspect, the initial LLL of ethics will

be strengthened if educators are able to provide students with a foundation through,

and reaffirming of the use of self-directed learning (hereafter SDL) and problem-based

learning (hereafter PBL) during their undergraduate education and training.

Important aspects of ethics education applied to the accounting profession that should

be included in undergraduate education and training include:

the importance of the teaching of business ethics as a core subject within the

education of a CA;

the importance of the applicative nature of ethics in accounting which may be

included in all or most of the supportive subjects within the field of accounting;

the advantages of a CPD approach to the teaching of ethics; and

the organising principles that may be used to entrench the CPD of ethics

amongst prospective CAs.

1.4 AIM OF THIS STUDY

This study aims to investigate the utilisation of the CPD of ethics amongst prospective

CAs.

Even though CPD is an aspect normally associated with qualified CAs, the

initiative is that an undergraduate learner (i.e. the prospective CA) should be

Introduction

CHAPTER 1 7

trained and become skilled in utilising this important work-related function.

This study will investigate, by way of thorough research, each of these issues in order

to come to a conclusion regarding its possible contribution to the outcomes envisaged

by the National Education Policy Act of 1996 to be achieved in conjunction with

prescriptions by various bodies and institutes affiliated with the education and training

of CAs.

1.5 OBJECTIVES

1.5.1 Issues addressed in the study

Issues to be addressed in this study will include:

researching the background to the CA and auditing professions in South Africa;

specifically emphasising (i) the role of CPD; and (ii) the ethical values

underpinning the education of prospective CAs as an indicator of professional

and ethical behaviour after the conclusion of the initial education of the CA;

proving the link between CPD and the various vehicles of achieving it (i.e. LLL,

SDL, and PBL); and

establishing the advantage of utilising CPD of ethics amongst prospective CAs

(i.e. at undergraduate level).

1.5.2 Specific objectives of the study

The objectives of this study are, by way of an empirical survey, to:

(i) demarcate the CA and the profession by way of undergraduate students’

perceptions;

(ii) determine undergraduate students’ perceptions of CPD, LLL and ethics within the

framework of a CA and their undergraduate education;


Introduction

CHAPTER 1 8

(iv) analyse certain aspects of the education and training of CAs at the Rand

Afrikaans University (hereafter RAU).

1.5.3 Demarcation of study

All of the above will be researched within the:

(i) international framework of education and training of CAs set by IFAC;

(ii) general legal framework of education and training in the country;

(iii) vision and standards of the South African Qualifications Framework through the

South African Qualification Authority (hereafter SAQA) and the National

Qualifications Framework (hereafter NQF); and

(iv) framework for training of CAs set by the South African Institute for Chartered

Accountants (hereafter SAICA) and the Public Accountants’ and Auditors’ Board

(hereafter PAAB) which was succeeded by the Independent Regulatory Board for

Auditors (hereafter IRBA).

1.6 RESEARCH METHODOLOGY

For the purpose of this study, a mixed research paradigm will be employed. Grounded

theory, as a phenomenological research paradigm, will be used within this study to

describe the world of the prospective CA. As a definition one may state that grounded

theory “... uses a systematic set of procedures to develop an inductively derived theory

about a phenomenon” (Collis & Hussey, 2003: 73).

The ‘systematic set of procedures’ mentioned above will be gained from a positivistic

research paradigm, where a descriptive, quantitative empirical study of third-year B

Com Accounting students at RAU will be conducted via a questionnaire. Information

obtained from the questionnaires will be analysed by providing a descriptive and

exploratory analysis of the data. This will then be followed by conducting a factor

analysis of the items in each section using the principal axis method of factor extraction

with Varimax rotation and Kaizer Normalisation.

Introduction

CHAPTER 1 9

If the Kaiser-Meyer-Olkin Measure of Sampling Adequacy and Bartlett’s Test of

Sphericity indicate that various statistically significant factors can be extracted, an item

analysis will be performed on each. Appropriate factor scores will also be calculated

and interpreted, which will in turn be used to develop certain hypotheses. These will

then be tested using the t-test for independent samples.

In cases where factor analysis cannot provide adequate information to continue with

the calculation of factor scores and interpretation of factor items, the Mann-Whitney U

Test will be used to test differences between two independent groups as part of the

hypothesis testing.

Both research paradigms will be complemented with an in-depth literature study

describing the issues to be tested.

1.7 SCOPE OF THE STUDY

In order to demarcate the scope of the study in detail, the following aspects need to be

taken into consideration:

1.7.1 Rand Afrikaans University

An empirical analysis was performed in the latter part of 2004 on students at the then

RAU. In 2004 the Vista University campuses of Soweto and the East Rand were

incorporated into RAU. In 2005, the university merged with Technikon Witwatersrand

and became a so-called comprehensive institution known as the University of

Johannesburg or UJ. For the purposes of this study mention will however only be made

to RAU.

1.7.2 Learners and students

Although mention is made of the term student(s) in this study, one has to remember

that current South African education legislation rather refers to them as learners.

There is general agreement, however, that the term student is more appropriate at a

Introduction

CHAPTER 1 10

higher education level than learner and both these terms will be used interchangeably

in the study.

1.7.3 Undergraduate students

Although mention will be made of CPD of professional CAs (i.e. fully qualified CAs), one

has to take cognisance of the fact that the focus of this study will predominantly be on

prospective CAs (i.e. CA students at an undergraduate level at a residential university).

For the purposes of the empirical analysis, a group of third-year students with the

following characteristics from RAU were used as respondents:

they all had to be at third-year level in the prescribed four major subjects (i.e.

Accounting, Auditing, Financial Management and Taxation);

no students repeating any of the subjects were considered; and

they had to have the intention of continuing with an honours degree in

accounting the following year.

1.7.4 Educator and teacher

For the purpose of this study both the terms ‘educator’ and ‘teacher’ should be read

interchangeably with the term ‘lecturer’ – all of these should, for the purposes of this

study, be seen as someone specialising in educating/teaching undergraduate learners.

1.7.5 Continuous professional development

Throughout this study the abbreviation CPD will refer to continuous professional

development. However, one has to take into consideration that international sources

sometimes use the term continuing professional development and/or continued

professional education meaning the same as CPD for the purposes of this study.

Once again it should be emphasised that even though CPD is a post-qualification

function, the aim of this study is to investigate CPD with respect to teaching prospective

CAs (i.e. undergraduate students) the necessary skills to empower them to use and get

acquainted with the skills needed for CPD by way of SDL and PBL before qualifying as a

Introduction

CHAPTER 1 11

CA.

1.7.6 Education and training

Even though the literature refers to the education and training of CAs, this study

focuses on the education phase (i.e. before qualification) and not on the training phase

(i.e. after qualification) of the CA.

1.7.7 Professional accountants

Throughout this study the term ‘chartered accountant’ or ‘CA’ should be seen as an

example of a (registered) professional accountant. The empirical study to be discussed

in Chapter 7, however, focuses only on prospective CAs in their final or third year of

undergraduate studies (see 1.7.3 above).

1.7.8 Public Accountants’ and Auditors’ Board

With the signing of the new Auditing Profession Act, the Independent Regulatory Board

for Auditors or IRBA became the successor body to the Public Accountants’ and

Auditors’ Board or PAAB as of 1 April 2006. As the scope of this study only extends to

31 March 2006, mention will throughout be made to PAAB and not necessarily to IRBA.

1.8 CONTENTS OF THE STUDY

Chapter 2 of the study will commence by demarcating an educational framework for

the training of CAs nationally and internationally. As this chapter is very important in

setting the scene for what is to come, it will not only focus on the current state of

higher education in South Africa, but will also address the state of accounting education

with a focus on the dynamic nature of the accounting profession and the link to the

education and training of accountants worldwide. The standards used in the delivery of

education programmes for CAs will be discussed on a national and international level

with a focus on the prescribed content of curricula pertaining to the required knowledge

and skills.

Introduction

CHAPTER 1 12

In Chapter 3 the reader will be provided with a detailed discussion of the concept of

CPD but focusing on the use of SDL and PBL as a vehicle for CPD. This chapter will

also focus on the skills needed for CPD pertaining to a CA after qualification and how

these can be used in an undergraduate higher education environment (see section

1.7.7).

Chapters 4 and 5 of the study both deal with ethics. In Chapter 4 a holistic critique of

ethics is provided. Ethics is a topic that is receiving a great deal of attention

throughout society today. This attention is indicative of both the importance of ethical

behaviour to maintain a civil society, and a significant number of notable instances of

unethical behaviour within the (chartered) accounting profession. Ethics will be

discussed with a focus on descriptive ethics, perspective ethics and meta-ethics. The

concepts of general and professional ethics will also be addressed before an

investigation of the narrower concept known as ‘business ethics’ is undertaken.

Chapter 5 then continues with a discussion of the teaching of business ethics at a

higher educational level.

After providing the detailed literature study of the CPD of prospective CAs but also the

issue of professional values, ethics and morals, Chapter 6 will provide the background

to the research methodology to be used in Chapter 7 to test, analyse and interpret

various items as part of an empirical study conducted by way of a survey amongst

undergraduate students at RAU.

Chapter 8 will take the results found within the empirical analysis and interpret the

attitudes of undergraduate students toward continuous professional development of

ethics. A detailed summary of the study will be provided in Chapter 9.

1.9 PLANNED CONTRIBUTION TO RESEARCH

As pressure is mounting to ‘reform’ the CA profession, the emphasis on ethics as a field

of study integrated within the education and training of CAs is also becoming more

important.

Introduction

CHAPTER 1 13

CPD contributes to the competence of CAs and therefore acceptable CPD activities are

expected to develop the professional knowledge, skills, values, ethics and attitudes of

the CA, relevant to their current and future work and professional responsibilities. CPD

is an important aspect in the post-qualification and training of various professionals

these days, including the training of CAs.

This study aims to (i) bridge the gap between CPD and the appropriate theoretical

ethical values surrounding it by practically determining the current attitudes and values

of learners at undergraduate level and proposing a way forward; and also (ii) to show

how the skills needed for CPD as a post-qualification function can be used in an

undergraduate learning environment.

---o0o---

14

CHAPTER 2 Demarcating an educational framework for the training of chartered accountants

nationally and internationally

2.1 INTRODUCTION

n order to promote the continued professional development of ethics amongst

prospective chartered accountants, one needs to understand the context in which

chartered accountants are educated and trained in this country.

To qualify as a chartered accountant (hereafter CA), one will need to acquire the

required professional and technical knowledge. Professional skills as well as

professional values, ethics and attitudes are also needed (IFAC, 2003a: 78). The

‘learning process’ does not stop there. The prospective CA needs to be able to

integrate these elements within the learning process (IFAC, 2003a: 48).

This chapter will commence with an overview of the South African educational

landscape but ultimately focus on issues pertaining to higher education and the training

and education of CAs in South Africa in terms of the National Qualifications Framework.

This will be followed by an historical overview of the CA profession in South Africa

including a view into a future featuring proposed changes prescribed by the newly

enacted Auditing Profession Act and the restructuring of the accounting profession in

South Africa.

I

Demarcating an educational framework for the training of chartered accountants nationally and internationally

CHAPTER 2 15

An assessment of the state of accounting education will be provided with a focus on the

dynamic nature of the accounting profession and the link to the education and training

of accountants worldwide. Before a discussion of the training of CAs is begun, an

overview of the international Education Standards as prescribed by IFAC will be

provided. Mention will also be made of the various definitions of the various terms and

conditions used within these Standards.

Following the discussion on the International Standards, the delivery of training

programmes for CAs will be discussed on a national and international level with a focus

on the prescribed content of curricula pertaining to the required knowledge and skills.

This chapter will conclude with an overview of national Education Standards for the

training of CAs as prescribed by the South African Institute of Chartered Accountants

(hereafter SAICA) with special mention of the role that the Public Accountants’ and

Auditors’ Board (hereafter PAAB) plays and the interaction with IFAC.

2.2 AN OVERVIEW OF THE EDUCATIONAL LANDSCAPE IN SOUTH AFRICA

Over the past ten years the standard of education at the secondary level has become a

major discussion point on the agendas of many national higher education institutions as

the throughput of undergraduates can all be traced back to the educational foundation

laid during their primary and secondary schooling years.

This section of the thesis will provide the reader with a summarised view of what has

happened in the educational landscape in South Africa since 1994. It also proposes to

put into context important issues related to the educating and training of prospective

CAs in South Africa.

2.2.1 Introduction

The year 1994 will forever be remembered as the time when South Africa became a

truly democratic society. Since then, the restructuring of all levels of the national


CHAPTER 2 16

educational system has been a top priority of national government.

Prior to 1994, the provision of a quality educational system had for many years been a

top priority for the government of the day, albeit not a truly democratic one. The

fundamental problem was however that this priority extended to the education and

training of the minority white population in the country only, while quality education

and training was denied many South Africans, based on the colour of their skin. This

eventually led to massive protest action from the majority of the populace commencing

with the now famous 1976 uprising in Soweto. As quickly as government tried to quash

protest in one area, it would fuel protest in another. For 18 years our country was

characterised as politically unstable with the rest of the world wanting nothing to do

with us. In the early nineties things changed dramatically as the then government

sought ways and means to overcome our problems of the past, culminating in our first

democratic elections in 1994.

2.2.2 Primary and Secondary Education and Training

2.2.2.1 White Paper 1

Following the elections in 1994, the publication of the White Paper on Education and

Training (RSA, 1995a: 5) was the first policy document that ushered in a new era in

education and training in South Africa. In it, the Minister of Education reiterated the

central problem facing education and training in South Africa: “... South Africa has

never had a truly national [inclusive and democratic] system of education and training”.

The Minister of Education was adamant that the proposed new education system should

redress the legacies of the past by providing equal opportunities for and access to

education and training for all learners of this country.

The White Paper on Education and Training (RSA, 1995a: 21-23) contained the most

important policy initiatives for a new education system in South Africa. The issues

raised and principles and values mentioned included the point that education and

training should support lifelong learning (hereafter LLL) with a stimulation of


CHAPTER 2 17

independent and critical thought (Van Wyk & Mothata, 1999: 3-5).

The first White Paper eventually culminated in the National Education Policy Act, 27 of

1996 (Van Wyk & Mothata, 1999: 7) and was published in the Government Gazette on

24 April 1996 (RSA, 1996b).


In February 1996, a second White Paper on Education (RSA, 1996a), entitled The

organization, governance and funding of schools, was released. The principles

underpinning White Paper 2 were built on those set out in the first White Paper (Van

Wyk & Mothata, 1999: 5/6) and eventually passed as Act 84 of 1996 (RSA, 1996c),

known as the South African Schools Act.

The various changes that came about in the country’s secondary education and training

environment as a result of the publication of these two White Papers have borne fruit,

taking into account the 26,4% net increase in the overall pass rate of learners in the

Senior Certificate Examination from 1993 to 2003 (Department of Education (hereafter

DoE), 2005: 25).

2.2.3 Higher Education and Training

The origins of the institutional structure of the higher education system prior to 1994

can be traced to the geopolitical imagination of apartheid’s master planner, Hendrik F

Verwoerd, and his reactionary ideological vision of ‘separate but equal development’.

Many higher education institutions restricted access along racial and ethnic lines, which

was far from the universal idea of access to higher education being extended on the

basis of agreed-upon higher education values. These institutions eventually became

hotbeds of student resistance, which ultimately contributed to apartheid’s demise (DoE,

2002).


The Education White Paper 3, entitled A programme for the transformation of higher

education (RSA, 1997a), was the culmination of a wide-ranging and extensive process


CHAPTER 2 18

of investigation and consultation which had been initiated with the establishment of the

National Commission on Higher Education in February 1995 (Van Wyk & Mothata, 1999:

6) that sets out the needs and challenges of higher education. These included inter

alia:

an inadequate distribution of access and opportunity for students along the lines

of race, gender, class and geography;

a shortage of trained graduates in fields such as science, engineering,

technology and commerce;

an inability to lay the foundations of a critical civil society with a culture of public

debate and tolerance which accommodates differences and competing interests;

and

a tendency for teaching and research policies to favour academic narrow-

mindedness and closed-system disciplinary programmes (Van Wyk & Mothata,

1999: 6/7).

2.2.3.2 Higher Education Act

The Higher Education Act, 101 of 1997, (RSA, 1997b), based on the principles set out in

White Paper 3, relates to aspects dealing with higher education institutions and inter

alia aimed to:

regulate higher education within the country;

provide for the establishment, composition and functions of a Council on Higher

Education (hereafter CHE);

provide for the establishment, governance and funding of public higher

education institutions; and

provide for quality assurance and quality promotions in higher education (Van

Wyk & Mothata, 1999: 9).

2.2.3.3 National Plan for Higher Education

The National Plan for Higher Education (DoE, 2001) provided the strategic framework

within which the national system of higher education was re-engineered to meet the


CHAPTER 2 19

demands of the 21st century. This plan identified policy goals and strategic objectives,

which are critical for the transformation and reconstruction of the higher education

system. These are to:

promote equity of access and outcomes and to redress past inequalities;

ensure diversity in the institutional landscape of the higher education system

through mission and programme differentiation to meet national and regional

skills and knowledge needs;

build high-level research capacity and promote research linked to national

development needs; and

build new institutional identities and organisational forms through restructuring

the institutional landscape of the higher education system (DoE, 2001).

Further goals included expanding general access to higher education from 15% to 20%

over a ten- to fifteen-year period, as it is necessary to address the imperative for equity

and the need for high-level professional and managerial skills (DoE, 2004).

In the short term, the focus would be on improving the efficiency of the higher

education system in producing graduates. The most recent national available

graduation (throughput) rate of 15% per annum is well below that of a normal system,

which should be graduating about 30% of enrolled students annually. The National

Plan established graduation rate targets that institutions would have to meet (DoE,

2004). In practice the student throughput required by government at higher education

institutions is not in reality attainable due to some major schooling gaps in the

education and training of undergraduate students.

Since 1997, numerous other reports on higher education in South Africa have been

issued. The most important of these, and following on the promulgation of the Higher

Education Act, must be a report highlighting a new institutional landscape for the

various higher education institutions in South Africa (DoE, 2001) known as the Higher

Education Qualifications Framework.


CHAPTER 2 20

2.2.3.4 Higher Education Qualifications Framework

For many years, separate and parallel qualifications structures for universities and

technikons hindered articulation and transfer between institutions and programmes. As

part of the National Plan for Higher Education, a consolidation of the number of higher

education institutions from 36 to 21 was proposed. This meant that certain universities

and technikons had to merge to become ‘comprehensive institutions’ (DoE, 2001).

These major changes to the higher education landscape were followed by the

publication of a document in July 2004, as a direct result of the Higher Education Act,

dealing with the Higher Education Qualifications Framework (RSA, 2004), that proposed

a single qualifications framework for all higher education qualifications in line with the

National Qualifications Framework (hereafter NQF), which establishes common

parameters and criteria for qualifications design. The proposed higher education

qualifications framework is essentially complementary to the National Plan for Higher

Education.

2.2.4 National Qualifications Framework

2.2.4.1 Introduction

The establishment of the NQF was a key accomplishment of the first democratic

government in South Africa where a new structure was designed with the aim of

improving the quality of education in South Africa (Mothata, 1999: 18).

The South African Qualifications Authority Act, Act 58 of 1995 (RSA, 1995b) established

The South African Qualifications Authority (hereafter SAQA) with a mandate to oversee

the development and implementation of an integrated framework of quality-assured

learning achievement (Mothata, 1999: 14; DoE, 2003: 1) that would:

facilitate access, mobility and progression within education, training and

employment;

enhance the quality of education and training;

accelerate redress of education and job opportunities; and


CHAPTER 2 21

advocate personal, social and economic development.

2.2.4.2 The NQF Structure

The NQF is a framework for the provision of LLL opportunities in accordance with

nationally agreed qualifications levels. It consists of a classification of standards and

qualifications that may be formally, non-formally or informally obtained in this country

(Mothata, 1999: 18/19). As a detailed discussion of the NQF Structure does not fall

within the scope of this study, a mere indication of the structure will be given in TABLE

2.1.

Following the Consultative Document of the Departments of Education and Labour

(DoE, 2003) in which some of the proposals of the Study Team on the Implementation

of the National Qualifications Framework System (DoE, 2002) were incorporated, a

revised NQF is awaited (DoE, 2003: 17). The Minister of Education published a draft

discussion document to this effect in July 2004. It is foreseen that a new integrated

qualifications framework will be developed for all higher education qualifications in line

with the NQF in the near future (RSA, 2004: 3).

It has to be noted that, as at 31 March 2006, nothing has been forthcoming from

Government.

2.2.4.3 The training of chartered accountants and the NQF structure

In South Africa, the advent of an outcomes-based NQF has given substance to a

threefold conception of competence including knowledge, skills and values (Prozesky,

2001: 10).

Members of any profession have knowledge and skills that are grounded in tradition

and science. Some professions, like law, are grounded, in the main, in tradition, while

others, like medicine, place a stronger emphasis on science. Accounting draws in

roughly equal measure on both science and tradition. The scientific methods and

practices of accounting are transmitted through formal qualification-based training,

while the traditions are learnt mainly through apprenticeship (Prozesky, 2001: 10/11).


CHAPTER 2 22

TABLE 2.1: National Qualifications Framework Structure

NQF Level Learning Band Types of Qualifications and Certificates

8 Doctorates Further Research Degrees

7 Higher Degrees Professional Qualifications

6 First degrees Higher Diplomas

5

Higher Education and Training Band

(HET)

Diplomas Occupational Certificates

4 School/College/Training Certificates Mix of unit credits from all

3 School/College/Training Certificates Mix of unit credits from all

2

Further Education and Training Band

(FET) School/College/Training Certificates Mix of unit credits from all

Senior Phase Grades 7 – 9

Adult Basic Education and Training (ABET)Level 4

Intermediate Phase Grades 4 – 5


Foundation Phase Grades 1 – 3


1

General Education and Training Band

(GET) Pre-school Grade R


SOURCE: Mothata, 1999: 19

Although the education of CAs in South Africa will be discussed in section 2.7, it is

important to point out that the national training of CAs does not specifically fall within

any single NQF level, as the training of CAs is seen as general in nature. For a student

to gain entry to the professional qualification examinations, the student needs to have

successfully completed an honours degree or equivalent qualification in accounting (e.g.

the Certificate in the Theory of Accounting or CTA level at RAU). This honours degree

or equivalent qualification currently falls within the NQF-level 7.

Before a detailed comparison of the international and national training requirements of

CAs follows, it may be worthwhile to understand how this profession has come to be

such an important one in South Africa.


CHAPTER 2 23

2.3 AN OVERVIEW OF THE CHARTERED ACCOUNTING PROFESSION IN SOUTH AFRICA

2.3.1 A historical overview

The history of the accounting profession in South Africa is illustrated by way of the

timeline in FIGURE 2.1. The discussion hereafter will refer back to the timeline

supplying additional information and highlighting certain aspects of it. Various

milestones have been indicated in brackets for easy referencing.

The formative period of the accounting profession in South Africa commenced in 1893

when the first organised body of accountants in the country was established in the

Transvaal under the name of the Institute of Accountants and Auditors in the South

African Republic (1).

The founder members were almost exclusively members of the Institute of Chartered

Accountants in England and Wales (established in 1880) and of the Society of

Incorporated Accountants and Auditors (established in the United Kingdom in 1885)

(SAICA, 2004b). This was followed, in 1894/95, by the establishment of The Institute

of Accountants in what was then Natal (2) (Puttick & Van Esch, 2004: 4).

Another body, the Institute of Chartered Accountants in South Africa, came into being

after the Anglo–Boer war in 1902 (3) and the first provincial society was formed in 1904

when Transvaal members of the existing bodies combined to establish the Transvaal

Society of Accountants (4) (SAICA, 2004b).


CHAPTER 2 24

1890 1928

1893 1894

1902Institute of Chartered Accountants

in South Africa(3)

1923Union Accountants’

Registration Bill

1905Transvaal Society

of Accountants(4)

1912Union Accountants’

Registration BillNatal Society

of Accountants(2)

1907Cape Society of

Accountants and Auditors

1921South African Accountants

Societies’ GeneralExamining Board

(5)

1908Society of Accountants

and Auditors in theOrange Free State

1914 - 1919World War I

Institute of Accountantsand Auditors in the

South African Republic(1)

1926Companies Act

1927The Chartered Accountants’Designation Act, 13 of 1927

(6)

1939 - 1945World War II

1947Draft Bill based on

AccountancyCommission Bill

1946The Joint Societies

of Chartered Accountantsof South Africa

(7)

1936Accountancy

Profession Commission

1951Public Accountants’ andAuditors’ Act, 51 of 1951

(9)

1934Private Member’s Bill 1949

Draft Auditing Act

1966The National Council

of Chartered Accountants (SA)(8)

1939Private Member’s Bill

1929 1967

1968 2006

1994First Democratic Election

in South Africa

1970Bowsher Commission on

Provincial Societies(10)

1980Formation of SAICA

(11)

2002Reconstitution

of IAASB

1976Commission of Enquiry into

Accountancy Profession2006

Auditing ProfessionAct, 26 of 2005

(15)

1991Revision of

Public Accountants’and Auditors’ Act, 80 of 1991

(12)2002

Setting of AuditingStandards transferred from SAICA to PAAB

2006Establishment

of IRBA(16)

1977Formation of IFAC

1973Companies Act

1994FAESA Report

(13)

1999Formation of EDCO

(14)

FIGURE 2.1: The historical development of the Accounting Profession in South Africa

SOURCES: Puttick & Van Esch, 2004: 4-22; SAICA, 2004a, 2004b, 2004c, 2004d; RSA, 2006


CHAPTER 2 25

The establishment of the Transvaal Society was done by way of passing a provincial

ordinance (Puttick & Van Esch, 2004: 4). The Natal Society of Accountants came into

existence in 1909, as a result of similar legislation. No such legislation existed in the

Cape Province or in the Orange Free State, but societies were voluntarily formed there

(Puttick & Van Esch, 2004: 4).

Societies in each of the then four provinces of South Africa worked towards the goal of

unification of the profession and in 1921 established the South African Accountants

Societies' General Examining Board (5), with provision for uniform conditions of

admission, examinations and regulations for service under articles (SAICA, 2004b).

The exclusive right to the use of the designation ‘Chartered Accountant (South Africa)’

was conferred on members of the four provincial societies by the Chartered

Accountants Designation (Private) Act 13 of 1927 (6) (SAICA, 2004b).

Adoption of uniform by-laws by the provincial societies followed. Five years’ service

under articles was compulsory after February 1934 with a remission of two years for

graduates of a recognised university (SAICA, 2004b).

Then in 1946 the Joint Council of Societies of Chartered Accountants of South Africa

was formed to deal with professional matters at national level (7). It was renamed the

National Council of Chartered Accountants (SA) in 1966 (8). This body greatly

contributed to the enhancement of the status and image of the profession in South

Africa (SAICA, 2004b).

From 1934 to 1950, several abortive attempts were made to introduce controlling

legislation. Eventually, in March 1950, Joint Council submitted a draft bill, which was

accepted by the Treasury (Minister of Finance) and received the unanimous support of

the entire South African profession. The bill was enacted on 18 June 1951 as the Public

Accountants' and Auditors' Act (PAA) 51 of 1951, which came into operation on

1 November 1951 (9) (SAICA, 2004b).


CHAPTER 2 26

The Act provided for the establishment of a register of public accountants and auditors

who were entitled to engage in public practice and describe themselves as Registered

Accountants and Auditors. It further provided for the establishment of the PAAB, the

registration and control of articled clerks and for conducting of examinations.

Significantly, the Act established the right of all who passed the QE to be admitted to

one of the provincial societies and thereby to acquire the right to the designation

‘Chartered Accountant (SA)’ (Puttick & Van Esch, 2004: 8).

In 1956 the General Examining Board ceased to exist and its functions were from then

onwards undertaken by the PAAB, with the universities providing education to the level

of the Certificate in the Theory of Accountancy, which certificate (or equivalent) is the

entry requirement for the qualifying examination set by the PAAB (SAICA, 2004b).

In 1970, the National Council appointed Mr LF Bowsher to investigate the desirability of

a national society of CAs (10). He recommended that a national society be formed,

that it should take over all the assets and liabilities of the provincial societies, of their

benevolent funds (in trust) and of National Council and that thereafter the four

provincial societies should be dissolved.

These recommendations were not accepted but a National Society Committee consisting

of one representative from each province was nevertheless established as

recommended by Mr Bowsher. This National Society Committee had to:

monitor the progress of the establishment of regional associations; and

work towards the ultimate creation of a national society (SAICA, 2004b).

In 1978, that committee recommended the creation of a national institute without the

dissolution of the provincial societies as a step towards the unification of the profession.

At a meeting held on 12 February 1980, National Council was dissolved and the South

African Institute of Chartered Accountants (11) was established retrospective to

1 January 1980. At that time it had a membership of 9 012 members, of which just

over 2 800 were in public practice (SAICA, 2004b).


CHAPTER 2 27

From that time onwards, the PAAB has continued as the statutory regulatory body

looking after the public interest whereas SAICA has operated as the body servicing the

needs of its members. The Public Accountants' and Auditors' Act was revised in 1991

but the new Act was substantially the same as the 1951 Act (12) (SAICA, 2004b).

In 1990 the accounting profession commissioned a study, known as the Future of

Accounting Education in South Africa Project (hereafter FAESA), to consider the

restructuring of the profession to facilitate broader membership (Rowlands, Prinsloo &

Van Vuuren, 1998: 229; Puttick & Van Esch, 2004: 14).

Following the FAESA Report in 1994 (13), certain recommendations relating to

education and training at each tier of the profession were made. These addressed not

only the perceived technical and professional requirements of the South African

economy but also the articulation needs implicit in the notion of mobility within the tiers

(Rowlands, Prinsloo & Van Vuuren, 1998: 229-230).

The tiered structure of the profession with its characteristics of mobility is entirely

consistent with the principles of the National Qualifications Framework (NQF) (Human

Sciences and Research Council, 1995 quoted by Rowlands et al., 1998: 231). In this

context, the tiered structure refers to the mobility of accounting professionals. Mobility

within the tiered structures implies that an accountant registered at a particular tier has

the opportunity and right to enter the educational programme at the next highest tier

and in this way progress as far as his/her potential and desire to succeed dictate.

In 1999, the PAAB appointed a Director of Education and established an Education

Committee to develop and implement a recognition model and monitoring process to

oversee compliance by those institutes whose members become eligible to write the

Professional Practice Examination (hereafter PPE).

As the regulatory body for the auditing profession, the PAAB Education Committee

retains responsibility for the setting and adjudication of the PPE. As a result of these

changes, the Director of Education and staff in the education division of the PAAB


CHAPTER 2 28

transferred to SAICA to form a new education division called Education and Training in

1999 (14). Education and Training retained responsibility inter alia for the academic

programme (CTA or equivalent); the setting and adjudication of the core assessment

programme namely the ‘Qualifying Examination (QE Part 1); and the setting and

adjudication of the Financial Specialism Examination (QE Part 2) (Puttick & Van Esch,

2004: 7/8).

A major change to the accounting profession has come about with the signing of the

new Auditing Profession Act (Act 26 of 2005) on 16 January 2006 (15) (RSA, 2006).

This new Act became effective as of 1 April 2006 following a publication in the

Government Gazette (PAAB, 2006b).

However, the implementation of the Act will follow a 9-month phased-in approach in

terms of the implementation plan that PAAB submitted to the National Treasury. This

plan sets out the dates when the various sections of the legislation will be phased in

(PAAB, 2006c).

This new legislation establishes a new juristic person to be known as the Independent

Regulatory Board for Auditors (16), the successor body to the PAAB, which will regulate

the auditing profession. While the IRBA will have similar functions to that of the PAAB,

it is intended to be more independent of the profession (PAAB, 2006a; 2006b). The

restructuring of the accounting profession will be dealt with in section 2.3.4 of this

thesis.

2.3.2 A current overview

2.3.2.1 Background on transformation

The acute shortage of qualified black CAs in South Africa has been the catalyst for

many educational and upliftment initiatives over the past years. The accounting

profession, and particularly SAICA, has over the past 18 years been running numerous

programmes to assist learners from disadvantaged backgrounds with entry into the

profession. Most of these programmes have focused on the higher education level.


CHAPTER 2 29

For many years, however, the main problem has been the way that these programmes

have been organised. There was no comprehensive and all-inclusive approach to these

upliftment and equity programmes (Els, 2004). It accordingly became evident that if

SAICA, and in the broader sense, the profession, were serious about taking accounting

to the nation and more so, to ensure that the membership of SAICA will reflect the

demographics of the South African population, the introduction of a comprehensive

approach was crucial.

It was thus decided to have upliftment programmes introduced at school and tertiary

level where appropriate. In addition, an extensive career-awareness programme

needed to be undertaken. As SAICA was already working with the University of Fort

Hare, it became evident that the first targeted area for this upliftment project should be

the Eastern Cape (SAICA, 2002a: 4). This project, funded by the Fasset SETA, the

National Skills Fund, the Department of Labour and the service provider PMG2 Education

(Pty) Ltd, is known as Thuthuka - a Zulu word meaning, “to develop” (Els, 2004).

The success of the Thuthuka Project continues and is enjoying widening acclaim. Over

the past five years the Thuthuka school programme reached over 20 000 learners and

6 000 teachers. In addition, the university assistance programme has been extended to

the University of Limpopo and now benefits nearly 500 students. The results at both

the University of Limpopo and Fort Hare were outstanding. Students at these

universities performed better than their counterparts at the University of Johannesburg

whilst writing the same examinations (SAICA, 2004e: 3).

2.3.2.2 Some statistical evidence

The shortage of black CAs in South Africa has been a major cause for concern for a

long time. SAICA set itself a target of 3 000 black CAs by 2005 (Mulder, 2003). From

1999 to 2005 there has been a 29.46% increase in the total number of CAs registered

with SAICA. The same cannot be said of the number of black accountants, however

(SAICA, 2003b; 2005b).

In FIGURE 2.2 below one can see that the percentage of white CAs still outnumbers


CHAPTER 2 30

the overall percentage of ‘black’ CAs by a ratio of nearly 9.8:1. On the gender front

(FIGURE 2.3) it also looks very bleak, with females still being in the minority.

0

5000

10000

15000

20000

25000

Num

ber o

f reg

iste

red

CA

s

2001 2002 2003 2004 2005 2006

White Black Coloured Indian

FIGURE 2.2: Total number of registered of CAs per race, 2001 – 2006*

SOURCES: SAICA, 2004f, 2005b, 2006b, 2006c

* Average per annum, 2006 based on January and February figures only

SAICA’s transformation initiatives are showing strong and visible signs of progress.

Strong growth occurred amongst the black female CAs, where there has been a 148.5%

increase since 2002.


CHAPTER 2 31

0

2000

4000

6000

8000

10000

12000

14000

16000

18000

20000N

umbe

r of r

egsi

tere

d C

As

M F M F M F M F M F

2002 2003 2004 2005 2006

White Black Coloured Indian

FIGURE 2.3: Number of registered CAs per race and gender, 2002 – 2006*

SOURCES: SAICA, 2004f, 2005b, 2006a, 2006b, 2006c * Average per annum, 2006 based on January and February figures only

Since 2002, SAICA’s black membership has grown by 60.45% to 2 442 members. From

FIGURE 2.4 (on the following page) one can also see that the growth amongst black

CAs has been excellent with a general upward trend. Growth in the number of white

CAs also occurred, but at a slower rate.

However, if one looks at the pass rate of black CAs, the picture does not look that

good. In 2005 only 26.52% or 245 of the African black candidates passed the QE 1 of

SAICA. And of all the ‘black’ candidates, only 28.15% passed compared to the 71.85%

of ‘white’ candidates (SAICA, 2005a).


CHAPTER 2 32

0

200

400

600

800

1000

1200

1400

1600

1800

2002 2003 2004 2005 2006

Num

ber o

f reg

iste

red

'Bla

ck' C

As

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%Percentage grow

th

Black Coloured Indian White % Black %

FIGURE 2.4: Number of registered black CAs and growth amongst black and white CAs,

2002 – 2006*

SOURCES: SAICA, 2004f, 2005b, 2006b, 2006c * Average per annum, 2006 based on January and February figures only

In terms of the 2005 Public Practice Examination (hereafter PPE) of the PAAB, 424 or

56.75% of the 747 Black African, Coloured and Indian candidates who wrote the exam

passed. Increasing the number of black accountants and auditors is a national

imperative and the PAAB, SAICA, accredited universities and professional firms are

working aggressively to address this (PAAB, 2006d).

One such special initiative of the PAAB and the Fasset SETA is the implementation of a

Support Programme for black candidates who have been unsuccessful in previous

attempts to pass the PPE. Of the 117 black candidates who participated in and

completed the PAAB's programme 58 passed; this represents a pass rate of 49.57%.

The pass rate for Black repeat candidates who did not attend the Support Programme

was 42% (PAAB, 2006d).


CHAPTER 2 33

2.3.3 Roles and responsibilities of SAICA and PAAB

Confusion often arises regarding the differing roles and responsibilities of SAICA and

the PAAB. TABLE 2.2 clarifies the respective roles of the two bodies.

TABLE 2.2: The roles of SAICA and PAAB

SAICA PAAB

Introduction

Non-profit, voluntary body

Provides a wide range of services to its

members and associates

Statutory body that regulates the public audit

function in South Africa, and functions in terms

of the Public Accountants' and Auditors' Act,

1991 (Act 80 of 1991) as amended

Control

Controlled by a Board, elected by members

through regional committees, and by bodies

representing other key constituencies

Key constituencies include

o commerce and industry;

o large practices;

o small practices; and

o the Association for the Advancement of

Black Accountants in Southern Africa

The Minister of Finance appoints its members

Members come from

o state departments,

o the accounting profession nominated

by the regional committees; and

o academics nominated by the

Committee of University Principals

Mission

To serve the interests of the Chartered

Accounting profession and society, by upholding

professional standards and integrity, and the

pre-eminence of South African CAs nationally

and internationally, through:

o delivering competent entry level

members;

o providing services to assist members to

maintain and enhance their

professional competence thereby

enabling them to create value for their

clients and employers;

o enhancing the quality of information

used in the private and public sectors

for measuring and enhancing

To protect the financial interests of the people

of South Africa, and other stakeholders.

Strives towards the maintenance and

improvement of standards of Registered

Accountants and Auditors.

Achieved by providing the means and a

regulatory framework for the education and

training of adequate numbers of competent and

disciplined accountants and auditors to serve

the needs of South Africa.


CHAPTER 2 34

SAICA PAAB

organisational performance;

o running and facilitating programmes to

transform the profession and to

facilitate community upliftment; and

o fulfilling a leadership role regarding

relevant business-related issues and

providing reliable and respected public

commentary.

Education and training

Sets and adjudicates the [generic] qualifying

examination (QE Part 1) and the financial

management specialism examination in QE Part

2, for those trainees who have opted to take

the financial management route.

Exercises a monitoring role over the SAICA

public practice trainee and QE1 examination

processes.

Setting and marking the PPE for those trainees

choosing the public practice route.

Support

Provides technical support and continuing

professional education.

Disseminates and communicates the latest

information on technical developments to its

constituency

Conducts practice review investigations for

registered accountants and auditors.

Conducts disciplinary processes for registered

accountants and auditors.

Professional body

Registration of trainees and management of

their training contracts, either in public practice

(i.e. at a firm of approved registered

accountants and auditors) or outside public

practice (i.e. an organisation in either

commerce or industry or the public sector that

is registered as an approved provider).

After completing their training contract and

passing both QE1 and QE2 or PPE, candidates

are required to register with SAICA in order to

use the prestigious Chartered Accountant (CA

(SA)) designation.

Any person wishing to perform the attest

function must register.

SOURCES: SAICA, 2004c; 2004d; Prozesky, 2001: 11


CHAPTER 2 35

2.3.4 The restructuring of the accounting profession

2.3.4.1 Accounting Profession Bill

The restructuring process of the accounting profession was initiated by the PAAB in

1991 and culminated in 1997 in a proposed Act drafted by the Interim Representative

Council of Accountants. A tiered profession, under a co-ordinating structure of all

accounting institutes and accounting bodies, without compromising the independence

of the auditor, was envisaged. After much exposure and consultation with interested

parties, the co-ordinating committee drafted a revised Accountancy Profession Bill,

which was presented for comment in November 1999 (SAICA, 2004c).

As the Draft Bill was very different from the original, members of the PAAB, SAICA

(SAICA, 2004e: 2) and other interested parties formulated their comments and

submitted them to the National Accountancy Consultative Forum for consideration

(SAICA, 2004c).

The Act that came about as a result of the Bill has moved away from the broader

perspective of the professional accountant and focuses solely on the Auditor.

2.3.4.2 Audit Profession Act

The new Audit Profession Act of 2005 (RSA, 2006: 11) has as its objectives to:

protect the public in the Republic by regulating audits performed by registered

auditors;

provide for the establishment of an Independent Regulatory Board for Auditors;

improve the development and maintenance of internationally comparable ethical

standards and auditing standards for auditors that promote investment and as a

consequence employment in the Republic;

set out measures to advance the implementation of appropriate standards of

competence and good ethics in the auditing profession; and

provide for procedures for disciplinary action in respect of improper conduct.


CHAPTER 2 36

The Act sets out that the PAAB is replaced by a successor body, the Independent

Regulatory Board for Auditors (hereafter IRBA) (RSA, 2006: 11/12; 64). The IRBA will

be responsible for the regulation of the auditing arm of the profession through a

registration, accreditation and disciplinary process.

The Act furthermore proposes that the IRBA must, at least, establish the following

permanent committees:

a committee for auditor ethics in accordance with section 21;

a committee for auditing standards in accordance with section 22;

an education, training and professional development committee;

an inspection committee;

an investigating committee; and

a disciplinary committee (RSA, 2006: 24).

For the purposes of this study it may be useful to focus on the committee for auditor

ethics in accordance with section 21 of the Act (RSA, 2006: 25).

The committee for auditor ethics must consist of at least the following members

appointed by the IRBA (RSA, 2006: 25):

“… three registered auditors;

three persons representing users of audits;

one person representing an exchange which is the holder of a stock exchange

licence issued under the Securities Services Act, 2004 (Act 36 of 2004); and

one advocate or attorney with at least 10 years’ experience in the practice of

law.”

The committee for auditor ethics must assist the IRBA (RSA, 2006: 25):

in determining what constitutes improper conduct by registered auditors by

developing rules and guidelines for professional ethics, including a code of


CHAPTER 2 37

professional conduct;

by interacting on any matter relating to its functions and powers with

professional bodies and any other body or organ of state with an interest in the

auditing profession; and

by providing advice to registered auditors on matters of professional ethics and

conduct.

2.4 THE CHANGING FACE OF ACCOUNTING EDUCATION

2.4.1 Introduction

Historically, accounting has been looked upon as a profession that plays an important

role in all societies. Both Lehman (1992: 1) and Schoonraad (2004: 42) noted that the

influence of accounting as a subject spans the full range of one’s life experience, from

the mundane to the globally consequential. Rapid change has routinely been the

predominant characteristic of the environment in which CAs work (Nelson, 1995: 62).

As the world moves toward globalised market economies, and with investments and

operations crossing borders to an ever greater extent, CAs need a broad-based global

perspective to understand the context in which businesses and other organisations

operate.

2.4.2 The dynamic nature of the accounting environment

The changes and trends evident within the accounting profession lead to the need for

greater accountability and, as a result, demands on the profession are high and

continue to rise. It is the profession’s capacity to satisfy these demands that

determines its value to society, both nationally and trans-nationally.

These trends challenge CAs to make greater contributions to society than ever before,

and they also present a challenge to maintain competence. The viability of accounting

as a profession depends on the ability and willingness of its individual members to

accept responsibility for meeting these challenges.


CHAPTER 2 38

To meet these challenges, the profession (through the various professional bodies)

needs to ensure that individuals becoming CAs achieve an agreed level of competence,

which is then maintained. The means by which individuals obtain competence is

through education and experience. The profession, therefore, needs to aspire to set

and meet high standards in both these areas (IFAC, 2003b: 7, 28). In these days and

times, a programme of accounting education and experience needs to go beyond the

traditional approach, which emphasised “transfer of knowledge”, with learning defined

and measured strictly in terms of knowledge of principles, standards, concepts, facts

and procedures at a given point in time.

2.4.3 Accounting education at higher education institutions

The literature is saturated with research that has been done on the accounting student

at tertiary institutions. Many higher education institutions around the world are

experiencing a decrease in the number of students who wish to study to become a CA

(Albrecht & Sack, 2001: 17). Moreover, many practising accountants and educators say

that they would not choose an accounting education if given the chance to do it again

(Albrecht & Sack, 2001: 17; Person, 2002: 84/85; Diller-Haas, 2004: 60). Albrecht and

Sack stated that: “This indicates a serious problem at the profession’s most vulnerable

point: the quality of its professionals ...” (2001: 16).

Bedford and Shenkir (1987: 86) stressed the shortcomings of accounting education in

the following scathing indictment: “Despite widespread complaints that accounting

graduates do not know how to communicate, do not reason logically, are deficient in

inter-personal skills, and cannot think creatively and responsibly, university education

has persisted in teaching the content of textbooks rather than developing students’

capabilities.” This notion was also expressed by Dempsey and Stegmann (2001: 16).

Over the past few years this notion may have changed more positively. Myers (2005:

109) found that changes may have occurred (even unnoticed) and students coming

from higher education institutions “... are smarter ... better educated today ...”

According to data compiled by the American Institute of Certified Public Accountants,


CHAPTER 2 39

undergraduate students opting for studies to become CAs increased by 6% from 2001

to 2002 (Myers, 2005: 111).

Educators delivering professional accounting education programmes will need to

respond to the changing needs of the international accounting profession, as well as

individual CAs (IFAC, 2003a: 33). During undergraduate education, teaching methods

should focus on providing students with the tools for self-directed learning after

qualification. Educators are free to adopt the methods that work best in their particular

cultures. However, educators may need to be trained and encouraged to use a broad

range of learner-centred teaching methods that include:

using case studies, projects and other means to simulate work situations;

working in groups;

adapting instructional methods and materials to the ever-changing environment

in which the CA operates;

pursuing a curriculum that encourages self-learning so that students learn to

learn on their own and carry this skill with them after qualification;

using technology and e-learning;

encouraging students to be active participants in the learning process;

using measurement and evaluation methods that reflect the changing

knowledge, skills, as well as professional values, ethics and attitudes required of

CAs;

integrating knowledge, skills, professional values, ethics and attitudes across

topics and disciplines to address the many-sided and complex situations typical

of professional demands;

emphasising problem-identification and problem-solving, which encourages

identifying relevant information, making logical assessments and communicating

clear conclusions;

exploring research findings; and

stimulating students to develop professional scepticism and professional

judgement (IFAC, 2003a: 33-34).


CHAPTER 2 40

Educational programmes need to include a reflective component where students are

required to consider an experience and the approach that should be taken in future in

similar circumstances. Achieving the goal of providing a foundation for LLL requires a

thorough grounding in the professional knowledge, skills and values, ethics and

attitudes essential to professional competency and this may need to be the focus of a

programme of professional accounting education.

2.5 INTERNATIONAL ACCOUNTING EDUCATION STANDARDS

2.5.1 Introduction

IFAC has developed International Education Standards for Professional Accountants

(hereafter IES). These Standards:

describe the scope of issues covered within them;

prescribe standards of generally accepted ‘good practice’ in the education and

development of CAs;

establish the essential elements of the content and process of education and

development at a level that is aimed at gaining international recognition,

acceptance and application;

discuss the ways in which they may be adopted and applied to the education

programmes of IFAC member bodies;

express the benchmarks that member bodies are expected to meet in the

preparation and continuous development of professional accountants; and

prescribe the learning and development requirements of CAs (IFAC, 2004a: 26,

31).

IESs cannot legally override local laws and regulations but will provide an authoritative

reference for informing and influencing local regulators regarding generally accepted

‘good practice.’


CHAPTER 2 41

All IFAC member bodies are expected to comply with IESs, and the Standards are

directed primarily at IFAC member bodies rather than individuals. Member bodies are

expected to use their best endeavours to:

work towards implementation of all IESs and other statements developed by the

IFAC Education Committee; and

incorporate in their education programmes the essential elements of the content

and process of education on which IESs are based (IFAC, 2003a: 26).

SAICA is a member body of IFAC. SAICA also contributed to the various Standards by

way of its membership of IFAC.

2.5.2 Definition of terminology

IFAC devised a glossary comprising a collection of defined terms, many of which have

been specifically defined within existing Education Committee statements.

Even though these terms have been defined within the parameters of the various

Education Standards, IFAC (2003a, 14) is of the opinion that “… terms may be

understood to have different common meanings, nuances of meaning, and applications

among the various countries in which member bodies operate”.

For the purposes of this study, only specific terms commonly used throughout the

Standards will be highlighted in TABLE A1 (APPENDIX A) at the end of this study.

Many of these terms will also be ‘redefined’ or put into a South African context for the

sake of clarity later, in this and other chapters of this study.

2.5.3 International Education Standards

The various International Education Standards issued by IFAC are indicated in FIGURE

2.5 below (IFAC, 2003a: 31).

In IES 2 - International Education Standards for Professional Accountants, IFAC (2003a:

30) determined a scope of international Education Standards.


CHAPTER 2 42

International Education Standards for Professional

Accountants (IES)

Scope Application

Entry requirements

(IES 1)

Professionaleducation

(IES 2)

Professional skills and general education

(IES 3)

Professional values and ethics

(IES 4)

Experience requirements

(IES 5)

Continuous Professional Development

(IES 7)

International Federation of Accountants

(IFAC)

Assessment of professional competence

(IES 6)

Competence Requirements for

Audit Professionals(IES 8)

FIGURE 2.5: International Education Standards

SOURCE: Own deductions

These Standards are intended to advance the accounting profession by establishing

benchmarks for the minimum learning requirements of qualified accountants, including

education, practical experience and continuing professional development (hereafter

CPD).

One of the aims of the IESs prescribed by IFAC (2003a: 30) is to identify the subject

areas that need to be covered, rather than to suggest actual courses that should be

taken. That is because the subjects identified are described differently in different parts

of the world. It is recognised that some member bodies require a greater range of

subjects; others may place greater emphasis on certain subjects to meet the specific

purposes for which their students are being trained.


CHAPTER 2 43

Even though IFAC uses IES 4 - Professional Values, Ethics and Attitudes to lay a

foundation for the member bodies with regards to ethics within the profession, IES 2 -

International Education Standards for Professional Accountants states that:

“Professional values, ethics and attitudes, however, run through all areas and may be

integrated with many of the other subjects” (IFAC, 2003a: 30).

One furthermore may argue that a so-called ‘one-size-fits-all’ approach to professional

values, ethics and attitudes may not be the best option when it comes to the education

of CAs in developing countries such as South Africa.

IFAC has made provision for such circumstances and states in the preamble to its

Standard detailing professional values, ethics and attitudes “… IFAC recognises that the

accounting profession throughout the world operates in environments with different

cultures and regulatory requirements. IFAC has, nevertheless, established an

international Code of Ethics for Professional Accountants. Professional values, ethics

and attitudes relate directly to IFAC’s mission to develop and enhance the profession to

enable it to provide services of consistently high quality in the public interest”. (IFAC,

2003a: 60) The issue of culture and ethics will be discussed in detail in Chapter 3 to

this study.

In providing for these Standards, IFAC went further and stipulated certain variables

within the standards. These are:

2.5.3.1 Education and practical experience needs

It is understood that the education and practical experience needs (as discussed in

section 2.4.3), as well as the institutional and cultural environment in different countries

and regions will differ. Those responsible for the development of accountants will need

to adapt their requirements to these needs. While IESs need to be complied with, it is

acknowledged that needs vary and the IESs may be complied with in a variety of

different but equivalent ways (IFAC, 2003a: 32).


CHAPTER 2 44

2.5.3.2 Dynamic profession

IFAC recognises that each professional body will need to determine not only how to

best comply with the IESs, but also what emphasis to place on the various parts

thereof. As the accounting profession is seen as dynamic in nature (as discussed in

section 2.4.2), care needs to be taken to continually monitor the environment in which

each body operates to ensure that the education process remains relevant and

professional values are upheld (IFAC, 2003a: 32).

2.5.3.3 Lifelong learning

Admission to membership of an IFAC member body is a recognition that, at a given

point in time, a person is deemed to have met the requirements for qualification as a

CA. In a time of continuous change (see section 2.4.2), however, development of

professional competence (IFAC, 2003b: 3) and LLL (IFAC, 2004a) is critical to meet the

needs of the users of professional services (IFAC, 2003a: 32).

2.5.3.4 Continuous professional development

The process of LLL commences early and continues throughout the individual’s career.

CPD may be seen as an extension of the education programme leading to qualification

as a CA, as was pointed out in section 2.4.3 of this thesis. The professional knowledge,

professional skills and professional values, ethics and attitudes gained continue to

develop and are refined appropriately for the professional activities and responsibilities

of the individual (IFAC, 2003a: 32/33; IFAC, 2004a: 3).

2.5.3.5 Competence assessment

Much work is being done on the emerging concept of competence assessment (IFAC,

2002a; IFAC, 2003a: 73). Member bodies need to have regard for the emerging

concept of competence and how it can best be incorporated into their own systems. To

demonstrate competence at work, CAs need to have a defined set of professional

knowledge, professional skills, professional values, ethics and attitudes. This set is wide

and is increasing (IFAC, 2003b: 4, 109-119).


CHAPTER 2 45

Competence is gained through a mix of study, work and training (as discussed in

section 2.4.3). Although the combination of these parts may vary, it should lead to

equally valid educational and practical experience programmes, which will develop the

required competence for the profession (IFAC, 2003a: 33).

2.6 PRESCRIBED CONTENT OF CHARTERED ACCOUNTANT EDUCATION PROGRAMMES – AN INTERNATIONAL PERSPECTIVE

2.6.1 Introduction

In the previous section it was indicated that, in the education of CAs, emphasis needs

to be placed on a set of knowledge, skills and professional values broad enough to

enable adaptation to constant change. It is furthermore important to note that the goal

of accounting education is to produce competent professional accountants.

This means that the education and training programme of a CA should consist of

professional knowledge, non-professional knowledge (i.e. skills) and general education.

The professional knowledge component complements the non-professional knowledge

as well as the intellectual, personal, interpersonal, communication, and organisational

and management skills developed in general education.

In order for a CA to operate effectively, with integrity and discernment in an

environment of change, IFAC prepared IES 4 - Professional values, ethics and attitudes

(IFAC, 2003a) to ensure that their members have a continuing understanding of

professional values, ethics and attitudes. This is furthermore augmented by IFAC,

highlighting the issues of CPD and LLL (IFAC, 2004a).

All these components are highlighted in FIGURE 2.6 below.


CHAPTER 2 46

Non-professionalknowledge component

(Skills)

(IES 3)

Promotion of lifelong learning

(IES 7)

Professional valuesand ethics

(IES 4)

General education component

(IES 1 & 3)

Continuous Professional Development (CPD)

(IES 7)

Professional knowledge component

(IES 2)

Education environment of a

charteredaccountant

FIGURE 2.6: Education environment of a chartered accountant


2.6.2 Education and training components

2.6.2.1 Professional knowledge component

a) Introduction

Before one examines the knowledge component in detail, one should take note of the

following aspects regarding professional accounting education stated in IES 2 - Content

of Professional Accounting Education Programs (IFAC, 2003a: 44):


CHAPTER 2 47

the professional accounting knowledge component of pre-qualification education

should consist of at least two years of full-time study (or the part-time

equivalent);

students should pursue a degree in accounting, or a professional qualification, to

gain this knowledge; and

students may take non-accounting degrees or no degrees at all, and then

acquire the necessary knowledge of professional accounting subjects through

studying for the examinations of a professional body.

The content of professional accounting education should consist of the following

knowledge components:

accounting, finance and related knowledge;

organisational and business knowledge; and

information technology knowledge and competences (IFAC, 2003a: 44).

The three knowledge areas are not set out to indicate relative importance or order.

The components listed above represent the minimum areas in professional accounting

education programmes. However, the relative depth and weighting of coverage will

depend on the needs of individual IFAC member bodies and any restrictions placed on

them by statutory authorities (IFAC, 2003a: 45).

The knowledge components prescribed above will be discussed in more detail later in

this section. The components discussed in this section of the chapter are not

necessarily intended to be completed in the order shown as long as the syllabus of the

professional body covers all of the subject content listed in this Standard (IFAC, 2003a:

44, 45).

In addition, the subjects and elements of the programme may be integrated, for

example, by incorporating aspects of IT knowledge in specific accounting courses. This

may assist the learning process and help candidates understand how the individual

components are interrelated (IFAC, 2003a: 44).


CHAPTER 2 48

The accounting curriculum is in itself also dynamic. In its Standard, IES 2, the IFAC

Education Committee (IFAC, 2003a: 45) stated, “… the [accounting] curricula is

changing and will continue to change in response to rapidly changing market demands.

New topics are entering the curriculum and the relative emphasis among topics is

altering. Member bodies may wish to add topics, or alter the balance of their

programmes to meet the needs of their particular environments”.

b) Content

(i) Accounting, finance and related knowledge

The accounting, finance and related knowledge component should include the following

areas:

financial accounting and reporting;

management accounting and control;

taxation;

business and commercial law;

audit and assurance;

finance and financial management; and

professional values and ethics (IFAC, 2003a: 46).

This component includes:

history of the accounting profession and accounting thought;

content, concepts, structure and meaning of reporting for organisational

operations, both for internal and external use, including the information needs of

financial decision makers and a critical assessment of the role of accounting

information in satisfying those needs;

national and international accounting and auditing standards;

the regulation of accounting;

management accounting, including planning and budgeting, cost management,

quality control, performance measurement, and benchmarking;


CHAPTER 2 49

the concepts, methods and processes of control that provide for the accuracy

and integrity of financial data and safeguarding of business assets;

taxation and its impact on financial and managerial decisions;

a knowledge of the corporate legal environment, including securities and

companies law, appropriate for the role of the profession in the particular

country;

the nature of auditing and other assurance services, including risk assessment

and fraud detection, and the intellectual and procedural bases for performing

them;

a knowledge of finance and financial management, including financial statement

analysis, financial instruments, capital markets (both domestic/national and

international) and managing resources;

ethical and professional responsibilities of a CA in relation to both the

professional and wider public environment which includes professional values,

ethics and attitudes;

governmental and not-for-profit accounting issues; and

the use of non-financial performance measures in business (IFAC, 2003a:

46/47).

(ii) Organisational and business knowledge

The organisational and business knowledge component should include the following

areas:

economics;

business environment;

corporate governance;

business ethics;

financial markets;

quantitative methods;

organisational behaviour;

management and strategic decision-making;

marketing; and


CHAPTER 2 50

international business and globalisation (IFAC, 2003a: 47).

Organisational and business education includes:

a knowledge of macro- and micro-economics;

a knowledge of business and financial markets and how they operate;

the application of quantitative methods and statistics to business problems;

an understanding of corporate governance and business ethics;

an understanding of organisations and of the environments in which they

operate, including the major economic, legal, political, social, technical,

international and cultural factors;

economic forces and their influences and values;

an understanding of environmental issues and sustainable development;

an understanding of interpersonal and group dynamics in organisations,

including the methods for creating and managing change in organisations;

an understanding of personnel and human resource issues, managing people,

project management, and marketing;

an understanding of decision support and strategy, including business advice,

strategic management and general management;

an understanding of organisational and operational risk;

a basic knowledge of international trade and finance and the ways in which

international business is conducted, as well as the processes of globalisation;

and

an ability to integrate the above components in accomplishing strategic

objectives (IFAC, 2003a: 48).

(iii) Information technology

The information technology component should include the following subject areas and

competences:

general knowledge of IT;

IT control knowledge;


CHAPTER 2 51

IT control competences;

IT user competences; and

one of, or a mixture of, the competences of the roles of manager, evaluator or

designer of information systems (IFAC, 2003a: 49).

At the point of qualification, candidates are expected to have a knowledge and

understanding of the competency elements in at least one of these roles. This may be

evidenced by the ability to describe or explain the significance of the issues related to

the listed competences in a relevant business setting. A candidate needs to be able to

participate effectively in the activities listed in this section as part of a team or under

supervision, but would not to be expected to demonstrate proficiency in all the

competences (IFAC, 2003a: 49).

IFAC does however state that as part of their pre-qualification education, all prospective

CAs are expected to participate in at least one of the roles of manager, designer or

evaluator of information systems or a combination of these roles (IFAC, 2003a: 49).

The following broad areas of competence relate to the user role:

apply appropriate IT systems and tools to business and accounting problems;

demonstrate an understanding of business and accounting systems; and

apply controls to personal systems (IFAC, 2003a: 49).

The information technology knowledge component may be provided in a variety of

ways, perhaps as separate courses or by integrating the subject into the organisational

and business knowledge component or into the accounting and accounting-related

knowledge component. Competence may also be acquired through work experience in

addition to the IT knowledge component. For the formal IT education component, case

studies, interactions with experienced professionals and similar techniques may be used

to enhance the presentation of subject matter and to help students develop practical

skills, in combination with relevant IT work experience (IFAC, 2003a: 49-50).


CHAPTER 2 52

2.6.2.2 Non-professional knowledge (skills) component

a) Introduction

Skills are part of the set of capabilities required by CAs to demonstrate competence.

These capabilities, set out in IES 3 - Professional Skills (IFAC, 2003a: 51), include

knowledge, skills, professional values, ethics and attitudes (IFAC, 2003a: 52). IEP 2 -

Towards Competent Professional Accountants, (IFAC, 2003b: 3) provides an extension

to these listed capabilities and lists the following:

attitudes (for example, professional demeanour/values);

behavioural skills (for example, leadership);

broad business perspective (for example, strategic/critical thinking);

functional skills (for example, risk analysis);

technical knowledge (for example, audit); and

intellectual skills (for example, knowledge, understanding, application, analysis,

synthesis and evaluation).

Capabilities are an indication of potential competence that can be transferred across

different environments. It is important to ensure that chartered accounting education

programmes integrate the development of knowledge, skills, professional values, ethics

and attitudes (IFAC, 2003a: 53).

Rising expectations from employers, clients and the public as to what CAs contribute at

work and toward society generally have prompted an increased emphasis on

professional skills (Myers, 2005: 110).

Various lists of skills have been classified and described in several ways. The skills CAs

require are grouped under five main headings:

intellectual skills;

technical and functional skills;

personal skills;


CHAPTER 2 53

interpersonal and communication skills; and

organisational and business management skills (IFAC, 2003a: 52).

b) Content

(i) Intellectual skills

Intellectual skills are often divided into six levels. In ascending order, these are:

knowledge;

understanding;

application;

analysis;

synthesis; and

evaluation (IFAC, 2003a: 52).

What is very interesting is that these skills, which are listed in IES 3 – Professional

Skills, are much the same as the so-called Bloom’s Taxonomy for the cognitive domain.

The cognitive domain includes learning outcomes that relate to the head or intellect,

such as memory, understanding and reasoning (Van der Horst & McDonald, 1997: 37).

Bloom’s taxonomy consists of six levels. These levels also progress from the simplest to

the most complex. They are:

Level 1: Knowledge – this level involves recall of specific facts or other

information. The focus on knowledge outcomes is thus the act of

remembering, or the recall of verbal information.

Level 2: Comprehension – this level is the first level of understanding. At

this level a statement must not only be recalled, but its meaning

must be understood.

Level 3: Application – this refers to the ability to use information in new

situations. Information used in the application phase would

include general ideas, rules, methods, principles, or theories that


CHAPTER 2 54

must be remembered and applied.

Level 4: Analysis – this refers to the ability to break down a whole into its

component parts. In this way the elements embedded in a whole

are identified and the relations among the elements are

recognised.

Level 5: Synthesis – this level refers to the ability to put elements together

to form a new whole.

Level 6: Evaluation – at this level judgements are made, based on certain

criteria (Van der Horst & McDonald, 1997: 37-38).

It is important that candidates must reach the highest levels of competence at the point

of qualification. Intellectual skills enable a CA to solve problems, make decisions and

exercise good judgement in complex organisational situations. These skills are often

the product of a broad general education (See section 2.6.4 for an explanation).

The required intellectual skills include the following:

the ability to locate, obtain, organise and understand information from human,

print and electronic sources;

the capacity for inquiry, research, logical and analytical thinking, powers of

reasoning, and critical analysis; and

the ability to identify and solve unstructured problems which may be in

unfamiliar settings (IFAC, 2003a: 54).

(ii) Technical and functional skills

Technical and functional skills consist of general skills, as well as skills specific to

accounting (IFAC, 2003a: 55). They include:

numeracy (mathematical and statistical applications) and IT proficiency;

decision modelling and risk analysis;

measurement;

reporting; and


CHAPTER 2 55

compliance with legislative and regulatory requirements (IFAC, 2003a: 55).

(iii) Personal skills

Personal skills relate to the attitudes and behaviour of CAs. Developing these skills

promotes individual learning and personal improvement (IFAC, 2003a: 55). These

include:

self-management;

initiative, influence and self-learning;

the ability to select and assign priorities within the parameters set by restricted

resources;

to organise work to meet tight deadlines;

the ability to anticipate and adapt to change;

considering the implications of professional values, ethics and attitudes in

decision-making; and

professional scepticism (IFAC, 2003a: 55).

(iv) Interpersonal and communication skills

Interpersonal and communication skills enable a CA to work with others for the

common good of the organisation, receive and transmit information, form reasoned

judgements and make decisions effectively (IFAC, 2003a: 55).

The components of interpersonal and communication skills include the ability to:

work with others in a consultative process, to withstand and resolve conflict;

work in teams;

interact with culturally and intellectually diverse people;

negotiate acceptable solutions and agreements in professional situations;

work effectively in a cross-cultural setting;

present, discuss, report and defend views effectively through formal, informal,

written and spoken communication; and

listen and read effectively, showing a sensitivity to cultural and language


CHAPTER 2 56

differences (IFAC, 2003a: 55/56).

(v) Organisational and business management skills

Organisational and business management skills have become increasingly important to

CAs as they play a more active role within the management function of organisations

(IFAC, 2003a: 56).

Organisational and business management skills include:

strategic planning, project management, management of people and resources,

and decision-making;

the ability to organise and delegate tasks, to motivate and to develop people;

leadership; and

professional judgement and discernment (IFAC, 2003a: 56).

2.6.2.3 General education component

a) Introduction

The general education component of the educational programmes for CAs as provided

in IES 3 - Professional Skills (IFAC, 2003a: 51), provides the following generic

comments:

all professional educational programmes should include some portion of general

education (IFAC, 2003a: 56);

a good foundation of general education, although not an end in itself, is one way

of helping candidates become broad-minded individuals who think and

communicate effectively and who have the basis for conducting inquiry, carrying

out logical thinking and undertaking critical analysis (IFAC, 2003a: 56);

general education requirements vary greatly from programme to programme and

from country to country (IFAC, 2003a: 56);

general education focuses on the development of a CA’s non-professional

knowledge, intellectual skills, personal skills, interpersonal and communication


CHAPTER 2 57

skills, and organisational and management skills (IFAC, 2003a: 56);

a general education may be gained through a degree programme with the

balance of the programme devoted to professional accounting topics, including

accounting, finance and related knowledge, organisational and business

knowledge and information technology knowledge as highlighted in IES 2 -

Content of Professional Accounting Education Programs) (IFAC, 2003a: 41-50);

students may also acquire key skills through experience at work, combined with

studying for the examinations (IFAC, 2003a: 57). This combination would

include elements of general knowledge and skills and thus develop the

competence and capabilities, including the underlying technical knowledge,

required to qualify as a CA.

A broad general education can contribute significantly to the acquisition of professional

skills. This is also highlighted in IES 1 – Entry Requirements to a Program of

Professional Accounting Education (IFAC, 2003a: 37-40).

b) Content

A broad general education can encourage LLL and provide a foundation on which to

build professional and accounting studies and may consist of:

an understanding of the flow of ideas and events in history, the different

cultures in today’s world and an international outlook;

basic knowledge of human behaviour;

a sense of the breadth of ideas, issues and contrasting economic, political and

social forces in the world;

experience in inquiry and evaluation of quantitative data;

the ability to conduct inquiry, carry out logical thinking and understand critical

thinking;

an appreciation of art, literature and science;

an awareness of personal and social values and of the process of inquiry and

judgement; and

experience in making value judgements (IFAC, 2003a: 57).


CHAPTER 2 58

2.6.3 Professional values, ethics and attitudes


IFAC considers that member bodies have an obligation to their current and future

members, as well as to society at large, to ensure that their members have a continuing

understanding of professional values, ethics and attitudes. This understanding needs to

be sufficient to enable them to operate effectively and with integrity and discernment in

an environment of change. In order to assist member bodies in this task, IFAC

prepared IES 4 - Professional values, ethics and attitudes (IFAC, 2003a: 59-65).

Professional values, ethics and attitudes need to be treated in their own right within the

education framework. If future CAs are to perceive professional values, ethics and

attitudes as important to their work, it is essential that they do not perceive the

treatment of professional values, ethics and attitudes as peripheral to their main

education programmes. A thorough investigation of professional ethics, values and

attitudes and ethics as a whole will be conducted in Chapter 3 of this study.

Society has high expectations of the accounting profession. It is essential for CAs to

accept and observe ethical principles regulating all their relationships. Professional

values, ethics and attitudes identify CAs as members of a profession and should shape

everything they do as professionals. It is the responsibility of member bodies to ensure

that their members have an adequate understanding of the principles of professional

ethics and the underlying rationale of the constraints that professional ethics place on

CAs.

2.6.3.2 Content

The programme of professional accounting education should provide potential CAs with

a framework of professional values, ethics and attitudes for exercising professional

judgement and for acting in an ethical manner that is in the best interest of society and

the profession (refer to the questionnaire in APPENDIX B, statement 26).

The required values, ethics and attitudes of CAs include a commitment to comply with


CHAPTER 2 59

the relevant local codes of ethics, which should be in conformity with the IFAC Code of

Ethics (IFAC, 2003a: 59-63; IFAC, 2005).

The coverage of values and attitudes in education programmes for CAs should lead to a

commitment to:

the public interest and sensitivity to social responsibilities;

continual improvement and LLL;

reliability, responsibility, timeliness, courtesy and respect; and

laws and regulations (IFAC, 2003a: 62).

While the approach of each programme to the learning of professional values, ethics

and attitudes will reflect its own national and cultural environment and objectives, all

programmes should include, as a minimum:

the nature of ethics;

differences of detailed rules-based and framework approaches to ethics, their

advantages and drawbacks;

compliance with the fundamental ethical principles of integrity, objectivity,

commitment to professional competence and due care, and confidentiality;

professional behaviour and compliance with technical standards;

concepts of independence, scepticism, accountability and public expectations;

ethics and the profession: social responsibility;

ethics and law, including the relationship between laws, regulations and the

public interest;

consequences of unethical behaviour to the individual, to the profession and to

society at large;

ethics in relation to business and good governance; and

ethics and the individual CA: whistle blowing, conflicts of interest, ethical

dilemmas and their resolution (IFAC, 2003a: 62/63).


CHAPTER 2 60

2.6.3.3 Teaching professional values, ethics and attitudes

Because of the importance of professional values, ethics and attitudes to future CAs,

the presentation of the topic may be treated as a separate subject (IFAC, 2003a: 63).

As students progress and gain a wider knowledge of other subjects, it will be

appropriate to integrate subject matter. This will encourage students to look for and

consider the possible ethical implications of problems being discussed in their study of

other subjects. Students:

need to understand that values, ethics and attitudes run through everything that

CAs do and how CAs contribute to confidence and trust in the market;

need to be encouraged to study the role of, and critically appraise, relevant

codes of ethics;

may be invited to view professional pronouncements in this area as a positive

effort to create a framework of trust and integrity within which CAs can operate;

and

need to be encouraged to examine the ethical pronouncements of other

professions and examine and discuss other potential approaches [to ethics] for

the accounting profession (IFAC, 2003a: 63).

Rote learning of codes and subsequent tests of memory will not produce the desired

effect. The presentation of professional values, ethics and attitudes to accounting

students can be enhanced greatly through the use of participative approaches. These

may include:

the use of teaching materials such as multi-dimensional case studies;

role playing;

discussion of selected readings and videos;

analysis of real life business situations involving ethical dilemmas;

discussion of disciplinary pronouncements and findings; and

seminars using speakers with experience of corporate or professional decision-

making (IFAC, 2003a: 64).


CHAPTER 2 61

Using a participative teaching approach at RAU seems to create more problems than

solutions. Very few (if any) of the modes mentioned in the previous paragraph are

possible due to practical constraints, for example infrastructure (to be discussed in

sections 3.6 and 5.5 again). However, these certainly will provide an added value in

the training of prospective CAs as students would have to apply themselves and prove

by way of a specific assessment standard that they understand professional values,

ethics and attitudes.

The teaching of professional values, ethics and attitudes will be discussed in depth via

an empirical study done at RAU. The empirical study will be discussed in Chapter 7 of

this study.

2.6.3.4 Workplace learning and professional values, ethics and attitudes

Professional values, ethics and attitudes affect the work of all CAs. Proper ethical

behaviour is as important as technical competence (IFAC, 2003a: 64). Member bodies

will require trainees to gain appropriate training and practical experience prior to

admission to membership. Accordingly, the period of training and practical experience

needs to be structured to give trainees an opportunity to observe the application of

professional values, ethics and attitudes in the work situation.

Those responsible for the supervision of practical experience need to stress to their

trainees the ethical dimensions of the role CAs play in the workplace (IFAC, 2003a: 65).

This may be done by encouraging them to:

identify any apparent ethical implications and conflicts in their work;

form preliminary views on such occurrences; and

discuss them with their superiors (IFAC, 2003a: 65).

Trainees, and those recently qualified as CAs, would also benefit from exposure to, and

involvement in, discussions on relevant issues relating to the work of their employers

that are perceived to have potential ethical implications, for example conflicts of interest


CHAPTER 2 62

related to:

CAs’ job responsibilities (including responsibilities defined by the policies of

organisations and the instructions of supervisors) and their professional

responsibilities (as defined by their professional codes of conduct amongst other

sources);

confidentiality of information, including the limits of confidentiality;

the structure and purpose of professional associations (including lobbying

activities on behalf of members);

the variety of ways in which CAs can face conflicts of interest, including, for

example, inappropriate advocacy and earnings management (IFAC, 2003a: 65).

Ethical problems and potential dilemmas may occur. Where there is doubt about the

ethical aspects of a course of action or situation, trainees need to consult some

recognised ethical reference point, within their work environment or member body,

whichever may be the appropriate course of action (IFAC, 2003a: 65).

2.6.4 Continuous professional development


In all the Standards for the education of CAs prescribed by IFAC, the issue of

professional values, ethics and attitudes has been highlighted. These Standards

furthermore also highlight the issue of LLL and CPD. For this reason IFAC issued

Standard IES 7 - Continuing professional development (IFAC, 2004a: 1-12).

2.6.4.2 Purpose and scope

IES 7 prescribes that member bodies:

foster a commitment to LLL among CAs;

facilitate access to CPD opportunities and resources for their members;

establish benchmarks for members for developing and maintaining the

professional competence necessary to protect the public interest; and


CHAPTER 2 63

monitor and enforce the continuing development and maintenance of

professional competence of CAs (IFAC, 2004a: 1).

This Standard is based on the principle that it is the responsibility of the individual CA to

develop and maintain the professional competence necessary to provide high quality

services to clients, employers and other stakeholders.

IES 7 is of the opinion that member bodies should implement a CPD requirement as an

integral component of a CA’s continued membership (IFAC, 2004a: 1) (refer to the

questionnaire in APPENDIX B, statement 39). Such a requirement contributes to the

profession’s objective of providing high-quality services to meet the needs of the public

(including clients and employers).

CPD is not just a requirement within the CA profession. Ongoing professional

development is also a requirement for example within the medical profession and the

chartered management accountant profession. In a document produced by Certified

Management Accountants (hereafter CMA) Canada (2002: i), this is stipulated as:

“Certified Members will be required to complete a minimum of 75 hours of Ongoing

Professional Development over a three-year period.”

CPD refers to learning activities that develop and maintain capabilities to enable CAs to

perform competently within their professional environments (IFAC, 2004a: 1). CPD

does not stand alone as just another one of the IFAC Standards; it is an integrated

approach to the training of CAs. This is clear when one reads IES 4 – Professional

values, ethics and attitudes, and the reader is reminded that IES 4 and IES 7 should be

read as a whole.

A fundamental principle of the IFAC Code of Ethics for Professional Accountants states:

“A professional accountant has a continuing duty to maintain professional knowledge and

skill at the level required to ensure that a client or employer receives the advantage of

competent professional service based on current developments in practice, legislation and

techniques” (IFAC, 2003a: 61; IFAC, 2004a: 2/3).


CHAPTER 2 64

CAs face increased knowledge and skill expectations. They and their professional

associations also face unprecedented scrutiny about the quality of internal control,

governance, financial statements and independent audits. These pressures apply to

CAs in both the private and public sectors.

In addition, the need to be competitive in a worldwide economy has prompted a more

intense focus on the role and responsibilities of CAs in entities of all types. CAs in all

sectors have important contributions to make. Continued development of professional

competence and LLL is critical if the CA is to meet these expectations (IFAC, 2004a: 1,

2). The profession has a responsibility to ensure that CAs continue to develop and

maintain the competence demanded by their professional roles and the users of their

services.

On its own, CPD does not provide the assurance that all members will provide a high

quality professional service all the time. Achieving this involves more than maintaining

professional competence; it involves applying knowledge with professional judgement

and an objective attitude (IFAC, 2004a: 1).

Also, there cannot be assurance that every person who participates in a CPD

programme will obtain the full benefits of that programme, because of variances in

individual commitment and capacity to learn. Nevertheless, it is certain that members

who are not up-to-date on current technical and general knowledge pertinent to their

work will not be able to provide professional services competently. Therefore, despite

the inherent limitations of any CPD programme, a CPD requirement is important to

maintaining public confidence (IFAC, 2004a: 1/2).

SAICA’s vision of CPD will be discussed in Chapter 3 in detail.

2.6.5 Promotion of lifelong learning

Member bodies should promote the importance of continuous improvement of

competence and a commitment to LLL for all CAs (IFAC, 2004a: 3) (refer to the

questionnaire in APPENDIX B, statement 18). All CAs have an obligation to develop


CHAPTER 2 65

and maintain their professional competence, relevant to the nature of their work and

professional responsibilities. This obligation applies to all CAs, irrespective of whether

they are involved in traditional accounting fields or other areas (IFAC, 2004a: 3).

The process of LLL commences early, continuing with the education programme to

become qualified as a CA, and on through an individual’s career. CPD is an extension

of the education process that led to qualification as a CA. The professional knowledge,

professional skills, and professional values, ethics and attitudes gained by the time of

qualification continue to develop and are refined appropriately for the professional

activities and responsibilities of the individual (IFAC, 2004a: 3).

CPD will be discussed again in Chapter 3 to this study.

2.7 PRESCRIBED CONTENT OF CHARTERED ACCOUNTANT EDUCATION PROGRAMMES – A SOUTH AFRICAN PERSPECTIVE

2.7.1 Introduction

Various training routes are recognised within SAICA (SAICA, 2003a: 1). From FIGURE

2.7 (on the following page) one can see that a student wishing to qualify as a CA may

choose to follow one of two routes: either Training Inside Public Practice (hereafter

TIPP) or Training Outside Public Practice (hereafter TOPP) (SAICA, 2003a: 1).

Within the TIPP programme training will take place at a Registered Training Office

(hereafter RTO) of a firm of approved registered accountants and auditors with a

minimum required training period of 36 consecutive months if the student is in

possession of a recognised degree or academic equivalent.


CHAPTER 2 66

CTA (e.g. B.Com Honours in Accounting) or equivalent

EDUCATION TRAINING

Completed B degreeor academic equivalent

Three year training contract

Completed B degreeor academic equivalent

Qualifying Examination (QE) Part I (SAICA)

Complete specialist course in auditing

Complete specialist course in financial management

Public Practice Examination (PPE)(PAAB)

Minimum 18 months’ practical experience(training contract) and a pass in QE Part I

Registered Accountant and Auditor

CA(SA) RAA

Five yeartraining contract

No formal degree

Minimum 18 months’ practical experience(training contract) and a pass in QE Part I

Qualifying Examination (QE) Part II(SAICA)

Chartered AccountantCA(SA)

Complete CTA or equivalentFour yeartraining contract

No formal degree

TIPP TOPP

RTO ATO/RTO

FIGURE 2.7: Qualifying as a chartered accountant

SOURCES: SAICA, 2003a: 7 (adapted); Marx, Schönfeldt, Van der Watt & Potgieter,

2006: 11 (adapted)

Within the TOPP programme training will take place at an Approved Training

Organisation (hereafter ATO), in either commerce or industry or the public sector, with


CHAPTER 2 67

a minimum required training period of 36 consecutive months if the student is in

possession of a recognised degree or academic equivalent or 60 consecutive months in

the case of non-graduates. Remission of 12 months will be granted on the attainment

of a relevant degree or academic equivalent (SAICA, 2003a: 1).

An ATO/RTO is an environment approved by SAICA as suitable for training prospective

members of SAICA, either in commerce and industry, public practice or the public

sector. No firm/organisation will be excluded solely on the grounds of size or sector.

The most important criterion will be the ability to deliver the appropriate breadth, depth

and quality of training (SAICA, 2003a: 3).

Under the auspices of SAICA it used to be possible to qualify at any one of three levels,

namely the CA, Associate General Accountant (hereafter AGA) and Associate Accounting

Technician (hereafter AAT) level. In 2004 the SAICA Board took a decision to

discontinue the AGA(SA) and AAT(SA) colleges but there are however still trainee

accountants in the system who still need to qualify. Current AGA(SA) and AAT(SA)

designation holders may however retain their association status with SAICA (SAICA,

2003a: 3).

2.7.2 Training as a chartered accountant

From FIGURE 2.7 it can be seen that students wishing to qualify at the CA level can

do so by means of either the TIPP or the TOPP route. If one is training for the audit

specialisation, the training must be done at an RTO. In respect of training for the

financial management specialisation, the training must be done at an ATO. However, if

a firm of registered accountants and auditors can offer training in the financial

management specialisation because of specialist departments within the firm, that

training environment may apply for recognition as an ATO (SAICA, 2003a: 8).

Various other accounting bodies play a role in South Africa. Of these the CPA

designation of the Institute of Certified Public Accountants of South Africa (now known

as the South African Institute of Professional Accountants or SAIPA) is well known.

These accountants mainly act as accounting officers for close corporations (SAIPA,


CHAPTER 2 68

2006).

In South Africa only SAICA manages the designation CA(SA). A separate registration is

needed for a CA wishing to act as an auditor, namely Registered Accountant and

Auditor (hereafter RAA). At the writing of this chapter, the RAA designation was

controlled by the PAAB and will in future be controlled by the IRBA. No person other

than a person holding both the CA(SA) and RAA designations may act as an auditor for

companies.

2.7.3 The training environment

A suitable environment is one with a stated commitment to provide training for

prospective members of SAICA and should contain adequate training structures or

facilities. Features of a suitable environment will include:

an environment that is clearly conducive to the training of professional

accountants;

a clearly defined policy for keeping staff up to date with developments in the

profession (e.g. a commitment to CPD);

a senior person responsible for the coordination of training who is well versed in

SAICA’s training and admission requirements;

members of the relevant Colleges who are capable and willing to act as mentors

and/or training officers;

a formal training programme;

an adequate spread and mix of work providing

o an acceptable range, depth and continuity of experience;

o opportunities for personal and professional development, and in

particular, arrangements for ensuring that trainees acquire an

understanding of the ethical dimension of the profession;

the ability to provide continuing quality monitoring and supervision, especially

adequate time for on-the-job training and counselling; and

arrangements for

o trainees to attend the necessary lectures;


CHAPTER 2 69

o monitoring the academic progress of trainees and counselling the

trainees accordingly (SAICA, 2003a: 3).

To achieve the levels of competence deserving of the public’s trust, professional

associations (such as SAICA) have a direct interest in standards of preparation, service

and practice. SAICA monitors the quality of education at accredited universities and in

training offices, as was pointed out in the last bullet of the previous list (SAICA, 2003b:

5).

It is also important to note that SAICA is an Education and Training Quality Assuror

registered with the South African Qualifications Authority (refer to section 2.2.4 for a

discussion), which means that SAICA facilitates access, mobility and progression within

education and training of CAs but also provides the necessary input to enhance the

quality of education and training of CAs.

One also has to remember that, in the case of SAICA, the responsibility for

qualification-based preparation is furthermore shared with providers and statutory

bodies such as the PAAB, the CHE and the DoE (Prozesky, 2001: 11).

2.7.4 The goal of training

The goal of accounting education and training must be to produce competent

professional accountants who make a positive contribution over their lifetimes to the

profession and to the society in which they work. The maintenance of professional

competence in the face of increasing change makes it imperative that accountants

develop and maintain an attitude of learning to learn (SAICA, 2003a: 8).

The education and training of professional accountants must provide a foundation of

knowledge, skills and professional values that will enable them to continue to learn and

adapt to change throughout their professional lives (SAICA, 2003a: 8) (refer to the

questionnaire in APPENDIX B, statement 7).


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2.7.4.1 Knowledge fundamental to training

There are four main categories of topics, which are fundamental to the work of CAs

specialising in auditing. These are:

auditing;

accounting, financial management and secretarial services;

business information systems; and

taxation and estates (SAICA, 2003a: 12).

A detailed inspection of these four areas provides the following information. In each of

the cases it commences with the general outcomes pertaining to CAs followed by a

detailed analysis of the various assessment standards.

a) Auditing

Outcomes Assessment standards

Expressing an audit opinion as to the fairness

of financial statements and compliance with

applicable statutes; and

the audit of other reports and representations

of a financial nature.

Preparing and updating systems notes

Evaluating systems in general

Planning an audit

Evaluating audit risk

Test of controls

Substantive testing

Evaluating results of audit testing

Reporting to management

The auditor’s report on financial statements

Special purpose audit reports

SOURCE: SAICA, 2003a: 13


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b) Accounting, financial management and secretarial services


Prepare and advise on financial information

for internal or external reporting purposes;

and

provide consulting support to management,

mainly of a financial nature.

Initiating accounting entries

Preparing financial statements in accordance

with GAAP

Analysing financial statements

Forecasting and budgeting

Reporting as an accounting officer

Review/preparation of statutory records

SOURCE: SAICA, 2003a: 13/14

c) Information technology


Effective communication with computer audit

and information systems specialists;

the ability to recognise potential computer

applications; and

the evaluation of existing computer

applications.

Practical computer experience

Impact of computers on controls

Computer-assisted audit techniques


d) Taxation and estates

Outcome Assessment standards

Interpretation and application of laws and

procedures relating to taxes levied in terms

of the Income Tax Act.

Preparation and/or review of tax

computations for corporates and individuals

Preparation and/or review of VAT calculations


2.7.4.2 Skills fundamental to training and development

A training programme should provide a wide range of experience that is structured,

progressive in content and responsibility and non-repetitive (SAICA, 2003a: 9).

Training and the gaining of experience will be complementary to formal educational

programmes and should form a valuable basis for career development. It is in the

interests of all concerned (i.e. the trainee, the training officer and the profession) that


CHAPTER 2 72

the period of training should be used effectively, with the trainee gaining breadth and

diversity of experience at progressive levels of responsibility.

The training offered by ATOs/RTOs should be of sufficient depth for trainees to develop

inter alia the following skills (refer to the questionnaire in APPENDIX B, statement

16):

a) Intellectual skills

The capacity for inquiry, research, abstract logical thinking, inductive and

deductive reasoning and critical analysis;

the ability to identify and solve unstructured problems in unfamiliar settings and

to apply problem-solving skills in a consultative process;

the ability to select and assign priorities within the parameters set by restricted

resources and to organise work to meet tight deadlines;

the ability to adapt to change; and

the ability to apply accounting knowledge in solving real world problems (SAICA,

2003a: 9).

b) Interpersonal skills

The ability to work with others, particularly in groups, to influence them, to lead

them and to withstand and resolve conflict;

the ability to interact with culturally and intellectually diverse people; and

the ability to negotiate acceptable solutions (SAICA, 2003a: 9).

c) Communication skills

The ability to present, discuss and defend views effectively through formal and

informal, written and spoken language;

the ability to listen effectively; and

the ability to locate, obtain, organise, report and use information from human,

printed and electronic sources (SAICA, 2003a: 10).


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2.7.4.3 Professional values

The training programme must provide potential CAs with a framework of professional

values for exercising good judgement and for acting in an ethical manner that is in the

best interests of society and the profession (SAICA, 2003a: 10).

Professional values pervade the work of CAs, wherever they may be engaged. Proper

technical competence and ethical behaviour are of equal importance. Accordingly, the

period of practical training should be structured to provide the prospective CA with an

opportunity to observe the application of ethics in the work place (SAICA, 2003a: 10).

Professional values are made up of the following components:

a commitment to act with integrity and objectivity and to be independent under

applicable professional standards (refer to the questionnaire in APPENDIX B,

statement 17);

a knowledge of the standards of professional ethics;

a concern for the public interest and sensitivity to social responsibilities; and

a commitment to LLL (SAICA, 2003a: 10) (refer to the questionnaire in

APPENDIX B, statement 67).

Although the issue of professional values, ethics and attitudes is discussed in depth in

other SAICA documents (which will be discussed in Chapter 3 to this study), there is

one remark in the section dealing with training of CAs: “the training officer should

ensure that the Code of Professional Conduct is explained to all trainees at an early

stage in their employment” (SAICA, 2003a: 11). Perhaps there should have been

greater mention in this document about this very important issue for all CAs worldwide.

In its training manual, SAICA (2003: 11/12) mentions the ‘continuity of supervision’.

What is more important is SAICA’s commitment to CPD. “In order to ensure that those

who supervise are themselves up to date, all partners, managers and professional staff

in the office or managers in the organisation must be aware of Continuing Professional

Development (CPD) and be given the opportunity to meet their CPD obligations.”


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2.8 A SUMMARISED INTERNATIONAL AND NATIONAL COMPARISON OF THE TRAINING OF A CHARTERED ACCOUNTANT

To compare the training of CAs prescribed by SAICA and the training as prescribed by

IFAC, a tabular approach will be used in TABLE 2.3. The comparisons will be done on

the basic outline as provided in the various IFAC and SAICA documents pertaining to

training and education (IFAC 2003a, 2004a; SAICA 2003).

The prescriptions of IFAC will be used and that of SAICA will be compared with them.

TABLE 2.3: A training comparison of chartered accountants

IFAC SAICA

General remarks

“This document (i.e. International Education

Standards for Professional Accountants) outlines

subject areas rather than actual courses (IFAC,

2003a: 30)”. (Author’s own emphasis)

“The document (i.e. SAICA Training Guidelines) is

not to set out a uniform programme, but rather

to provide guidelines to facilitate the review and

development of a training programme” (SAICA,

2003a: 8/9)”. (Author’s own emphasis)

Professional knowledge component

Accounting, finance and related knowledge

Organisational and business knowledge

Information technology (IFAC, 2003a: 42)

Auditing

Accounting, financial management and

secretarial services

Business information systems

Taxation and estates (SAICA, 2003a: 12).

Critical comment:

Even though SAICA indicates the main categories of topics which are fundamental to the work of

CAs specialising in auditing within four components, it generally agrees with the components listed

by IFAC using three categories. It is noticeable, however, that SAICA includes Auditing as one of

the components, thereby raising the bar on the knowledge component needed.

Non-professional knowledge (skills) component

Intellectual skills

Technical and functional skills

Intellectual skills

Interpersonal skills


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IFAC SAICA

Personal skills

Interpersonal and communication skills

Organisational and business management

skills (IFAC, 2003a: 52)

Communication skills (SAICA, 2003a: 9-10)

Critical comment:

SAICA collapsed both the personal and interpersonal skills prescribed by IFAC into one component.

The technical and functional skills, as well as the organisational and business management skills, are

evident in all three skills listed by SAICA, but were not grouped as separate skills. One cannot

however infer that by collapsing these it is now less important than that which IFAC requires.

General education component

Understanding of the flow of ideas and

events in history, the different cultures in

today’s world and an international outlook.

A basic knowledge of human behaviour.

A sense of the breadth of ideas, issues and

contrasting economic, political and social

forces in the world.

Experience in inquiry and evaluation of

quantitative data.

The ability to conduct inquiry, carry out

logical thinking and understand critical

thinking.

An appreciation of art, literature and science.

An awareness of personal and social values

and of the process of inquiry and judgement.

Experience in making value judgements.

(IFAC, 2003a: 57)

INDUCTION COURSES

On joining an ATO/RTO and before

undertaking responsible practical work or

contact with clients it is important that

trainees undergo an induction programme.

The purpose of such an induction programme

should be to give the trainee a preliminary

introduction to the work, practices and ethics

of the profession and an overview of its role

in the business community.

The trainee should also be introduced to the

working systems of the ATO/RTO. (SAICA,

2003a: 9)

Critical comment:

Both SAICA and IFAC refer to a general education component. In the case of SAICA it is called an

induction programme. On closer inspection it is actually clear that these two have absolutely

nothing in common. SAICA mentions the induction programme as an introductory programme for

new trainees. IFAC mentions its general education component in a sense that any person wishing

to become a professional accountant needs a knowledge component that is greater than just the

sum of accounting and auditing. IFAC’s components also seem to have more of a skills dimension,

rather than being made up of ‘mere knowledge’.


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IFAC SAICA

Professional values, ethics and attitudes

The coverage of values and attitudes in education

programmes for CAs should lead to a

commitment to:

the public interest and sensitivity to social

responsibilities;

continual improvement and LLL;

reliability, responsibility, timeliness, courtesy

and respect; and

laws and regulations (IFAC, 2003a: 62).

Professional values are made up of the following

components:

a commitment to act with integrity and

objectivity and to be independent under

applicable professional standards;

a knowledge of the standards of professional

ethics;

a concern for the public interest and

sensitivity to social responsibilities; and

a commitment to LLL (SAICA, 2003a: 10).

Professional values pervade the work of CAs,

wherever they may be engaged. Proper technical

competence and ethical behaviour are of equal

importance. Accordingly, the period of practical

training should be structured to provide the

prospective CA with an opportunity to observe

the application of ethics in the work place

(SAICA, 2003a: 10).

Critical comment:

Both bodies highlight the importance and outcomes of professional ethics, values and attitudes

within the CA profession. Where IFAC prescribes the contents of what a professional ethics, values

and attitudes education programme should consist of, SAICA looks at it more from an experiential

viewpoint once the CA is in practice. A more detailed discussion of professional ethics, values and

attitudes will be given in Chapter 4 to this study.

Continuous professional development

Education Standard IES7 - Continuing

professional development (IFAC, 2004a: 1-

12).

The education and training of professional

accountants must provide a foundation of

knowledge, skills and professional values that

will enable them to continue to learn and

adapt to change throughout their

professional lives (SAICA, 2003a: 8).

“ … must be aware of Continuing Professional

Development (CPD) and be given the


CHAPTER 2 77

IFAC SAICA

opportunity to meet their CPD obligations”

(SAICA, 2003a: 12)

Critical comment:

Both bodies highlight the importance and outcomes of continuous or continued professional

development within the CA profession. A more detailed discussion of CPD will be given in Chapter 3

to this study.

SOURCES: IFAC, 2003a & 2004a; SAICA, 2003a

Even though the education and training requirements prescribed by IFAC are not

incorporated to the letter by SAICA, one may be assured that everything and more than

IFAC requires has been included in the education and training requirements of SAICA.

2.9 SUMMARY

Following the election of South Africa’s first truly democratic government, education

and training within South Africa was restructured and transformed.

The establishment of the NQF and the SAQA were key accomplishments of the first

democratic government within South Africa where a new structure was designed with

the aim of improving the quality of education in South Africa. The NQF is a framework

for the provision of LLL opportunities in accordance with nationally agreed qualifications

levels.

In 1995 the National Commission on Higher Education came about as a result of White

Paper 3 and set out the needs and challenges of higher education. In 1997 this was

followed with the promulgation of the Higher Education Act of 1997.

In order to meet the demands of the 21st century, the National Plan for Higher

Education identified policy goals and strategic objectives which are critical for the

transformation and reconstruction of the higher education system. One of these goals

is to expand the general access to higher education from 15% to 20% over the next


CHAPTER 2 78

ten to fifteen years.

The most fundamental aspect that came about following the National Plan for Higher

Education was the consolidation of the number of higher education institutions in the

country and the publication of the Higher Education Qualifications Framework. It

proposed a single qualifications framework for all higher education qualifications in line

with the NQF that establishes common parameters and criteria for qualifications design.

The history of the public accounting profession in South Africa can be traced back to

1894 when the first organised body of accountants in the country was established.

Over the years several abortive attempts were made to introduce controlling legislation

for the professional accounting profession and eventually in 1951 the Public

Accountants' and Auditors' Act was enacted. The Act provided for the establishment of

a register of public accountants and auditors but also provided for the establishment of

the PAAB.

Nearly a century after the establishment of the first organised body of accountants in

the country, SAICA was established. From that time onwards, the PAAB has continued

as the statutory regulatory body looking after the public interest whereas SAICA has

operated as the body servicing the needs of its members.

A major change to the accounting profession has come about with the signing of the

new Auditing Profession Act on 16 January 2006. This Act establishes a new juristic

person to be known as the Independent Regulatory Board for Auditors as the successor

body to the PAAB, which will regulate the auditing profession.

Accounting has historically been looked upon as a profession that plays an important

role in society. However, rapid change has also been a predominant characteristic of

the environment in which the CA works. To meet these challenges, the profession

needs to ensure that individuals becoming CAs achieve an agreed level of competence,

which is then maintained. This also opens up the profession to criticism, however.


CHAPTER 2 79

To meet these challenges, educators delivering professional accounting education

programmes at an undergraduate level will also need to respond to the changing needs

of the individual CA. Education programmes need to include reflection: students should

be required to consider an incident and the approach that should be taken in future in

similar circumstances. Achieving the goal of providing a foundation for LLL requires a

thorough grounding in the professional knowledge, skills and values, ethics and

attitudes essential to professional competency.

IFAC has developed International Education Standards for Professional Accountants and

all IFAC member bodies (of which SAICA is one) are expected to comply with these.

IFAC recognises, however, that the accounting profession throughout the world

operates in environments with different cultures and regulatory requirements.

Within these IESs an emphasis is placed on a universal set of knowledge, skills and

professional values broad enough to enable adaptation to constant change but also to

produce competent professional accountants. These IESs address the education and

practical experience needs of prospective CAs; their dynamic profession; the importance

of LLL and CPD and the importance of competence assessment throughout their

training but also whilst practising.

CPD refers to learning activities that develop and maintain capabilities to enable CAs to

perform competently within their professional environments and does not stand alone

as just another one of the IFAC Standards; it is an integrated approach to the training

of CAs.

CAs face increased knowledge and skill expectations. In addition, the need to be

competitive in a worldwide economy has prompted a more intense focus on the role

and responsibilities of CAs in entities of all types. Continued development of

professional competence and LLL are critical if the CA is to meet these expectations.

The profession has a responsibility to ensure that CAs continue to develop and maintain

the competence demanded by their professional roles and the users of their services.


CHAPTER 2 80

On its own, CPD does not provide the assurance that all members will provide a high

quality professional service all the time. Achieving this involves more than maintaining

professional competence; it involves applying knowledge with professional judgement

and an objective attitude. As such, the process of LLL commences early. It also

continues during the education programme to become qualified as a CA and on through

an individual CA’s career. CPD is an extension of the education process that led to

qualification as a CA.

The goal of accounting education and training must be to produce competent

professional accountants who make a positive contribution over their lifetimes to the

profession and to the society in which they work. A student wishing to qualify as a CA

in South Africa may choose to follow one of two routes: either TIPP or TOPP.

In South Africa only SAICA manages the designation CA(SA). A separate registration is

needed for a CA wishing to act as an auditor, namely Registered Accountant and

Auditor (RAA). The RAA designation is controlled by the PAAB and will in future be

controlled by the IRBA.

To achieve the levels of competence deserving of the public’s trust, professional

associations (such as SAICA) have a direct interest in standards of preparation, service

and practice. SAICA monitors the quality of education at associated universities and in

training offices. It is also important to note that SAICA is an Education and Training

Quality Assuror registered with SAQA, which means that SAICA facilitates access,

mobility and progression within the education and training of CAs but also provides the

necessary input to enhance the quality of education and training of CAs.

Even though the education and training requirements prescribed by IFAC are not

incorporated to the letter by SAICA, one may be assured that everything and more than

IFAC requires has been included in the education and training requirements of SAICA.

---o0o---

81

CHAPTER 3 Continuous professional development

through self-directed learning

3.1 INTRODUCTION

ven though CPD is something that CAs will engage with only once they have

qualified (i.e. after the ‘education’ phase), it is important that prospective CAs

become au fait with the skills involved in practising CPD. This study therefore

focuses on the skills needed by prospective CAs (i.e. at an undergraduate level) to

utilise CPD of ethics properly.

The goal of accounting education is to produce competent CAs capable of making a

positive contribution over their lifetimes to the profession and society in which they

work. Professional undergraduate education programmes share the goal of preparing

competent graduates who will successfully make the transition to the world of CAs.

Education programmes in undergraduate accounting should perhaps be designed to

expose prospective CAs to the strategies that might assist them to develop the ability to

become self-directed in continuing to learn after qualification.

In an era of exponential knowledge proliferation and technological change, society

demands continued professional accountability for competence. Maintaining this

professional competence in the face of the ever increasing changes accountants

E

Continuous professional development through self-directed learning

CHAPTER 3 82

encounter on a daily basis makes it essential that they develop and maintain an attitude

of learning to learn as part of their own CPD.

Supporting LLL requires a suite of complementary approaches including intelligent

teaching systems, design environments, performance support systems, on-demand

learning, coached simulation systems, intelligent help and advisory systems, and

collaborative systems.

This chapter focuses on the most important approach in support of LLL – namely, self-

directed learning (hereafter SDL). SDL will however have no effect if the learner does

not use problem-based learning (hereafter PBL) as well.

This chapter furthermore also puts some of the theory to be tested by way of the

questionnaire and as part of the empirical analysis in the spotlight. Where applicable,

the reader will be directed to an area that will be used as part of the questionnaire to

be described and discussed in Chapters 7 and 8 of this study.

This chapter commences by providing an overview of CPD. Even though the study is

focused on the skills needed in utilising CPD at an undergraduate level, it is important

to understand the role of CPD holistically. It also links CPD as it pertains to the CA by

looking at the links between competence, LLL and SDL. It then starts to investigate

and analyse the concepts of SDL, as well as PBL in detail.

In the section on SDL (section 3.3), it investigates current theories of learning and also

provides a historical perspective on SDL, some definitions, characteristics and skills

appropriate to SDL. Some myths, realities and challenges pertaining to SDL are also

discussed.

A detailed discussion of PBL and LLL is offered, but it still focuses on the link to SDL

and CPD. In the investigation the chapter will also provide both the positive and

negative aspects of these ‘theories’.


CHAPTER 3 83

Before the close of the chapter, a South African perspective on all of this is provided in

which the various aspects discussed are linked back to an approach that can be utilised

by prospective CAs at an undergraduate level.

3.2 CONTINUOUS PROFESSIONAL DEVELOPMENT

3.2.1 Introduction

Over the past 15 years or so, there has been mounting criticism of accounting

education. A number of reports and studies (mentioned in Chapter 2) criticised the way

learners are taught accounting at higher education institutions. Several authors (e.g.

Sundem, Williams & Chironna, 1990; Deppe, Sonderegger, Stice, Clark & Streuling,

1991; Lovell, 1992; May, Windall & Sylvestre, 1995; Adler & Milne, 1997a, 1997b;

Hasall, Lewis & Broadbent, 1998) addressed the lack of LLL and SDL skills that

accounting graduates (also prospective CAs) should possess for success in the

profession. The need for improved problem-solving, teamwork, communication, and

interpersonal skills is an issue that many of the reports and authors raise (Milne &

McConnell, 2001: 61/62).

Questioning whether higher education is generating the right kinds of learning

outcomes for graduates, however, is not something peculiar to accounting education.

Higher education has in general been subject to criticism by educationalists for its

failure to adequately provide graduates with the competencies needed to utilise their

knowledge base and to continue learning long after graduation (e.g. Barnett, 1992;

Gibbs, 1992; Candy, Crebert & O’Leary, 1994).

Even though the undergraduate education programme for CAs is prescribed by SAICA,

Candy et al., (1994) and Candy (1995) see universities cramming their undergraduate

programmes (also the undergraduate CA programmes) with technical content at the

expense of broader and more general aims, including LLL.


CHAPTER 3 84

Far too many learners, the educationalists argue, conceive of learning as acquiring,

memorising and reproducing facts rather than as making sense of these – i.e.

understanding the relationships between these facts. Far too many learners also

believe that teachers are responsible for the learning: they select the content, present it

and test whether it has ‘stuck’. Instead, learners should themselves be responsible for

their own learning (Milne & McConnell, 2001: 62).

As a means of overcoming these perceived deficiencies, educators have been called

upon to (IFAC, 2002b: 9/10; 2003a: 33-34):

adapt instructional methods and materials to the ever-changing environment in

which the professional accountant works;

pursue a curriculum that encourages students to learn on their own;

encourage students to be active participants in the learning process;

use assessment, measurement and evaluation methods that reflect the changing

knowledge, skills and values required of CAs;

integrate knowledge and skills across topics and disciplines to address many-

sided and complex situations typical of professional demands; and

emphasise problem-solving, which encourages identifying relevant information,

making logical assessments and communicating clear conclusions.

In order to ensure that learners are more active participants in the learning process,

educators need to use a broad range of learner-centred teaching and training methods

(IFAC, 2002b: 9/10; 2003a: 33-34) which may include:

case studies, projects and other means to simulate actual work situations;

working in groups;

using technology creatively;

problem-solving that involves identifying relevant information, making logical

assessments and communicating clear conclusions.

These will again be addressed in Chapter 5.


CHAPTER 3 85

Society also demands continued professional accountability for the competence of CAs

in an era of exponential knowledge proliferation and technological change (e.g. Houle,

1980; Rhoades, 1991; Cavanaugh, 1993). One essential way to meet this demand is to

engage in continuous professional education (after qualification) (Clark, 1980; Williams,

2001: 2). LLL has emerged as one of the major challenges for the worldwide

knowledge society of the future (Fischer & Scharff, 1998: 2) and the continued

development of professional competence and LLL is critical if the CA is to meet the

standard expectations set by the profession, employers and the general public (refer to

the questionnaire in APPENDIX B, statement 32).

Learning to learn involves developing skills and strategies that help individuals to learn

more effectively and to use these effective learning strategies to continue to learn

throughout life. This process results from, leads to, and enhances a questioning spirit

and a lifelong desire to learn (refer to the questionnaire in APPENDIX B, statements

46 & 67). Competence is therefore not a static term, but evolves over a lifetime of

learning.

Professional accounting bodies should require all CAs to develop and maintain

competence relevant and appropriate to their work and professional responsibilities

(IFAC, 2004a: 3). However, the responsibility for developing and maintaining

competence rests primarily with the individual CA (IFAC, 2004a: 4).

3.2.2 Definitions and descriptions

3.2.2.1 Continuous professional development

According to IFAC (2003a: 16), CPD for CAs can be defined as: “Learning activities for

developing and maintaining the capabilities of professional accountants to perform

competently within their professional environments.”

It is interesting that IFAC (2003a: 16) sees CPD as being aimed at “... the post-

qualification development and maintenance of professional competence” (refer to the

questionnaire in APPENDIX B, statement 43). SAICA (2005c: 1) however is of the


CHAPTER 3 86

opinion that this process should start during the pre-qualification education and training

process (i.e. undergraduate level) and continue after qualification (refer to the

questionnaire in APPENDIX B, statement 40). SAICA feels that higher education

institutions should encourage the development of LLL by, inter alia, making learners

take responsibility for their own learning and become active participants in the learning

process.

The focus of this study is precisely that: learners should be ‘taught’ how to use

CPD specifically for the acquisition of ethic principles at an undergraduate

level in order to use it to its fullest extent after qualifying as CAs.

Even though monitored CPD is compulsory from 2006 for all CAs in South Africa (SAICA,

2005d: 2), SAICA cannot provide the assurance that all members will provide high

quality professional service all the time (refer to the questionnaire in APPENDIX B,

statement 34). Doing so involves more than monitoring professional competence; it

would involve the application of that knowledge using professional judgement and an

objective attitude to further learning and enrichment (IFAC 2004: 2; SAICA, 2005c: 1;

SAICA, 2005d: 3) (refer to the questionnaire in APPENDIX B, statement 36). In their

CPD Policy, SAICA also states that members who do not comply with CPD requirements

will, as a sanction, be referred to SAICA’s Investigation Committee (SAICA, 2005d: 3)

(refer to the questionnaire in APPENDIX B, statements 38 & 39).

SAICA cannot be assured that every person who participates in a CPD programme will

reap the full benefits of that programme, because of variances in individual

commitment and capacity to learn (SAICA, 2005d: 3) (refer to the questionnaire in

APPENDIX B, statement 36). Despite the inherent limitations, a CPD programme is

important for an individual member to fulfil his/her professional activities and

responsibilities and the maintenance of professional standards, ethics and knowledge

(IFAC 2004a: 2).


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In Chapter 4 the issue of ethics (professional and otherwise) will be discussed in greater

detail and will be followed in Chapter 5 by looking at a way of teaching and learning

ethics by incorporating CDP as well.

3.2.2.2 Competence and continuous professional development

In the definition of CPD, developing and maintaining the capabilities of CAs to perform

competently within their professional environments was included as an outcome of CPD.

Competence, according to IFAC (2003a: 16), is “... being able to perform a work role

to a defined standard, with reference to real working environments.” According to

SAICA (2005d: 1) competence “... is the ability to perform the tasks and roles expected

of a professional accountant (CA), both newly qualified and experienced, to the

standard demanded by the profession, employers and the general public.” It is

interesting to note that the term ‘professional accountant’ is used here. The issue of a

CA being a professional will be discussed in detail in Chapter 4.

Competence therefore refers to the demonstrated ability to perform relevant roles or

tasks to the required standard. Whereas capability refers to the attributes held by

individuals that give them the potential to perform, competence refers to the actual

demonstration of performance.

The primary responsibility for competence lies with the CA, and all CAs have an

obligation to enhance and maintain their professional competence, relevant to the

nature of their work and professional responsibilities.

3.2.2.3 Lifelong learning and continuous professional development

In most current accounting curricula, learning is defined and measured in terms of

knowledge of principles, standards, concepts and facts as published by professional

bodies or regulatory agencies. This ‘transfer’ of a ‘body of knowledge’ approach to

education has been the traditional focus of accounting education, with the result that

the ‘accumulation of knowledge’ approach is these days no longer adequate (IFAC,

2003c: 9) (refer to the questionnaire in APPENDIX B, statements 16 & 25). The focus


CHAPTER 3 88

of accounting education must change from mere knowledge acquisition and

accumulation to one based on a 'learning to learn' approach – an LLL approach.

Osler (1935) holds that LLL practices need to be instilled at the commencement of

higher education and reinforced throughout the formal stage of learning (refer to the

questionnaire in APPENDIX B, statement 18). In order to transfer these practices to

students, as much emphasis should be placed on the ability to acquire and apply

knowledge as on the depth and breadth of the knowledge itself.

Cavanaugh (1993: 114) notes that, in practice, professionals acquire much more

learning from reading, discussions with colleagues, and experience than through formal

classroom training. Therefore, focusing on outcomes, she says that educators must

“…help students develop an effective system for learning that will facilitate their

transition from education to practice”.

CAs need to develop an attitude of LLL (SAICA, 2005d: 1). LLL can be described as

‘self-directed growth’. The process entails gaining knowledge and an understanding of

learning, and in particular, of how to direct one’s personal learning experience.

In the IFAC document International Education Standard for Professional Accountants

IES 7: Continuing Professional Development: A Program of Lifelong Learning and

Continuing Development of Professional Competence (IFAC, 2004a), it is said that LLL is

an integral part of the whole CPD process.

Learners in continuing education (i.e. LLL) have a special need for flexible SDL. They

need to choose the learning content according to their actual needs, as it is not

practical to demand that they work through a large, predefined curriculum. As they

have a fixed work schedule they also need to choose the learning time and place

(Areglado, Bradley & Lane, 1996: 26, 102; Böhne, Faltin & Wagner, 2002: 8).


CHAPTER 3 89

3.2.2.4 Self-directed learning and continuous professional development

As was previously stated, LLL is something a CA does for self-growth purposes or as an

investment in him- or herself. This means that new skills and knowledge are acquired

through SDL (SAICA, 2005d: 2). Interestingly, IFAC does not use the term SDL

anywhere in its definition and description of the CPD process. It does however refer to

SDL in the introduction to its Education Standards, where SDL is used as an ‘approach’

to learning (IFAC, 2003a: 33). This is important for this study as SDL would be

described as a vehicle for CPD at an undergraduate level. Professional education

programmes in undergraduate accounting must be designed to expose prospective CAs

to the strategies that can assist them to develop the abilities to become self-directed in

continuing to learn.

Taking the term competence, which was discussed earlier in this section, further, we

may say that for SDL, a learner should have the following competencies (Böhne et al.,

2002: 8/9; Ibrahim, 2002: 2):

self-observation, self-reflection, self-judgement;

development of own objectives;

reactivation of initial knowledge;

autonomous organisation of learning (e.g. time management);

autonomous development of learning motivation and concentration;

development of learning and problem-solving strategies; and

knowing when to seek the assistance of other learners or the tutor.

The crux of CPD lies in the fact that it is aimed at an LLL approach or a ‘learning to

learn’ approach. In further sections of this chapter, LLL and SDL will be investigated in

detail.

3.2.3 The need for continuous professional development of

chartered accountants

CPD is an extension of the learning process leading to qualification as a CA, where the

professional knowledge, professional skills and professional values, ethics and attitudes


CHAPTER 3 90

gained continue to develop and are refined and become appropriate for the professional

activities and responsibilities of the individual (IFAC, 2004a: 3) (refer to the

questionnaire in APPENDIX B, statement 45). When the CA recognises that learning

is necessary or desired, the individual will need to determine what is to be learned, how

best to learn it and how well it is to be learned. “This essentially means that

continuous professional learning needs to be self-directed” (Williams, 2001: 2).

CPD is applicable to all CAs, regardless of the sector or the size of business in which

they operate, because (refer to the questionnaire in APPENDIX B, statements 27 &

65):

all CAs have an ethical obligation of due care to their clients, employers and

relevant stakeholders and need to demonstrate their ability to discharge this

responsibility in a competent manner;

CAs in all sectors hold positions of importance involving financial reporting,

public accountability and maintaining the public trust;

the public is likely to rely on the designation or professional standing of the CA.

Moreover, all CAs carry the professional designation, and any lack of competence

or ethical behaviour has the same negative consequences for the reputation and

standing of the profession, irrespective of the sector or role in which they

operate;

all sectors are affected by the rapidly changing environment and the consequent

need to adapt the strategic or business plans of those organisations relying on

the CA’s professional competence; and

employers hiring CAs in any sector rely, at least to some extent, on the

professional designation as proof of professional competence (IFAC, 2004a: 4).

As this study concentrated on the use of CPD of ethics at an undergraduate level, one

may question why the applicability of CPD for CAs is mentioned above. The reason is

that prospective CAs should be exposed to CPD at an undergraduate level in order for

them to understand the potential consequences of not subscribing to this lifelong

process of learning.


CHAPTER 3 91

3.3 SELF-DIRECTED LEARNING

3.3.1 Introduction

SDL is critical when learning becomes an integral part of life driven by one’s desire and

need to understand something or to get something done, instead of merely solving a

problem given in a classroom setting. An LLL perspective implies that universities need

to prepare learners to engage in SDL processes because this is what they will have to

do in their professional and private lives outside of the classroom (Fischer & Scharff,

1998: 2) (refer to the questionnaire in APPENDIX B, statement 9).

3.3.2 Current theories of learning

Current trends in educational theory make the following fundamental assumptions

about learning (Fischer & Scharff, 1998: 3) and these are important precursors for the

analysis of SDL that is to follow in the next section.

3.3.2.1 Learning is a process of knowledge construction

Learning is a process of the social construction of knowledge, not of knowledge

recording or absorption (Harel & Papert, 1991; Maehl, 2000: 51); it is a process of

acquiring understanding and using a variety of strategies to improve the ability to attain

and apply knowledge and it requires environments in which learners can be active

designers and contributors rather than passive consumers (Fischer & Scharff, 1998: 4)

(refer to the questionnaire in APPENDIX B, statement 25).

In a study by Burroughs-Lange (1996), it was found that teachers (and not learners)

seem to be doing the cognitively demanding tasks during class time.

3.3.2.2 Learning is knowledge-dependent

As learning is knowledge-dependent, people use their existing knowledge to construct

new knowledge, requiring environments that support user-tailored information

presentations such as differential descriptions of new information (Fischer & Scharff,

1998: 4; Schmidt, 1983, 1993).


CHAPTER 3 92

3.3.2.3 Learning is situation-bound

Learning is highly tuned to the situation in which it takes place (Fischer & Scharff,

1998: 4) requiring environments that are domain-oriented and that support human

problem-domain interaction (the connection between people and the domain specific

problems that they face).

Schön (1983) calls this ‘reflection-in-action’, whereas Norman (1993) refers to it as

‘experiential mode’ and ‘reflective mode’. This action is known as ‘autodidactics’ and

the learner is referred to as an ‘autodidact’ (Greyling, Geyser & Fourie, 2002: 114) (also

see section 3.3.5.3). Because self-reflection is difficult, a human coach or a teacher can

help the learner to identify the breakdown situation and to provide task-relevant

information for reflection.

3.3.2.4 Learning needs to account for distributed cognition

Learning needs to account for distributed cognition (Fischer & Scharff, 1998: 4), by

which the knowledge and effort required to solve a problem is distributed among

various participants. Teaching in a classroom is often conceptualised very differently: it

is often fitted “into a mould in which a single, presumably omniscient teacher explicitly

tells or shows presumably unknowing learners something they presumably know

nothing about” (Hammond & Collins, 1991: 153). A critical challenge is a reformulation

and reconceptualisation of this misleading conception.

Learning is not limited to any discrete group of individuals. Even though educational

systems deal with ‘teachers’ and ‘learners’ as separate groups, in reality these labels are

not universally applicable (Fischer & Scharff, 1998: 4). As tasks and responsibilities

change, all individuals should be learning continuously (Kaufman, 2003: 1-2) (refer to

the questionnaire in APPENDIX B, statements 7 & 9). For example, educators who

are traditionally ‘teachers’ may desire to investigate new technologies to use in their

classrooms. However, when exposed to new technology and methodologies for

creating educational curricula, teachers become learners in order to understand how to

use new opportunities effectively (Fischer & Scharff, 1998: 4).


CHAPTER 3 93

3.3.2.5 Learning is affected by motivational issues

Learning is affected as much by motivational issues (Fischer & Scharff, 1998: 4) as by

cognitive issues requiring environments that allow people to experience and understand

why they should learn and contribute something to their field.

Motivation is commonly defined as an individual’s degree of persistence in undertaking

goal-directed behaviour (in this case self-directed behaviour) (Adler, Milne & Stablein,

2001: 1). The ability to promote high student motivation is a function of both the

student’s personal characteristics, e.g. his/her prior knowledge, as well as teaching

context – i.e. the learning methods relied upon (Adler et al., 2001: 1). Sadly, as Biggs

(1994) noted, it is all too often the case that models of learning focus exclusively on

one or the other.

A common factor that has been associated with the motivation potential of a learning

context is the amount of autonomy provided (Adler et al., 2001: 2). Autonomy will be

discussed in detail in section 3.3.5 (which investigates the characteristics of a self-

directed learner).

3.3.3 Historical perspective on self-directed learning

SDL has become a central theme in adult education, as evidenced by meta-analyses,

critical reviews of research, and annual international symposia and conferences devoted

solely to research on SDL, along with millions of ‘hits’ on this topic on various internet

sites (Brookfield, 1993: 227). SDL is also not a new concept.

The notion of self-direction in learners has existed under numerous different guises

from classical antiquity to the present day. Self-study played an important part in the

lives of such Greek philosophers as Plato and Aristotle. Other historical examples of

self-directed learners include Alexander the Great, Caesar and Descartes (Hiemstra,

1994: 1).


CHAPTER 3 94

Education literature provides evidence that philosophers and theorists have utilised

associated teaching and learning strategies since Socrates in the fifth century BC (Rossi,

2002: 2).

“I shall only ask him, and not teach him and he shall share the enquiry with me: and do you

watch and see if you find me telling or explaining anything to him, instead of eliciting his

opinion.”

(Socrates quoted by McQueeney, 1999: 1)

The ‘modern’ origins of SDL can be traced to John Dewey as far back as 1918. Dewey

proposed that all persons are born with unlimited potential for growth and development

(Williams, 2001: 3).

Almost one hundred years ago, William Osler implied that much of a practising

physician’s learning would not be done “under teachers,” but would be self-directed

continuing education. Despite his comments, SDL has only come to the attention of the

educational world in the past few years (Snell, 2000: 1). Osler (1935) wrote: “The

hardest thing to get into the mind of the beginner is that the education upon which he

is engaged is ... a life course, for which the work of a few years under teachers is a

preparation.”

In 1961, Cyril Houle was the first to popularise the term SDL when he described adults

involved in a learning activity without external support or guidance (Candy, 1992: 24).

This line of research was carried further by his student Allen Tough in 1967 and 1978

(Bonham, 1992: 48; Casworm, 1992: 56; Confessore, 1992: 7).

It is important to note at this stage that even though Houle and Tough expanded the

theory on SDL, Thorndike had in 1928 already shown empirically that adults could learn

– a new thought for his day (Bonham, 1992: 51).

In 1975, Malcolm Knowles defined SDL and his writing on SDL was born out of the

development of andragogical philosophy (Knowles, 1975: 19): the art and science of

teaching adults (Long, 1992: 37; Williams, 2001: 4).


CHAPTER 3 95

Most theorists however agree that andragogy is not really a theory of adult learning but

“they regard Knowles’ principles as guidelines on how to teach learners who tend to be

at least somewhat independent and self-directed” (Kaufman, 2003: 2). The various

instructional approaches associated with andragogy typically incorporate SDL principles

(Hiemstra, 1992: 103).

Andragogy is based on five assumptions about how adults learn and their attitude to

and motivation for learning (Barrows, 2000; Kaufman, 2003: 1-2). They are:

adults are independent and self-directing;

they have accumulated a great deal of experience, which is a rich resource for

learning;

they value learning that integrates with the demands of their everyday life;

they are more interested in immediate, problem-centred approaches than in

subject centred ones; and

they are more motivated to learn by internal drives than by external ones.

SDL skills, which are associated with LLL (Shokar, Shokar, Romero & Bulik, 2002: 197),

are particularly important in the medical field, where knowledge is continuously

changing and advancing (refer to the questionnaire in APPENDIX B, statements 11 &

28). How much more important is it in the field of chartered accountancy, where the

last decade has been filled with calls for ‘change’ and where actions have taken place

based on these calls (refer to the questionnaire in APPENDIX B, statement 28)?

It is very important to note that although Tough and Knowles looked at a similar aspect

of learning, they did so from different perspectives. Tough was more concerned with

the individual and his/her learner-orientated approach, whereas Knowles looked at the

learner engaged in group learning activities (Long, 1992: 37/38). Farquharson (1995)

and Brookfield (1980, 1981) documented how learning networks form the context

within which many SDL activities take place (Brookfield, 1985: 7).


CHAPTER 3 96

3.3.4 Defining self-directed learning

Perhaps because SDL is so central to the tenets of adult education (Mezirow, 1985), it

has been one of the high-interest topics of research for more than a decade.

Researchers, theorists, and practitioners have all asked the questions: What is SDL?

Who is engaged in it? What are the proper roles for educators and institutions wanting

to provide it?

Malcolm Knowles’ definition of SDL (1975: 18) was a “... process in which individuals

take initiative, with or without the help of others”, to diagnose their learning needs,

formulate learning goals, identify resources for learning, select and implement learning

strategies, and evaluate learning outcomes.

CAs will be familiar with many of the terms used in this definition, such as learning

needs, educational goals, resources, strategies and outcomes, as these are often

described as important factors in planning, implementing and evaluating formal (often

termed ‘other-directed’) activities.

Knowles did not insist that SDL be a solitary activity, but suggested that it might be

done with the help of others in a participative learning environment. He furthermore

argued that the adult learner moves from a state of dependence to increasing

independence in learning (Long, 1992: 37) but that this movement to SDL will differ

from learner to learner (Hiemstra, 1992: 108; Hiemstra, 1994: 134).

Kaufman (2003: 213) attempted to describe SDL as “organising teaching and learning

so that learning is within the learners’ control” and also remarked that SDL is “a goal

towards which learners strive so that they become able to accept responsibility for their

own learning”.

Studies on the effectiveness of learning in various environments have shown that adults

learn what they want to learn (i.e. self-efficacy or self-effectiveness) (Boyatzis, 2001: 5;

Kaufman, 2003: 214) and because they are task-orientated their learning may be linked

to problems, challenges or needs arising from their social or vocational roles (Greyling


CHAPTER 3 97

et al., 2002: 112). Other things, even if acquired temporarily (e.g. surface learning for

a test), are soon forgotten (Boyatzis, 2001: 11). In this way, it appears that most, if

not all, sustainable behavioural change is intentional.

Boyatzis (2001: 11) therefore defines SDL as “an intentional change in an aspect of

who you are (i.e., the real) or who you want to be (i.e., the ideal), or both.” SDL is

self-directed change in which you are aware of the change and understand the process

of change.

Based on initial descriptions of SDL by Brockett and Hiemstra (1991), Candy (1991) and

Caffarella (1993), Williams1 (2001: 4) described SDL as: “a self-initiated process of

learning that stresses that ability of individuals to plan and manage their own learning”

and “an attribute or characteristics of learners and a way of organising learning in

formal settings that allows for greater learner control.”

Mocker and Spear (Lowry, 1989: 1) included SDL in a descriptive model of LLL based

entirely on the locus of control for decision-making about the objectives and means of

learning. The model is a two-by-two matrix (FIGURE 3.1 on the following page) of

the learner and the institution; the SDL situation occurs when learners, and not the

institution, control both the learning objectives and the means of learning.

The following situations occupy the other cells of the matrix:

formal learning, in which institutions, not learners control the objectives (or

outcomes) and means (or method) of learning;

non-formal learning, in which learners control the objectives (or outcomes) and

institutions control the means (or method of learning) and it does not lead to

any qualification or recognition; and

informal learning, in which institutions control the objectives (or outcomes) but

learners control the means (or methods) of learning.

1 Williams refers to works of Hiemstra as ‘Heimstra’ in her research. All other resources consulted, however, use


CHAPTER 3 98

Formal learning

Non-formal

learning

Informal learning

Self-directed learning

Institution Learner

Learning outcome

FIGURE 3.1: Learning matrix

SOURCE: Own deductions and reasoning

Brookfield (1985: 14) has also provided many definitions or descriptions of SDL. These

include:

SDL implies both a philosophy and a process. The philosophy or goal is that of

personal autonomy and self-management of learning, the willingness or capacity

to conduct one’s own education; and

SDL is concerned with an internal change of consciousness but it is also an

activity or process that allows the independent pursuit of learning and learner

Hiemstra.


CHAPTER 3 99

control of goals, instructional strategies, content, pace and evaluation. In SDL

the learner manages learning and has control over the what, who, where, when

and how of learning.

Guglielmino (1992: 114) described SDL as a mode of learning characteristically found in

adults who are in the process of realising their adulthood by an internal change of

consciousness as well as an external management of instructional events.

Autonomous learners are characterised as independent, able to make choices based on

rational reflection and having a strong sense of personal values and beliefs (Garrison,

1992). A rationalist perspective of learning assumes that knowledge acquisition occurs

primarily as a result of individual cognitive study (Schmidt, 1993).

Even autonomous learners may however on occasion choose not to display or pursue

this characteristic. Factors that may influence learners may include familiarity with

content, degree of technical skill, sense of personal competence and the context of the

learning situation (Williams, 2001: 5).

Kroenke (2004: 1) defined SDL as a “process in which the learner is involved in

identifying what needs to be learned and takes the learning in finding ... answers.”

Ibrahim (2002: 2) agrees and also labels SDL as ‘self-planned learning’; ‘self-

instruction’; and ‘self-education’. Within SDL one must realise three important views,

namely:

SDL is a lifelong process: i.e. it is continuous and not ‘once and for all’;

SDL is an enabling technique: i.e. learners are actively involved in the process

and they are not ‘spoon-fed’; and

SDL is a humbling experience: i.e. learners realise that they learn constantly –

also from each other – and teachers realise that they have limitations in time

and knowledge and therefore are not the ‘encyclopaedia of all answers’

(Kroenke, 2004: 3).


CHAPTER 3 100

3.3.5 Characteristics or dimensions of a self-directed learner

There are a number of attributes that characterise good self-directed learners. Some

are personal characteristics that might be considered innate, for example the learner is

reflective, curious, and motivated – all attributes that allow the learner to ask questions

and define a learning gap. The learner is also confident, persistent, independent, self-

sufficient and flexible. These characteristics foster the learner’s management and

control skills. A self-directed learner is methodical and analytical. This allows the

learner to develop and use frameworks and see connections (Snell, 2000: 2).

Although the previous characteristics might be difficult to acquire or develop, the

following skills can be learned or modified:

the self-directed learner is skilled at the learning process and has a repertoire of

learning skills that can be adapted to a specific context;

the learner is information-literate, with good information-seeking and retrieval

skills; and

the self-directed learner is skilled at evaluating and assessing the relevance of

what he or she has learned and its application to practice (Snell, 2000: 2).

The central assumption underlying the work is that adult learners strive toward self-

direction and autonomy. The salient characteristics of adult learners constitute a major

contribution of the research on SDL (Williams, 2001: 5). Self-directed learners can be

characterised in four ways (e.g. Pintrich, 1995; Troskie-de Bruin, 1999; Greyling et al.,

2002: 114-115):

define their own needs and goals (i.e. exercise autonomy);

acquire information or skills that address these needs (i.e. independent pursuit

of learning);

use the new knowledge or skill and evaluate its effectiveness (i.e. self-

management of self-regulation); and

understand the process or steps of learning (i.e. learner control).


CHAPTER 3 101

Although these four dimensions overlap, one may attempt to distinguish between them.

3.3.5.1 Personal autonomy

A common factor that has been associated with the motivation potential of a learning

context is the amount of autonomy provided (Adler et al., 2001: 2). Gibbs (1979: 121)

notes this concept “... is probably the most familiar, for it is part of an individualistic,

anti-authoritarian ideology ... deep-rooted in Western capitalistic democracies.”

Personal autonomy can be described as having “... a disposition toward acting and

thinking autonomously in all situations (self-determination)” (Candy, 1991: 101). SDL

promotes learner autonomy, initiatives and control (Hammond & Collins, 1991: 120).

Students who are permitted the opportunity to choose and control their learning report

higher motivation, greater commitment, deeper involvement and more strategic

thinking; “Autonomy is synonymous with empowerment” (Adler et al., 2001: 2, 3).

Three additional overlapping components of autonomy can furthermore be identified

(Candy, 1991: 104), namely:

intellectual autonomy – a person will base his/her primary beliefs on his/her own

experience, reflection of evidence and sense of what is right and wrong;

moral autonomy – independent thought and capacity to carry into practice what

one has decided to do (i.e. tenacity or strength of will); and

emotional autonomy – a person will exercise self-mastery in the face of strong

emotional involvement (i.e. be emotionally detached).

3.3.5.2 Self-management (self-regulation)

In a conventional learning programme, decisions about learning will be made by the

educator or other relevant authorities. Learners are excluded from these decisions

(Hammond & Collins, 1991: 153). In an SDL situation, autonomy refers to a willingness

and capacity or “... an inclination to exert control over one’s learning endeavours (self-

management)” (Candy, 1991: 101). It is widely assumed that adults are involved in

some sort of quest for self-improvement and perhaps self-actualisation.


CHAPTER 3 102

Self-management includes the regulation of three aspects (Pintrich, 1995: 7; Craig,

1988: 4) namely:

regulation of behaviour – control by the learner of knowledge and skills to

utilise resources in the academic environment, e.g. time and physical

infrastructure;

motivation – responsibility by the learner to control and change attitudes and

beliefs to be successful in the learning process; and

metacognitive strategies – reflecting skills that learners utilise in their own

learning.

The encouragement of self-management of learning is consistent with the philosophy of

SDL; it prepares learners for continuing learning; and it takes account of individual

differences (Hammond & Collins, 1991: 153/154).

3.3.5.3 Independent pursuit of learning

Independent learning is part of SDL and it is that part of learning where the learner is

uncertain about something and enquires about it after performing self-reflection. This

activity is known as ‘autodidactics’ or ‘autodidaxy’ and the learner is referred to as an

‘autodidact’ (Hiemstra, 1994: 3; Greyling et al., 2002: 114). This merely means that

learning occurs outside formal instruction (Grow, 1991).

Other reasons why the learner may seek assistance outside of formal instruction as part

of the independent pursuit of learning would be for emotional support and

encouragement. Brockett and Hiemstra (1991: 12) refer to this as the “fellowship of

learning”.

3.3.5.4 Learner control

Learner control is an approach to learning and to planning instruction in which learners

assume control over the learning process. People may vary in their ability and capacity

for SDL but the individual’s willingness to take responsibility for his/her own learning

can be enhanced (Greyling et al., 2002: 115).


CHAPTER 3 103

In section 3.4.2 one is introduced to the teacher/learner-control continuum – the

learner moving from a state of total dependence on a teacher to a state of total

independence. The end state, however, is not independence but interdependence.

During this final stage, learners take responsibility (‘social responsibility’) not only for

their own learning but also for each other’s learning when using co-operative learning

methods (Hammond & Collins, 1991: 158; Parks Daloz, 2000: 105) and where students

are expected to be interdependent and co-responsible for the group’s learning (Grow,

1991: 58; Greyling et al., 2002: 115).

3.3.6 Skills needed for self-directed learning

To be characterised as a good self-directed learner, one therefore needs a number of

essential skills (Snell, 2000: 2). In order to define their needs and goals, learners must:

be able to reflect on practices, identify learning gaps, and have well-honed

questioning skills;

have well-developed information-location and retrieval skills (e.g. the ability to

search a computer database efficiently) in order to acquire information;

have well-developed critical appraisal skills to allow them to access and assess

the value of new knowledge;

be skilled at translating this newly gained knowledge into practice and reflecting

on the usefulness of the newly acquired knowledge or skills;

have an awareness of the steps of SDL and the ability to plan and document

learning, including understanding the process of learning. This metacognitive

ability – to stand back and look at the learning process with an awareness of

the structure of, or framework for learning – may lead to more effective

learning as it allows learners to adapt or modify their own learning process.


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3.3.7 Learner-centred approaches in self-directed learning


As early as the 1930s, Dewey (Williams, 2001: 3) defined education as the agency for

growth and cautioned that “the teacher should be the one who guides, but does not

interfere with nor control the process of learning”. Fuller (1998: 3) explains that “...

effective learning focuses on the learner rather than the teacher, and it results in

classes that are quite different from what students often experience.” He quotes

Johann Comenicus (1630 in Fuller, 1998: 3) as saying that “... students do more

learning when teachers do less teaching”.

3.3.7.2 Teacher-centred learning versus self-directed learning

Teacher-control and learner-control should not be understood as a dichotomous,

mutually exclusive relationship but rather as a continuum, with teacher-control (total

teacher dependence) at one end and learner-control (or teacher independence) at the

other end (Candy, 1991: 10-11; Grow, 1991: 58, 65; Greyling et al., 2002: 115).

The following table (TABLE 3.1) illustrates the differences between teacher-directed

learning and SDL:

TABLE 3.1: Differences between TDL and SDL environments

Assumptions about

the learner

Teacher-directed

environment

Self-directed

environment

View of the learner The learner has a dependent

personality and the teacher

has the responsibility for the

decision-making of learning.

The individual learner

‘grows’ in capacity (i.e.

becomes more independent)

and needs to be self-

directed.

Role of the learner’s

experience

The learner’s learning

experience is of less value

than that of the teacher.

The teacher has the

responsibility of transmitting

The learner’s learning

experiences become an

increasingly rich resource for

learning.

As these resources are


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Assumptions about

the learner

Teacher-directed

environment

Self-directed

environment

information locked up in

resources to the learner.

essential for learning, the

learner exploits this along

with resources from various

experts (e.g. peers).

Learning readiness Learners become ready to

learn different things at

different levels of

maturation.

A given set of learners will

therefore be ready to learn

the same things at a given

level of maturation.

Individual learners have

different patterns of

readiness/maturation.

The learners’ ‘growth’ will

prescribe what they need to

know and at what stage this

need to happen.

This will normally develop

through the completion of

tasks and problems.

Learner orientation Learners see learning as the

accumulation of subject

matter.

Learning experiences are

organised according to units

of contents.

Learners are task- or

problem-orientated.

Learning experiences should

be organised (i.e.

structured) as task-

accomplishing or problem-

solving learning projects.

Learner motivation Learners are motivated to

learn in response to external

rewards e.g. certificates or

the fear of failure.

Learners are motivated to

learn in response to internal

incentives e.g. the desire to

achieve; the urge to grow;

the satisfaction of

accomplishment.

SOURCES: Knowles, 1975: 19-21; Areglado et al., 1996: 19; Vincent, 1999: 2

The Mocker and Spear descriptive model can furthermore be elaborated on by using the

Staged Self-Directed Learning Model developed to describe how learning programmes

might produce graduates who have self-direction (Grow, 1991: 58). The Staged Self-

Directed Learning Model (hereafter SSDL) takes its inspiration from the Situational

Leadership Model of Paul Hersey and Kenneth Blanchard (1988), presented in their


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influential text, The Management of Organizational Behavior. In this work, teaching

was reconceptualised in the following way:

different learners have different abilities to become self-directed;

teachers must adapt their teaching methods in response to these differences;

and

the basic tenets of self-direction can be taught.

If one now combines the outcomes of the Mocker and Spear model with the

Grow/Hersey and Blanchard model in tabular form (TABLE 3.2), one finds the

following:

TABLE 3.2: Comparison of the Mocker & Spear and Hersey & Blanchard Models of SDL

Mocker & Spear Model Grow/Hersey & Blanchard Model

(SSDL) Learning situation

Learning objectives controlled by ...

Means of learning controlled by ... Level of self-direction

Low self-direction Formal

learning

Institutions Institutions

Learner is dependent on the teacher for learning

Teacher is the authority or coach

Moderate self-direction Non-formal

learning

Institutions Learners

Learner is interested in learning

Teacher is the motivator or guide

Intermediate self-direction Informal

learning

Learners Institutions

Learner is actively involved in learning

Teacher is the facilitator

High self-direction Self-directed

learning

Learners Learners

Learner is motivated and self-directed in his/her learning

Teacher is the consultant or delegate

SOURCES: Adapted from Lowry, 1989; Grow, 1991


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These days, terms such as ‘lifelong learner’ and ‘an evidence-based approach to

learning’ are commonplace, and are often linked to SDL. Learning needs are expressed

in the form of focused questions or problems, which are solved using steps in learning.

These steps include (Snell, 2000: 2):

clarifying the issue to be solved;

deciding on the most efficient way to learn;

critically appraising the information acquired;

trying out the solution in practice;

evaluating the outcome; and

reflecting on the broader implications for learning in practice.

These changing philosophies of learning have been associated with a shift to

instructional strategies that foster and facilitate lifelong, self-directed and reflective

learners. These steps mentioned above are also closely linked with the PBL approach,

which will be discussed later in this chapter.

3.3.7.3 The lack of learner-centred approaches in the education of

chartered accountants

Educational philosophies at all levels of education have evolved over the past few

decades to a move from teacher-directed to self-directed (i.e. learner-centred) models

(Newman, 2002: 200). Even within the CA fraternity the call for more learner-centred

approaches to teaching has ‘fallen on deaf ears’ and surveys have revealed a

disappointing lack of learner-centred approaches (Adler & Milne, 1998: 12). The

question may be asked why higher education institutions generally have shied away

from these approaches.

Adler and Milne have found three reasons for this, namely:

a) Student readiness

The lack of student readiness creates a substantial barrier to the use of learner-centred

approaches such as SDL. In the study it was found that students were not mature


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enough to engage in self-directed activities, as they placed too great an expectation on

the role of the ‘teacher’ in the learning process. Another factor identified was

cultural/language divisions within the learning process (Adler & Milne, 1998: 12-15).

b) Teacher support mechanisms

Educator support mechanisms comprise teaching resources as well as structural support

(i.e. infrastructure) (Adler & Milne, 1998: 15). The lack of qualified ‘tutors’ and

adequate space to work with small groups (e.g. when utilising problem-based activities)

were cited as major barriers (Adler & Milne, 1998: 16).

Other issues identified were the lack of educator development in applying a learner-

centred approach rather than a teacher-centred approach and what was labelled as

‘university traditions’ (Adler & Milne, 1998: 17). This may refer back to the vision of

teaching within a faculty that must be filtered down within the faculty.

c) Non-reflective teaching approaches

Barriers listed here were the failure of teachers to keep abreast of educational

developments and to recognise skills development as a goal of learning. Educators

seem to be oblivious to their shortcomings and omissions in their teaching (Adler &

Milne, 1998: 17).

From the study it was also clear that the single focus of ‘teaching content’ coupled with

the lack of curriculum re-development were huge barriers in moving towards a learner-

centred approach (Adler & Milne, 1998: 17).

3.3.8 Myths, realities and challenges of self-directed learning


In the previous sections, a detailed analysis of SDL in terms of its characteristics and

the current theories surrounding it was given.


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The next section will point out certain ‘controversial’ aspects of SDL by providing an

overview of the myths surrounding it, the realities of SDL and also the challenges one

faces in utilising it.

3.3.8.2 Myths of self-directed learning

a) Autonomy

Myth statement: Working in a group limits the freedom and self-directedness of a

single learner.

Most efforts to understand self-direction in learning to date have centred on the notion

of an instructional process in which the learner assumes a primary role in planning,

implementing, and evaluating the experience. Chené (1983: 40) addressed the concept

of autonomy, which she largely equated with SDL. Chené distinguished between two

meanings of autonomy, where one view is psychological and the other “is related to a

methodology which either assumes that the learner is autonomous or aims at achieving

autonomy through training”.

In a book entitled Self-Directed Learning: A Practical Guide to Design, Development,

and Implementation, Piskurich (1993:4) defines self-directed learning as “… a training

design in which trainees master packages of predetermined material, at their own pace,

without the aid of an instructor” (refer to the questionnaire in APPENDIX B, statement

44). This may be interpreted as implying that SDL is a process for the ‘single’ learner –

i.e. is not group-bound.

Even though Piskurich focuses on SDL as an individual ‘activity’, SDL in a group setting

is possible and may be a workable solution. Although the learner must coordinate the

preparation and implementation of the learning with the other learners in his/her group,

the character of SDL is not lost in a collaborative or group setting. It is therefore

important to note that SDL should not be confused with absolute autonomy (Böhne et

al., 2002: 10). One school of thought notes that SDL is based on the autonomous,


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independent individual (i.e. student) who chooses to undertake learning for personal

growth (Merriam & Caffarella, 1999).

In their analyses of learning, Strong (1977) and Chené (1983) argued that autonomy

cannot simply be equated with learner control over goals and methods of learning.

These authors assert that truly autonomous learning can only occur when learners have

full knowledge of all possible alternative learning methods. In practice it means that

when adults take action to acquire skills and knowledge in order to effect these

interventions, they are realising their autonomy in the act of learning and they are

investigating that act with a sense of personal meaning (Brookfield, 1985: 14; Areglado

et al., 1996: 28).

In the above one is made aware of the fact that the group activity of SDL may be

contrary to what the literature suggests about autonomous SDL. Kerka (1994: 4) took

her myth about SDL to the other extreme by pointing out that SDL is not about learning

in isolation. The solitary learner or so-called “intellectual Robinson Crusoe” is not what

SDL is about, as learning is increasingly being viewed within a social (group) or cultural

context.

SDL in a group environment typically involves a deeper commitment from teachers

because they need to focus their energy on each learner, as well as on the group as a

whole. Hiemstra (1988) has described this teaching-learning transaction in SDL

situations as a “learning partnership”.

b) Emancipation

Myth statement: Working in a group might lead to disempowerment of individuals.

Of all the models of SDL they reviewed, Merriam and Caffarella (1999: 304) found that

the Hammond and Collins model (1991) is the only one that explicitly addresses the

goal of promoting emancipatory learning and social action within a group as a central

tenet of SDL. In the Hammond and Collins model, learners critically examine the social,

political, and environmental contexts that affect their learning and develop both


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personal and social learning goals. However, Merriam and Caffarella found no studies

using this model as a conceptual framework.

Merriam and Caffarella (1999) also identified the promotion of emancipatory learning

and social action as one goal of SDL, as did O’Donnell’s (1999: 251) critical theory of

‘selves-directed learning’ in that it has as its purpose the emancipation of individuals

from domination and exploitation.

Brookfield (1980) found that learners working part of the time in isolation often come

together in what he calls a “fellowship of learning”, where competition among learners

is balanced with a degree of cooperation and sharing within a group. Can this perhaps

be seen as the emancipation of the individual in SDL?

c) Socio-cultural perspective

Myth statement: SDL fosters group conformity.

Schooler (1990) viewed self-directedness as a cultural adaptive mechanism that permits

a society to respond to change. Successful societies adapt more readily. According to

Vann (1996), there are studies that suggest self-direction is an orientation learned

through socialisation. Percival (1996) takes exception to this characterisation; she

distinguishes between learning as a social activity (the constructivist view) and as a

socialised, conditioned response (the behaviourist view), noting the oppressive potential

of behaviourism (Kerka, 1999: 2).

The constructivist perspective or view of learning assumes that knowledge acquisition is

a continuous process of building and reshaping understanding as a natural consequence

of experience in the world (Parks Daloz, 2000: 104). Constructivism has important

implications for teaching and learning, as this theory proclaims that learning is active

rather than passive (Kaufman, 2003: 215, 216). In addition, learning is also described

as a collaborative process in which the individual understanding has its roots in social

interaction.


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Another school of thought stresses the social construction of knowledge and the social

context of learning (Fischer & Scharff, 1998: 4). Maehl (2000: 51) asks: “Is SDL

possible if knowledge is socially or culturally constructed?” One of Brookfield’s

criticisms of SDL research (Long, 1994) was that it ignored the social context by

focusing on the individual, isolated learner – a notion also endorsed by Tough. Long

also refutes Brookfield’s criticism in an analysis of more than 50 studies where as much

as 90% of the studies were concerned with SDL in social settings.

3.3.8.3 Realities of self-directed learning

a) Empowerment to self-direction

For several decades SDL has been a major focus of adult education (Kerka, 1999: 1),

although the notion of its centrality in adult learning tends to be assumed without

question (Rowland & Volet, 1996: 90).

Similarly, in British learning centres, O'Mahony and Moss (1996: 30) found that adult

basic education learners identified a common bond and developed a collective self-

direction through work on a student committee; it also enhanced their sense of

individual self-direction.

A study of empowerment in community groups (Kerka, 1999: 2) suggests that group

learning processes can empower individuals to move from low to high self-directedness.

In addition, the enhancement of individual SDL abilities tends to help groups become

more empowering.

b) Communal learning

In order to use SDL, workers do not need to go through complex, comprehensive

programmes. SDL occurs in the workplace every day: when one worker asks advice

from another, SDL has occurred. SDL can be formalised in the workplace by providing

an environment that makes it acceptable for individuals to question and seek

information (Confessore, 1992: 9).


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Perhaps O'Donnell (1999: 251) goes the furthest in emphasising the collective over the

individual dimension when he presents a rationale for what he calls “selves-directed

learning”. Such communal learning is based on Habermas’s concept of communicative

rationality, part of which includes the process of reaching understanding through the

cooperative negotiation of common definitions of a situation.

Building on the liberatory approaches of Paulo Freire, O'Mahony and Moss (1996), note

that SDL can be used just like any other approach to deliver a traditional curriculum.

c) Assessment

Piskurich (1993: 30-31) points out that SDL cannot be effectively developed in

situations where either the content is so obvious and effective that it is difficult to

assess, or where the learning materials constantly change because of the dynamic

environment, with the result that learners are unable to study.

3.3.8.4 Challenges of self-directed learning

a) Self-directed learning must be ‘taught’

Learners must be prepared and orientated to use SDL in their learning. They should

not be “thrown into the strange waters of SDL” (Knowles, 1980). Because of this

variation in the readiness for self-direction, it is important to note that assistance will

have to be given to learners once they start the process of SDL by way of facilitation

(Brockett & Hiemstra, 1985: 33). There may be initial hesitancy, frustration and

confusion about the use of SDL and many educators will also require special training in

certain techniques that promote SDL and therefore LLL (Hiemstra, 1992: 107/108).

One such a technique is the use of case studies, which will be discussed in Chapter 5.

Despite the fact that the use of case studies in accounting education is likely to

increase, very little is known about how educators should use case studies. While it is

suspected, as Gallagher, Stevenson and Fordyce (1998: S49) suggest, for example, that

traditionally “the case study has been used to allow students to apply theories studied


CHAPTER 3 114

in courses to practical business problems”, this is not the only way in which accounting

educators can use case studies.

b) Self-directed learning and cross-cultural perspectives

Braman (1998) found a significant relationship between readiness for SDL and

individualism. The goals of an individual and his/her cultural group may be in conflict,

thus hindering the opportunity for self-direction. He argues that more research

examining SDL from cross-cultural perspectives is needed.

In their study of SDL in community learning centres, Rowland and Volet (1996: 100)

also call for greater awareness of socio-cultural perspectives. They suggest that a more

post-modern view of the ‘self’ in SDL challenges the notion of universal individualism

and that, from this perspective, adult learning has significance for the community in

which the individual learns as well as for the individual learner.

c) Collaborative aspects of self-directed learning

No one can be completely autonomous all of the time and in all situations and some

writers challenge the exclusive emphasis on the ‘autonomous self’ (Kerka, 1999: 2).

They call for wider recognition of the interdependent and collaborative aspects of SDL.

Matuszowicz (1996) provides one example of this in his work, which focused on

developing self-direction in homeless adults. For perhaps the first time in their lives,

the members of this group recognised themselves and others as learning resources and

learned through the practice of interpersonal behaviours and skills such as giving and

receiving feedback.

d) Use of technology

One of the major misunderstandings in the SDL debate about enhancing learning with

new media (e.g. technology), is the assumption that technological advances will, by

virtue of their very existence, improve the quality of learning. New technologies and

media must be more than add-ons to existing practices. New technologies and learning

theories must together serve as catalysts for fundamentally rethinking what learning,


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working, and collaborating can and should be in the next century (Fischer & Scharff,

1998: 5).

Gray (1999: 120) proposes that the Internet may be one of the most powerful and

important SDL tools in existence. The Internet does have the liberating potential to

deliver new modes of learning, overcome resource, time, and place barriers, and

equalise learning opportunities. However, income imbalances still exist among users;

vested interests may act to exert control over what is transmitted and who has access

to it; and instructional deficiencies in online learning have yet to be adequately

addressed (Merriam & Caffarella, 1999; Hiemstra, 1992: 107).

According to the visionary, Malcolm Knowles (1975), by 2020 all learning, from

elementary school through postgraduate education, will be based on the principles of

SDL (Hatcher, 1997: 37). How close is this vision to becoming a reality?

Supporting Knowles's contention is Bedard's assertion (1997: 288) that new social

realities will force the next century to become a ‘learning century’. Bedard believes that

more and more learning will take place outside of traditional teacher-student

interactions. The speed of information proliferation and the complexities of new social

networks and workplace transformations will make SDL abilities imperative.

e) Self-directed learning – a future learning methodology?

It would be extremely short-sighted to suddenly proclaim that SDL is the learning

methodology of the future by virtue of the use of advanced technology. Perhaps it is

more appropriate to think of SDL as an ideal mode of learning for certain individuals

and for certain situations (Böhne et al., 2002: 9). When reflecting on SDL, one has to

remember that no act of learning can be self-directed if it means the absence of

external sources of assistance. Tough (1967, 1979) repeatedly highlighted the strong

reliance on external sources, both human and material, in the conduct of learning

(Hiemstra, 1992: 107; Spear, 1992: 127).


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Even as more learning shifts to electronic media, Gray (1999: 122) thinks it likely that

forms of teacher control will still persist. Teachers rather than learners often dominate

seemingly democratic interactive facilities such as e-mail forums. Although the Internet

has been promoted as accommodating different learning styles, ‘hypertext’ does not

suit all types of learners (Skillman, 2000: 68).

Gray (1999) cites a study of Swedish adults showing that those from the upper classes

made the greatest gains from SDL. Will other socio-economic groups achieve greater

self-direction through the use of information technology, or will IT perpetuate the

inequities? It is also possible that those upcoming generations, especially those for

whom the Web is becoming a natural habitat, are adapting to change by developing an

SDL orientation (McCausland, 2000: 50, 52; 2002: 44).

f) Assessment

Many variables can alter the effectiveness of SDL. One such variable is the extent to

which students are responsible for their own learning. Since assessment drives

learning, the intended goals of SDL will not be realised unless assessment methods

reflect these goals. However, use of such assessment threatens many widely accepted

values and procedures of traditional education, especially the reliance and over-

dependence on ‘objective’ and efficient testing methods (Arndt, 2003: 2).

3.3.9 Facilitation of self-direction in learning

3.3.9.1 Roles of educators

Knowles (1975) and Tough (1979) were amongst the first to argue that facilitating self-

direction in learning must be incorporated into organised learning. The following list

summarises points made by several writers (e.g. Reisser 1973; Cross 1978; Ash 1985;

Bauer 1985; Brockett & Hiemstra 1985; Brookfield 1985; Hiemstra 1982, 1985; Milne &

McConnell, 2001) regarding the ways adult educators can best facilitate SDL using a

PBL approach that will:


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help the learner identify the starting point for a learning project and discern

relevant modes of examination and reporting;

encourage adult learners to view knowledge and truth as contextual, to see

value frameworks as cultural constructs, and to appreciate that they are able to

act on their world individually or collectively to transform it;

create a partnership with the learner by negotiating a learning contract for goals,

strategies, and evaluation criteria;

be a manager of the learning experience rather than an information provider;

help learners acquire the needs assessment techniques necessary to discover

what objectives they should set;

encourage the setting of objectives that can be met in several ways and offer a

variety of options for evidence of successful performance;

provide examples of previously acceptable work;

make sure that learners are aware of the objectives, learning strategies,

resources, and evaluation criteria once they have been decided upon;

teach inquiry skills, decision-making, personal development, and self-evaluation

of work;

act as advocates for educationally underserved populations to facilitate their

access to resources;

help match resources to the needs of learners and help learners to locate these

resources;

help learners develop positive attitudes and feelings of independence relative to

learning;

recognise learner personality types and learning styles;

use techniques such as field experience and problem-solving that take

advantage of adults' rich experience base;

develop high-quality learning guides, including programmed learning kits;

encourage critical thinking skills by incorporating such activities as seminars;

create an atmosphere of openness and trust to promote better performance;

help protect learners against manipulation by promoting a code of ethics; and

behave ethically, which includes not recommending an SDL approach if it is not

congruent with the learners' needs.


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It is true that educators who are familiar with being in control of both the syllabus and

classroom may find it difficult to relinquish some control to the students involved in

PBL. As Albanese and Mitchell (1993) suggest, the role of facilitating discussion, rather

than directing it, is foreign to many teachers, even those with a great deal of

experience.

3.3.9.2 Roles of educational institutions

For educational institutions and employers engaged in providing SDL experiences,

Hiemstra (1982, 1985) and Brockett and Hiemstra (1985) recommend the following:

have the faculty meet regularly with panels of experts who are able to suggest

curricula and evaluation criteria;

conduct research on trends and learners' interests;

obtain the necessary tools to assess learners' current performance and to

evaluate their expected performance;

provide opportunities for self-directed learners to reflect on what they are

learning;

recognise and reward learners when they have met their learning objectives;

promote learning networks, study circles, and learning exchanges; and

provide staff training on SDL and broaden the opportunities for its

implementation.

Finding a ‘blueprint’ that faculties can use in SDL and PBL is not a simple matter.

Faculty resistance is often connected with insecurity and anxiety about the learning

process and comes as part and parcel of courses designed to promote increased

independence (Milne & McConnell, 2001: 74).


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3.4 PROBLEM-BASED LEARNING

3.4.1 Introduction

Böhne et al. (2002: 7) state that SDL seeks to optimise the learner’s control of the

learning process. “It is the learner rather than an institution, a teacher or a learning

programme that chooses the educational objectives, emphases and learning strategies.”

Learners set their own goals, analyse a given problem, observe the learning progress

and assess the learning results. What is interesting in their view is that SDL is born

from an approach known as PBL (Böhne et al., 2002: 6).

The development of continuous learning skills is an essential educational outcome of

PBL. Branda (1990) states that SDL is an integral part of PBL: in fact, PBL cannot occur

in the absence of SDL. During the last 15 years, PBL has received much attention in

education literature and more particularly medical education literature (Schmidt, 1998:

429; Arndt, 2003: 1). Over the last decade many developed and developing countries

around the world have also initiated problem-based curricula (Kantrowitz, Kaufman,

Mennin, Fulop & Guilbert, 1987).

PBL has been identified as one way to facilitate the development of abilities to become

self-directed in learning (Barrows, 1983; Wood, 1995, Dunlap, 1997). A strong

argument in favour of PBL is therefore that it provides a learning experience in the way

cognitive psychologists suggest people successfully acquire, retain and recall knowledge

and is found enjoyable by students (Norman & Schmidt, 1992).

PBL is an instructional method that challenges students to ‘learn to learn’, working

cooperatively in groups to seek solutions to real-world problems. These problems are

used to engage students’ curiosity and initiate learning of the subject matter. PBL

prepares students to think critically and analytically, and to find and use appropriate

learning resources (Watson, 2002).


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3.4.2 Defining problem-based learning

PBL may be regarded as a range of pedagogic approaches that encourage students to

learn through the structured exploration of a research problem. Torp and Sage (2002:

15-16) regarded PBL as “…focused, experiential learning (i.e. minds-on and hands-on)

organised around the investigation and resolution of messy, real-world problems.”

Advocates of PBL argue that the development of the ability to become self-directed in

learning should be inextricably linked to professional development in the discipline

(Williams, 2001: 3) in that learners are engaged problem-solvers, identifying the root

problem and the conditions needed for a good solution, pursuing meaning and

understanding and becoming self-directed learners in the process.

PBL furthermore fosters the development of knowledge and skills within a professional

discipline by “... utilising authentic situations that have been encountered by

professional practitioners [i.e. CAs] as the initial stimulus for student learning activity”

(Barrows, 1986).

PBL clearly rejects the idea of ‘telling’ as sufficient for learning, but simply ‘doing’

according to Biggs (1989) is also not sufficient for learning. The learning activity must

be planned, reflected upon and processed if learning is to take place (Ault & Carver,

1987: 167).

3.4.3 Problem-based learning environments

Reinmann-Rothmeier and Mandl propose the following guidelines for PBL environments

(Böhne et al., 2002: 6/7):

situated and authentic learning: allowing students to solve realistic problems will

enable them to apply their knowledge in practical situations. Authentic problems

will motivate students;

learning from multiple perspectives and contexts: solving several related

problems which all require the same basic skill will make it more likely that the

skill can be applied in a different practical situation;


CHAPTER 3 121

learning in a social context: learning and problem-solving should be done in

student groups. If students have experts as models they can acquire skills,

knowledge and orientation; and

learning with instructional support: complex problem-solving tasks without

instructional support will often demand too much from the students and will lead

to ineffective learning. Many students need instructions and help for solving

problems. The learning environment should provide knowledge for solving the

problem.

3.4.4 Principles of problem-based learning methodology

The PBL process is normally done with groups of students and these sessions may last

2-3 hours. By grappling with complex situations, and probing deeper into issues,

looking for connections, students are motivated to:

determine whether a problem exists;

define what they believe the problem to be;

identify their current understanding of the problem;

identify further information needed to understand the problem more fully;

identify resources from which further information can be obtained;

generate possible solutions;

analyse their solutions, their information gathering and their reasoning; and

if desired, recommend and present a solution (Milne & McConnell, 2001: 63).

In two of his works (1983, 1993), Schmidt described six principles of PBL instructional

methodology:

the amount of existing prior knowledge: this is the key determinant of the

amount of new information that can be processed. Unlike traditional problem-

solving techniques, it is critically important that students should have sufficient

prior knowledge to be able to solve the problem in the right way. PBL acts as

catalyst to promote the acquisition of new knowledge;


CHAPTER 3 122

prior knowledge needs to be activated: in order to understand and remember

new information, prior knowledge needs to be activated by cues embedded in

the context in which the information is being presented. Prior knowledge

activation may occur through engagement of students in small group

discussions;

knowledge is structured: this means that accessibility of knowledge is dependent

on the way it is structured in memory. Because the practical situations drive the

learning of content and skills, students are continuously restructuring their

knowledge as they work towards the best outcome;

elaborate on the information: this improves storing and retrieving information

from memory. Elaborations include writing summaries and discussing

information with peers;

future retrieval of information depends on encoding retrieval cues: the closer the

learning situation resembles the situation in which the information is to be

applied, the better the retrieval of the information is likely to be. Authentic

practical situations that reflect the types of situations students will face as

professionals serve as the framework for storing contextual cues, thereby

improving the student’s ability to retrieve relevant knowledge when faced with

similar situations in the future; and

motivation: this is intertwined with learning effectiveness and learner

performance. Students are more motivated and spend more time processing

information when they are discussing authentic practical situations which they

perceive as relevant and meaningful.

From a rationalist perspective of learning (Williams, 2001: 7), PBL utilises instructional

strategies that can assist prospective CAs to process and store knowledge in such a way

that it can be easily retrieved when required in future.


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3.5 LIFELONG LEARNING IN PRACTICE USING A SELF-DIRECTED LEARNING APPROACH

3.5.1 Introduction

The old adage of ‘studying’ followed by ‘working’ or then completing a postgraduate

qualification is no longer tenable. Learning is no longer place- and time-bound. In an

emerging knowledge society, an educated person will be someone who is willing to

consider learning a lifelong process.

In a climate of continual change and innovation, LLL is a critical professional

developmental objective that has a direct impact on an organisation’s effectiveness and

ability to compete and innovate (Dunlap, 2005: 5). LLL envisages that humans benefit

from an opportunity to learn over a sustained period (McDonnell, 2005: 54). More and

more knowledge, especially specialised knowledge, is acquired well past the age at

which people complete formal schooling, and in many situations through educational

processes that do not centre on a traditional schooling approach (Fischer & Scharff,

1998: 2).

An educational strategy most likely to produce professionals prepared for LLL is SDL.

SDL is effective because it is learner-centred, addresses practice needs, solves problems

in a timely way, often involves active learning and builds on prior experience (Slusarski,

1994: 72-73; Rossi, 2002: 1). All of these are key factors in adult learning and CPD.

3.5.2 Understanding lifelong learning

LLL presents us with one of those concepts that is almost easier to define by saying

what it is not. From various academic sources we may conclude the following about

LLL and lifelong learners:

lifelong learners know that learning is not difficult. Lifelong learners see a need

to learn something but they are not compelled or coerced to do so;


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lifelong learners know that learning cannot be produced in people and people

cannot produce learning in others;

LLL is not dependent on time and place;

LLL is not teacher-driven but rather learner-driven, as it involves learning and

living;

LLL does not involve memorised theory so much as it requires the application

thereof; and

LLL is not prescribed by a curriculum (Priesnitz, 2003: 1-2).

LLL is thus about trusting learners to learn what they need to know and about teachers

helping them to learn and grow in their own ways, thereby developing learners’

capacity for and disposition towards LLL (Dunlap, 2005: 5) (refer to the questionnaire in

APPENDIX B, statements 48 & 54).

3.5.3 Self-directed learning as a vehicle for lifelong learning and

continuous professional development

Why would SDL therefore be such an important aspect of LLL and CPD? Knowles

(1975: 14-15) identified three reasons for promoting SDL:

learners who take the initiative (i.e. proactive learners) for learning learn more

and in a better way than learners who “... sit at the feet of teachers passively

waiting” (i.e. reactive learners). Proactive learners tend to retain and apply what

they have learnt longer and better than reactive learners;

SDL is more in tune with our natural processes of psychological development.

As individuals grow up they develop an increasingly deep psychological need for

independence – i.e. to become increasingly self-directed; and

new developments in education (e.g. multi-modal learning environments;

continuously changing curricula; ‘quantity of information’ etc. as in the case of

RAU), indicate that learners should take a great deal of initiative in their own

learning. Students entering these programmes without having learned the skills

of self-directed inquiry will experience anxiety, frustration, and often failure.


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3.5.4 Implications of self-directed learning in continuous

professional development

Knowles (1975: 15-16) also identified the implications of SDL. These are that one can

no longer:

define the objective of education as that of transmitting what is known to the

learner. The main purpose of education must now be to develop the skills of

inquiry;

think about learning as ‘being taught’. Learning should become the same as

living and one should have an outlook of ‘no living without learning’; and

equate education with the youth. Education or learning has become a lifelong

process.

3.6 A SOUTH AFRICAN PERSPECTIVE

SDL is important in practice – in fact it is the educational strategy most likely to produce

any professionals prepared for LLL and able to meet the changing needs of the

business community in which they function. In previous sections of this chapter, it has

been shown that the use of SDL and PBL methodology may have a positive implication

for ‘learning’ in general. Would it therefore not then mean that the use of these

methodologies could greatly improve the ‘learning’ of prospective CAs? This is even

more important when one understands that the transformation of the CA profession is

of the utmost importance in the country with its ongoing drive to provide black CAs.

University educators are increasingly under an extreme amount of pressure to ensure

that already overloaded syllabi are completed on time and at the correct standard to

ensure that these prospective CAs have the necessary knowledge and skills to attempt

writing their QEs and or PPE.

Even though the use of technology within SDL is proclaimed as the way of the future,

one has to bear in mind that the average South African learner, owing to a history of


CHAPTER 3 126

socio-economic disparity, may not be able to access all the technological tools that are

available. This may further be exacerbated by lack of student readiness – i.e. the

student’s ability to adapt to a formal higher education milieu.

This country has a limited number of accredited higher education institutions that may

provide qualified (black) CAs but with an excess of students all seeing themselves as

prospective CAs. One is now placed in the difficult position of having to balance a

supply of scarce resources against an over-demand for education.

At RAU a large portion of the students studying to become CAs come from a previously

disadvantaged background. In effect this also means that many of these students are

taught in a language that is not their mother tongue. As language is still a very real

barrier in learning for many, SDL and PBL can be very effective as it may provide

consensus through the cooperative or communal negotiation of common definitions of a

situation. Learning with instructional support is therefore vital, as solving complex

problems and tasks without instructional support may mean that language again

becomes a barrier and may lead to ineffective learning.

Communal learning and problem-solving should also be done with experts as models in

these groups. Just as the CA profession is to be transformed, so should the educators

involved in teaching these students. If potential black CAs can have a (black) expert as

a model, the acquiring of skills, knowledge and orientation will be so much simpler, as

there would be no cultural or language difference. The problem, however, is that once

black CAs qualify, they are immediately snatched by the big accounting firms at a

premium. Few of them come back into academia to share their knowledge and

expertise.

Introducing ways and means of providing adaptive undergraduates (i.e. prospective

CAs) who possess the necessary SDL and PBL skills to ensure an output of ‘lifelong

learners’ will remain the biggest challenge in educating and training CAs in South Africa



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3.7 SUMMARY

Over the past 15 years a number of studies have criticised the way learners are taught

accounting at higher education institutions. A particular target has been undergraduate

programmes overcrowded with technical content – sometimes at the expense of

broader and more general aims, including LLL. Amongst other things, it is these LLL

and SDL skills that prospective CAs should possess for success in the profession.

Society has also started to demand the continued professional accountability for the

competence of CAs in an era of knowledge proliferation and technological change.

As a means of overcoming these perceived deficiencies, educators have been called

upon by IFAC to ensure that learners are more active participants in the learning

process. One essential way to meet this demand is to engage in continuous

professional education where LLL has emerged as one of the major challenges for the

worldwide knowledge society of the future.

Learning to learn involves developing skills and strategies that help individuals to learn

more effectively and to use these effective learning strategies to continue to learn

throughout life. This process results from, leads to, and enhances a questioning spirit

and a lifelong desire to learn. Competence is therefore not a static term, but evolves

over a lifetime of learning.

CPD for CAs can therefore be defined as ‘learning activities for developing and

maintaining the capabilities of professional accountants to perform competently within

their professional environments.’ At higher education institutions (at an undergraduate

level) the focus of accounting education should change from mere knowledge

acquisition and accumulation to one based on a ‘learning to learn’ approach – an LLL

approach that encourages learners to take responsibility for their own learning and

become active and competent participants in the learning process.

Competence refers to the demonstrated ability to perform relevant roles or tasks to the

required standard. Whereas capability refers to the attributes held by individuals that


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give them the potential to perform, competence refers to the actual demonstration of

performance.

LLL is something a CA does for self-growth purposes or as an investment in him- or

herself. SDL should be an introduction to the potential CA’s education standards where

SDL is used as an approach to learning and SDL would be described as a vehicle for

CPD at an undergraduate level. Professional education programmes in undergraduate

accounting must be designed to expose prospective CAs to the strategies that can assist

them to develop the ability to become self-directed in continuing to learn. CPD is aimed

at an LLL approach or a ‘learning to learn’ approach. CPD is applicable to all CAs,

regardless of the sector or the size of the business in which they operate.

Current trends in educational theory make the following fundamental assumptions

about learning: learning is a process of knowledge construction; learning is knowledge-

dependent; learning is situation-bound; learning needs to account for distributed

cognition; and learning is affected by motivational issues.

The notion of self-direction in learners has existed under numerous different guises

from classical antiquity to the present day. The ‘modern’ origins of SDL can be traced

back to as early as 1918. In 1961 the term SDL was first popularised when it was

described as adults involved in a learning activity without external support or guidance.

Whether SDL is individual or collective, emancipatory or oppressive, inevitable or not,

the biggest misconception might arise in trying to capture the essence of SDL in a

single definition. It is clearly a multifaceted concept that should not be approached

from one perspective. Although there may be no single correct way to look at SDL, the

issues involved warrant debate because they shape educational practices.

Studies on the effectiveness of learning in various environments have shown that adults

learn what they want to learn (i.e. self-efficacy or self-effectiveness) and because they

are task-orientated their learning may be linked to problems, challenges or needs

arising from their social or vocational roles.


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Educational philosophies at all levels of education have evolved over the past few

decades with a move from teacher-directed to self-directed (i.e. learner-centred)

models. Even within the professional accounting fraternity, the call for more learner-

centred approaches to teaching has ‘fallen on deaf ears’ and surveys have revealed a

disappointing lack of learner-centred approaches.

This may be ascribed to the lack of student readiness to use a learner-centred approach

such as SDL; the lack of ‘qualified teachers’ and adequate space to work with small

groups; as well as the failure of teachers to keep abreast of educational developments

and to recognise skills development as a goal of learning.

SDL does not replace, but complements formal learning. It may be associated with

increased curiosity, may improve critical thinking skills and understanding, and may be

more likely to result in a change in practice performance. These factors all point to a

move from ‘surface’ to ‘deep’ learning.

SDL is an integral part of PBL: in fact, PBL cannot occur in the absence of SDL. PBL has

been identified as one way to facilitate the development of abilities to become self-

directed in learning. PBL is an instructional method that challenges students to ‘learn to

learn’, working cooperatively in groups to seek solutions to real-world problems. These

problems are used to engage students’ curiosity and initiate learning the subject matter.

PBL prepares students to think critically and analytically, and to find and use

appropriate learning resources.

The old adage of ‘studying’ followed by ‘working’ is no longer tenable. Learning is no

longer place- and time-bound. In the emerging knowledge society, an educated person

will be someone who is willing to consider learning a lifelong process.

SDL is in fact the educational strategy most likely to produce professionals prepared for

LLL and able to meet the changing needs of clients. SDL is effective because it is

learner-centred, addresses practice needs, solves problems in a timely way, and often

involves active learning and builds on prior experience.


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In facilitating SDL and PBL both the educator and the institution have an important role

to play. SDL must be incorporated into organised learning. It is true, however, that

educators used to being in control of both the syllabus and classroom may find it

difficult to relinquish some control to the students involved in PBL.

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131

CHAPTER 4 A holistic critique of ethics

4.1 INTRODUCTION

he aim of this study is to investigate the utilisation of CPD of ethics amongst

prospective CAs. Before this process can commence, one needs to appreciate the

ethical values applicable to CAs.

Ethics is a topic that is receiving a great deal of attention throughout society today.

This attention is an indication of both the importance of ethical behaviour to

maintaining a civil society, and a significant number of notable instances of unethical

behaviour.

In Chapter 2, it was explained that IFAC and SAICA are both involved in establishing

and enforcing codes of ethics. It was also noted that these activities constitute an

important part of the profession’s multilevel regulatory framework. But ethical

behaviour requires a consideration of more than a few rules of conduct and regulatory

activities. No professional code of ethics or regulatory framework can anticipate all the

situations which require personal judgements about ethical behaviour that may arise.

Accordingly, this chapter commences with a detailed discussion of ethics, focusing on

the theories on which ethics are built, and including a discussion of descriptive ethics,

perspective ethics and meta-ethics. It then continues to investigate the individual and

T

A holistic critique of ethics

CHAPTER 4 132

combined concepts of morals, ethics and values where the integration of these is also

investigated.

This is followed by a detailed discussion of the concepts of general and professional

ethics by looking at the issue of a profession. This then culminates in an investigation

of the narrower concept known as ‘business ethics’; however, morals and values are

still incorporated into the discussion, and stakeholder theory is also dealt with.

The chapter then concludes with a detailed discussion of professional ethics applicable

to CAs. It also provides examples of business ethics in practice.

As the questionnaire, used as part of the empirical analysis in this study, wished to

provide an assessment of whether CPD of ethics is understood and possible to

communicate to prospective CAs at an undergraduate level, the reader will be directed

to some theoretical aspects of ethics included in the questionnaire to be described and

discussed in Chapters 7 and 8 of this study.

A full discussion of business ethics as it applies to a prospective CA will be undertaken

in Chapter 5.

4.2 THE THEORY OF ETHICS

4.2.1 Introduction

Ethics as a subject is as old as humanity itself. Ethics is derived from the Greek word

ethos or ethikos, meaning ‘character’.

4.2.2 Definitions

Ethics can be defined as “the philosophical study of morality and, accordingly, morality

is clearly identified as the characteristic subject matter of ethics” (Huss & Patterson,

1993: 236). Morality, derived from the Latin mores or ‘custom’, focuses on the ‘right’

and ‘wrong’ of human behaviour (Baker, 1996: 78-79; Boynton & Kell, 1996: 70/71;).


CHAPTER 4 133

Thus, ethics is about people and deals with questions about the way people act

towards one another (Cragg, 1997: 232). Miettinen (2004: 2) goes even further and

states: “Ethics is basically a discipline about good life.”

Wheelwright (1959, quoted by Robertson, 1993: 118) defined ethics as “that branch

of philosophy which is the systematic study of reflective choice, of the standards of

right and wrong by which it is to be guided, and of the good toward which it may

ultimately be directed”.

In this definition, one can detect three key elements:

ethics involves questions requiring reflective choice (decision problems);

ethics involves guides of right and wrong (moral principles); and

ethics is concerned with the consequences of decisions (Robertson, 1993: 118).

Ethics has thus since the beginning of time sought to define right and wrong conduct.

In the Collins Concise Dictionary (Sinclair, Wilkes & Krebs, 2001: 495) ethics is defined

as “… the philosophical study of the moral values of human conduct and of the rules

and principles that ought to govern it” and “… the moral fitness of a decision, course

or action.” It could also be called ‘philosophy of morals’ or ‘the language of morals’

(MacIntyre, 2004: 1)

According to Trevino and Nelson (1999: 34) ethics “... is a moral perspective that asks

you to judge your conduct in terms of what’s right and wrong, what’s decent, what’s

good, what’s honest, what’s honourable. The reason to be ethical is simply that it’s the

right thing to do.”

4.2.3 Theories of ethics

Although this study aims to look at the issue of ethics within the framework for a CA,

one has to be cautious not to fall into a theoretical and philosophical discourse of the

subject. However, one cannot discuss ‘ethics’ per se without providing some

fundamental theoretical background to it. Ethics can be divided into three distinctive


CHAPTER 4 134

theories or groups, namely descriptive ethics, prescriptive ethics and meta-ethics

(Rossouw & Van Vuuren, 2004: 42).

4.2.3.1 Descriptive ethics

Descriptive ethics provides an accurate description of the ethical dimensions of

business. It describes and explains the state of ethical affairs so as to enable managers

to manage these affairs (Stevens, 1999: 116; Rossouw & Van Vuuren, 2004: 43).

Various theories of moral development provide a good descriptive approach to ethics

with pioneering work done by Jean Piaget (1948) and Lawrence Kohlberg (1981) (e.g.

Maclagan, 1994: 3; Schick, Ponemon, Fettus & Nagoda, 1998: 276; Rossouw & Van

Vuuren, 2004: 43-45).

a) Piaget

Studies of ethical beliefs in relation to behaviour are generally founded on a

psychological model derived from the work of Piaget (The moral judgement of the

child) (Baker, 1996: 76; Rossouw & Van Vuuren, 2004: 43), which theorised that moral

development must account for the active interpretation and cognitive organisation of

the individual (Carroll, 1996: 17).

Piaget studied many aspects of moral judgement, but most of his findings fit into a

four-stage theory i.e. sensorimotor stage (infancy); pre-operational stage (toddler and

early childhood); concrete operational stage (elementary and early adolescence); and

formal operational stage (adolescence and adulthood) (Huitt & Hummel, 2003).

Children younger than 11 years (i.e. during the sensorimotor stage and pre-operational

stage) think about moral dilemmas one way; they believe that rules are handed down

by adults or by God and that one cannot change them (Crain, 1985: 118).

There are many more details to Piaget's work on moral judgement, but he essentially

found a series of changes that occur after the age of 11, just when the child begins to

enter the general stage of formal operations. Intellectual development, however, does


CHAPTER 4 135

not stop at this point. This is just the beginning of formal operations, which continue

to develop at least until age 16 (Crain, 1985: 118-119).

b) Kohlberg

The ethical or moral development paradigm of the individual is well established in

psychology by Kohlberg (Wright, Cullinan & Bline, 1998: 31, 32). His Cognitive Moral

Development Theory is based on the assumption of co-operative social organisations

(Gul, Y Ng & Jen Wu Tong, 2003: 382).

Kohlberg’s theory of moral development was dependent on the thinking of the Swiss

psychologist Jean Piaget and the American philosopher John Dewey. All these men

had emphasised that human beings develop philosophically and psychologically in a

progressive fashion (Barger, 2000).

Kohlberg believed (and was able to demonstrate through empirical studies) that people

progressed in their moral reasoning (i.e., in their bases for ethical behaviour) through

a series of stages. He believed that there were six identifiable stages which could be

more generally classified into three levels (Barger, 2000). Only the first three of these

stages shared many features with Piaget's stages (Crain, 1985: 119).

Kohlberg's classification is outlined in FIGURE 4.1 on the following page.

The first level of moral thinking is that generally found at the elementary school level

and is especially common in children, although adults can also exhibit this level of

reasoning. In the first stage (stage 1) of this level, people behave according to

socially acceptable norms because they are told to do so by some authority figure (e.g.

parent or teacher). This obedience is compelled by the threat or application of

punishment. The second stage (stage 2) of this level is characterised by a view that

right behaviour means acting in one's own best interests. It also shows a limited

interest in the needs of others, but only to a point where it might further one’s own

interests, such as 'you scratch my back, and I’ll scratch yours’ (Sridhar & Camburn,

1993: 729; Fraedrich, Thorne & Ferrell, 1994: 830).


CHAPTER 4 136

STAGE LEVEL OF MORAL

REASONING

SOCIAL ORIENTATION

SOCIAL PERSPECTIVE

LEVEL VIEW OF PERSONS

6 Universal ethical

principles (“Principled conscience”)

Mutual respect – a universal principle

Sees how human fallibility and frailty are impacted on by communication

5 Post-conventional

Social Contract Contractual perspective

Recognises that contracts will allow persons to increase welfare of both

4 Authority and social

order (“Law and Order”)

Social systems perspective

Able to see abstract normative systems

3 Conventional

Interpersonal accord and conformity (“Good boy/girl”)

Social relationship perspective

Recognise good and bad intentions

2 Individualism and

self-interest (“What’s in it for me?”)

Instrumental egoism

Sees that (i) others have goals and preferences; and (ii) either conforms to or deviates from norms

1 Pre-conventional

Obedience and punishment

Blind egoism No view of persons; only self and norms are recognised

FIGURE 4.1: An outline of Kohlberg’s Stages of Moral Development

SOURCES: Crain, 1985 (adapted); Kohlberg, Levine & Hewer, 1983 (adapted)

The second level of moral thinking is that generally found in society, hence the name

‘conventional’, and is typical of adolescents and adults. In the first stage of this level

(stage 3) the self enters society and is characterised by an attitude which seeks to do

that which will gain the approval of others. The second stage (stage 4) is one oriented

to abiding by the law and responding to the obligations of duty (Sridhar & Camburn,

1993: 729-730; Fraedrich, Thorne & Ferrell, 1994: 830).

The post-conventional or third level, also known as the ‘principled’ level, consists of

stages five and six of moral development. The realisation that individuals are separate

entities from society now becomes salient. Kohlberg felt that this level is not reached

by the majority of adults. Its first stage (stage 5) is an understanding of social

mutuality and a genuine interest in the welfare of others. Individuals are viewed as

holding different opinions and values, and it is paramount that they be respected and

honoured impartially. The last stage (stage 6) is based on respect for universal


CHAPTER 4 137

principles and the demands of individual conscience (Sridhar & Camburn, 1993: 730;

Fraedrich, Thorne & Ferrell, 1994: 830).

c) Foucault

The issue of moral behaviour has further been refined by the incorporation of a

postmodernist perspective. Of importance here is the work done by Michel Foucault

(1986, quoted by Baker, 1996: 78). His work, very closely related to the deontological

approach to be discussed later in this section, claims that moral behaviour consists of

actual behaviour of individuals in relation to their moral code (Baker, 1996: 79).

4.2.3.2 Prescriptive ethics

Prescriptive or normative ethics provides guidance as to what is ethically ‘good or bad’.

Rational arguments framed within theoretical approaches to prescriptive ethics

normally provide the grounds for deciding whether something is morally pleasing or

culpable (Stevens, 1999: 116).

Through the centuries a number of such moral theories have been developed. These

include:

the Virtue Theory of Aristotle;

the Deontological Theory of Kant; and

the Utilitarian Theory of Mill (Rossouw & Van Vuuren, 2004: 58).

Each of these will be discussed below.

a) Virtue Theory

The Virtue Theory dates back to the ancient philosophers, e.g. Plato, but the Greek

philosopher Aristotle is most closely associated with it (Rossouw & Van Vuuren, 2004:

59). Aristotle noted the etymological relation between ethics (or ήθος, ‘virtue of

character’ as he refers to it) and habit (έθος). As Peacock (2004, quoted by Dolfsma,

2006: 209) observes about Aristotle’s position: ‘‘Thus if we get into the habit of acting

virtuously (by performing virtuous acts), we will acquire a virtuous character.’’


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The primary question the Greeks sought to answer was not: "What actions are

universally morally right?" Instead, it was: "What is the best sort of life for human

beings to live?" (Mintz, 1995: 252) For most Greek philosophers, the end or goal of

life was happiness or a life of excellence, and the excellences were virtues (MacIntyre,

2004: 98-99).

In writing about Aristotle's account of the virtues, MacIntyre (1984: 149-150) states

that the exercise of virtue requires “... a capacity to judge and to do the right thing in

the right place at the right time in the right way.” Judgement is exercised not through

the routine application of rules, but by possessing a ‘character’ which enables choices

to be made about what the good of humankind is and by holding in check desires for

something other than that which will help to achieve this goal (Mintz, 1995: 252).

According to Aristotle, the excellence of character and intelligence cannot be separated

(MacIntyre 2004: 93, 95, 96).

b) Deontological Theory

Where virtue ethics claims that morality depends on the moral virtues of one’s

character (as proclaimed by Aristotle in Nicomachean Ethics (Dolfsma, 2006: 209)),

deontological ethics insists that moral action requires conformity to moral principles

(MacIntyre, 2004: 183-186). Deontological theorists included WD Ross and John

Rawls but the classical representative of this theory was the German philosopher

Immanuel Kant. His influential work on ethics, first published in 1785, was called

Fundamental Principles of the Metaphysic of Ethics (Rossouw & Van Vuuren, 2004: 63).

Contrary to Aristotle’s Virtue Theory, Kant’s Moral Theory claims that there is indeed

an objective moral rule that can guide all our moral decisions regardless of the

circumstances (Baker, 1996: 75; Wright et al., 1998: 30). A major limitation of the

deontological theory, however, is that it excludes the consideration of consequences

(Agarwal & Malloy, 2002: 247).


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c) Utilitarian Theory

The Utilitarian Moral Theory claims that the morality of actions should be judged by

their consequences. In his influential book Utilitarianism, published in 1863, John

Stuart Mill became the classic representative of this theory (Rossouw & Van Vuuren,

2004: 67). Very often this is also referred to as the ‘teleological approach’ or

‘consequentialism’ (Baker, 1996: 76). Mill was convinced that actions are good when

they contribute towards fulfilling the ultimate goal of human beings (MacIntyre, 2004:

196, 231).

4.2.3.3 Meta-ethics

Meta-ethics has been part of philosophical thinking throughout the ages and is

applicable to both descriptive ethics and prescriptive ethics (Rossouw & Van Vuuren,

2004: 86) – a sort of hybrid approach.

Meta-ethics is of a reflective nature; the prefix ‘meta’ indicates that it is about rather

than on ethics. The problem with moral theories is that they do not offer any advice

on dealing with situations where moral theories collide. Meta-ethics moves away from

the question of what is morally right or wrong to an approach that questions which

moral theory is more valid than the others (Rossouw & Van Vuuren, 2004: 87).

4.3 THE MORALS, ETHICS AND VALUES DEBATE: A BROAD-BASED DISCUSSION

4.3.1 Introduction

From the previous discussion one can conclude that the issue of ‘moral’ and ‘the

morality of good and bad’ seem to be the essence of ethics. Although some scholars

have argued that ethics and morality are vague and fuzzy concepts, ethics and morality

are “... a highly practical invention”, as society expects that one conforms to a context

that endows human activity with meaning (Satava, Caldwell & Richards, 2006: 281).


CHAPTER 4 140

Before this study proceeds with a comprehensive investigation and discussion of ethics

and its related fields, this section will now only consider the issue of ‘morals’ versus

‘ethics’; ‘morals’ versus ‘values’; and that of ‘ethics’ versus ‘values’. These combined

yet mutually exclusive aspects can be illustrated by the diagram (FIGURE 4.2) on the

following page.

Morals

ValuesEthics

FIGURE 4.2: Combining morals, values and ethics

This section will not only look at these three aspects individually but will also consider

their overlapping aspects as suggested in FIGURE 4.2 above. Some of the issues

discussed at this point will be revisited when the concept of business ethics is discussed

in section 4.5.

4.3.2 Morals and ethics

Ethics and morals are closely connected yet separate subjects (Anon, 2004). This was

also evident from the definitions/description above in section 4.2.2. Morals are first

and foremost summed up in religious commandments, laws, rules and regulations that

in no uncertain terms define right and wrong (Baker, 1996: 78; Prozesky, 2003: 79).

Yet, real life and real situations are not always that simple. Is it immoral to kill a mass

murderer? Is it moral to kill an enemy in war? Is abortion a moral or immoral act?

There are many such difficult questions that are very hard to answer and this may be

the reason why ethics is a separate subject from morals. “If morality is the view that

all human beings are either right or wrong, then 99% of them are wrong” (Prozesky,


CHAPTER 4 141

2003: 11).

Morals can be described as a code for good conduct based on the experience of the

culture or race – i.e. the Virtue Theory. A more detailed definition would be “…

concerned with or relating to human behaviour, especially the distinction between

good and bad or right and wrong behaviour” (Sinclair et al., 2001: 972).

Morals are therefore agreed upon standards of good conduct of individuals and groups

(Cragg, 1997: 234). For the Greek philosopher Aristotle, morality started with the self

(Rossouw & Van Vuuren, 2004: 60).

At a time when secularisation is a major feature of public and professional workplaces,

when the influence of religion, traditionally a highly influential channel of moral

influence, and when ethical nurture through the traditional family has been

significantly reduced, education comes to the fore as the single most important means

of fostering moral competence (Prozesky, 2001: 6).

Moral codes have their place but morals tend to continue beyond their time. For

example, in the Jewish faith it is immoral to eat pork. At the time this moral rule was

formulated pork was a source of disease and sometimes death so the rule made sense;

today this is less of a real threat (Anon, 2004).

No society can flourish, especially in the long term, unless its people understand what

it means to be an ethical human being and unless large numbers of the population

genuinely seek to live in ways that transcend selfishness, violence and dishonesty by

means of an active concern for the well-being of others (Miettinen, 2004: 6).

For this reason human beings need to re-invent and re-empower conscience because

it is seen as the “... inner voice of ethics, of right and wrong, of good and evil”

(Prozesky, 2003: 11). A dilemma occurs now when choices between right and wrong

have to be made. This leads to an ethical problem.


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4.3.2.1 Ethical problem

What is an ethical problem? A problem situation exists when one has to make a choice

among alternative actions, and the right choice is not absolutely clear. An ethical

problem situation may be described as one in which the choice of alternative actions

affects the well-being of other persons (Robertson, 1993: 118).

4.3.2.2 Ethical behaviour

What is ethical behaviour? One finds two standard philosophical answers to this

question (Arens & Loebbecke, 1991: 69):

ethical behaviour is that which (in terms of the ethical problem) produces the

greatest good; and

ethical behaviour is that which conforms to moral rules and principles.

Ethical behaviour is necessary for a society to function in an orderly manner. It can

be argued that ethics is the glue that holds a society together (Arens & Loebbecke,

1991: 69). What would happen if one could not depend on the people one dealt with

to be honest? If employers and colleagues all consistently lied, it would be almost

impossible for effective communication to occur (MacIntyre, 2004: 18).

The need for ethics in society is sufficiently important that many commonly held ethical

values are incorporated into laws. For example, laws dealing with driving while

intoxicated concern responsible citizenship and respect for others. However, a

considerable portion of the ethical values of a society cannot be incorporated into law,

because of the judgemental nature of certain values (Arens & Loebbecke, 1991: 68).

It is practical to have laws that deal with cheating, stealing, lying, or deceiving others.

It is far more difficult to establish meaningful laws that deal with many aspects of

principles such as integrity, loyalty, and pursuit of excellence. That does not imply that

these principles are less important for an orderly society.

Why would people then act unethically?


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4.3.2.3 Unethical behaviour

Most people define unethical behaviour as “conduct which differs from what they

believe would have been appropriate given the circumstances” (Arens & Loebbecke,

1991: 68).

Each person decides for him- or herself what he/she considers unethical behaviour to

be, both for him- or herself and for others. It is important to understand what causes

people to act in a manner that society decides is unethical. Bok (1976) suggests that

the inability to identify an ethical dilemma (ethical problem) is the reason individuals

behave immorally. This immoral behaviour comes about as a result of significant

differences that exist between the beliefs of the individual and that of an ‘organisation’.

This leads to (ethical) conflict, which is thus the result of contradictory obligations and

duties to two or more interest groups (Carroll, 1996: 10).

Arens and Loebbecke (1991: 69) provided two primary reasons why people act

unethically, namely (i) the person's ethical standards are different from those of society

as a whole; and/or (ii) the person chooses to act selfishly. In many instances, both

reasons exist.

a) The person's ethical standards differ from those of general society

Extreme examples of people whose behaviour violates almost everyone's ethical

standards are rapists and drug dealers. Most people who commit such acts feel no

remorse when they are apprehended because their ethical standards differ from those

of society as a whole (Arens & Loebbecke, 1991: 69) (refer to the questionnaire in


There are also many far less extreme examples where others violate our ethical values.

When people cheat on their tax returns, treat other people with hostility, lie on

employment applications, or perform below their competence level as employees,

most of us regard that as unethical behaviour. If the other person has decided that

this behaviour is ethical and acceptable, there is a conflict of ethical values that is

unlikely to be resolved (Arens & Loebbecke, 1991: 69).


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b) The person chooses to act selfishly

A considerable portion of unethical behaviour results from selfish behaviour. Political

scandals, for example, could result from the desire for political power; cheating on tax

returns and expense reports is motivated by financial greed; and performing below

one's competence and cheating on tests are typically due to laziness.

In each case, the person knows that the behaviour is inappropriate, but chooses to do

it anyway because of the personal sacrifice needed to act ethically (Arens & Loebbecke,

1991: 69).

4.3.3 Morals and values

Walton (1998: 124) describes (business) ethics as an integrated force within the

cultural and economic environment of business and very often cultural factors have an

impact on the ethical behaviour of people regardless of their ethical view (e.g.

utilitarian, deontological or virtues) (refer to the questionnaire in APPENDIX B,

statement 8).

Ethical values are affected by and exist between the other cultural and economic values

in the business environment. Morals and moral content may therefore be described in

the form of core moral values. This has to be done, however, with a full awareness

of the economic context and the dominant cultural realities in which these exist

(Prozesky, 2001: 3). It is interesting that Duska (1998) noted: “People learn values

at their mother’s knee, or they never learn them.”

The following cultural realities currently exist (RSA, 1996d: Chapter 2):

globalisation;

democracy;

human rights and responsibilities; and

cultural diversity.


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4.3.3.1 Globalisation

Economic globalisation has already made it imperative to think globally and not just

locally (Kriek, Beekman & Els, 2005: 9, 151). In that wider arena, the spread of

democracy is not just a political development of immense, world-changing significance.

It is also a tide of change that has extremely important implications for the nature of

professionalism and for ethics itself (Prozesky, 2001: 3). National and international

business transactions largely rely on shared perceptions as to what ethical or

acceptable behaviour is (Ahmed, Chung & Eichenseher, 2003: 89).

As more and more nations with vastly different histories of economic development

enter the global economy, the potential for misunderstandings based on different

expectations of business ethics is greatly exacerbated (Ahmed, Chung & Eichenseher,

2003: 89). Are nations morally and ethically distinct entities, or do the circumstances

of morality and rightness pertain to all humans regardless of origin? How much of a

role does ‘cultural divergence’ play within a globalised economy?

The renowned utilitarian philosopher Peter Singer puts it this way: “To what extent

should leaders see their role narrowly, in terms of promoting the interests of their

citizens, and to what extent should they be concerned with the welfare of citizens

everywhere?” (Eisenberg, n.d.)

To understand the forces that produce rapid economic development, one has to realise

that these forces lie largely in man himself – in his fundamental motives and in the way

he recognises his relationships with his fellow man. Achievement motivation is the

cornerstone of the whole economic development process. This is, at least to some

extent, the outcome of shared value systems and the ‘ethos’ of society at large

(Ahmed, Chung & Eichenseher, 2003: 90).

4.3.3.2 Democracy

Democracy can be described as a movement of power downward, sideways (from an

elite to all the adult members of society) and inward (into the convictions, values and

decisions of each individual) (Prozesky, 2001: 3; 2003: 43). It is this third aspect of


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democracy that is the most important and yet the least understood and the least

developed.

Extending power to the citizenry is in itself no guarantee that they will use that power

wisely and well. For that to happen, education and moral strength are needed. Need

one be reminded that Hitler came to power under the liberal, democratic Weimar

constitution to grasp the point that more is needed than just empowering the people,

or than both educating and empowering the people? Unless the people are also

governed by sound ethical values, they may well use their democratic power very

unwisely and destructively, as the people of Germany did in 1933 (Prozesky, 2001: 3-4)


This is why it is not enough to foster a culture of human rights within a democracy.

Equal weight must be given to responsibility, to the duty of every individual to respect

and protect the rights of others just as much as his or her own (RSA, 1996d: Chapter

2). This is what is meant by democracy as involving that third, crucial movement

inward if it is to work for the benefit of the world, namely the movement of power into

the informed and responsible conscience of every individual. The issues of respect and

responsibility will again be addressed in section 4.6.2.

Seen from another perspective, democracy means a lessening of external constraints

in favour of an increase of internal ones such as a contribution to ethical transformation

(Prozesky, 2003: 43). This, clearly, means that democracy needs an ethically strong

population if it is to thrive. It also means that professional life becomes more and more

dependent on internal constraints rather than on external ones, though these do not

and should not disappear (Prozesky, 2001: 4).

4.3.3.3 Cultural diversity

The preceding paragraphs have already brought some key moral values to the fore,

namely responsibility and concern for the rights of others, equality and truth – this last

value being implied and fostered by good education and embodied in the knowledge

that education spreads (Prozesky, 2003: 63). But if one is to arrive at a sound


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conception of the core content of morality, one needs also to take cognisance of

another crucially important reality of contemporary life, namely cultural diversity.

The world has, it seems, always had a diversity of cultures, but only in relatively recent

times has this become a defining feature within most societies, rather than something

outside involving strangers and their ways. Now it is a feature of every classroom,

every business and every profession and with it comes a measure of diversity in that

which people value.

The idea of racial and cultural diversity also features in a paper by Miettinen (2004:

5) where the author cites Gonzales (2003): “To the extent that cultural diversity is seen

as an asset, this global trend seems to contradict the efforts to respect both personal

and cultural ethical pluralism.”

Within a new multi-cultural South Africa, the diversity of people means a diversity of

life-styles, faiths and philosophies. Within this new commonly formed South African

identity, an African ‘ethic’ was born – Ubuntu. Archbishop Desmond Tutu once

described it as “... the essence of being human” (Prozesky, 2003: 5).

Cultural diversity also plays an important role in determining the ethical requirements

of CAs. Therefore, due to national differences of culture, language, legal and social

systems, IFAC believes that the task of preparing detailed ethical requirements “is

primarily that of the member bodies in each country concerned”.

As Prozesky (2003: 63) has articulated, the identity of the accounting profession is

characterised worldwide by its endeavour to achieve a number of ‘common objectives’

and by its observance of certain fundamental principles for that purpose, i.e. the ‘core

content of morality’. These sentiments were echoed in an article which pointed out

that the accounting profession itself is seen as a way of transmitting social norms and

values to confer on or sustain legitimacy in the activities necessary to assure

profitability (Islam & Gowing, 2003: 355).


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4.3.4 Ethics and values

Although a direct causal link exists between ethics and values, these concepts are not

identical. Values can be defined (Rossouw & Van Vuuren, 2004: 5/6) as “relatively

stable convictions about what is good and desirable.” The clear difference is therefore

that one may have values that are not ethical or have absolutely nothing to do with

ethics.

Values are concerned with the way a person will behave in certain situations, whereas

ethics is concerned with the way a moral person should behave. “Values are basic and

fundamental beliefs that guide or motivate attitudes or actions” (Mintz, 1995: 255).

Describing values as ‘relatively stable’ certainly implies that changes may occur over

time. In a groundbreaking study by Brenner and Morlander in 1977, it was found that

the values of a group of sample managers had changed, according to increasing or

decreasing acceptance of ethically charged scenarios depending on the exact situation

(Miettinen, 2004: 4). This was echoed in a study by Lewis in 1989 that came to the

conclusion that values are generally stable but do change over time (Miettinen, 2004:

5).

After this landmark study, various other studies to measure changes in social views

(values) on ethics and business ethics became common. For example, in 1995 Harich

and Curren (1995) found that undergraduate business students were generally less

tolerant of ethically questionable behaviour than those surveyed in 1984.

Peterson, Beltramini and Kozmetsky (1991) found no significant difference in the

responses to 10 business ethics issues between 1980 and 1990. Zinkhan, Bisesi and

Saxton (1989) found an increasing willingness of respondents (MBA students) when it

came to deceptive advertising and bribery of sales agents. This was echoed by Cragg

(1997: 233).

Emerson and Conroy (2004) concluded in their recent study that ethical attitudes of

students appeared to have become higher over time. They found their results to be


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encouraging over the long term in the sense that current students are future business

leaders (Miettinen, 2004: 4).

Within business entities, three different forms of values may be identified. These are

strategic values, work values and ethical values (Rossouw & Van Vuuren, 2004: 6).

4.3.4.1 Strategic values

These refer to the shared conviction of the entity’s desired objectives. Strategic values

therefore point the direction in which the entity wishes to move. These values are

normally found within the entity’s mission and vision statements.

4.3.4.2 Work values

The work values in an entity are those priorities to which the entity’s employees should

adhere. These may be values such as punctuality, innovation and quality.

4.3.4.3 Ethical values

To ensure optimum functionality within an entity, good relations and interaction should

be upheld between various stakeholders. Typically, these ethical values are respect,

transparency and fairness.

For a CA the issue of values is even more important. Cragg (1997: 240) quotes a

foremost accounting lecturer stating that “accounting is not a science; accounting is

an art!” He then continues to make a case by stating that because accounting is an

art it means that judgement has to be exercised. “Judgement, in turn, is shaped by

individual and professional values as reflected in individual and corporate character.

Values are therefore an unavoidable component of the education of accountants”

(Cragg, 1997: 240).


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4.4 GENERAL VERSUS PROFESSIONAL ETHICS

4.4.1 Introduction

A pervasive sense of proper ethical conduct is very important for CAs. Two aspects

of ethics operate in the professional environment: general ethics (the spirit) and

professional ethics (the rules). Mautz and Sharaf have contributed the following

thoughts to the association of general ethics and professional ethics (Robertson, 1993:

118):

“The theory of ethics has been a subject of interest to philosophers since the beginnings of

recorded thought. Because philosophers are concerned with the good of all mankind, their

discussions have been concerned with what we may call general ethics rather than the

ethics of small groups such as the members of a given profession. We cannot look,

therefore, to their philosophical theories for direct solutions to our special problems.

Nevertheless, their work with general ethics is of primary importance to the development

of an appropriate concept in any special field. Ethical behaviour in any activity is no more

than a special application of the general notion of ethical conduct devised by philosophers

for men generally. Ethical conduct draws its justification and basic nature from the general

theory of ethics.”

4.4.2 General ethics

An individual’s ethical orientation (or approach to ethical decision-making) has been

shown to be a major factor influencing ethical sensitivity, which is defined as “the

ability of an individual to recognise that a decision has an ethical component” (Radtke,

2004: 74). Velasquez and Rostankowski (1985) suggest that moral issues exist if freely

performed actions may harm or help others; and the individual must recognise that

he is the moral agent.

People are also constantly confronted with the need to make choices that have

consequences both for themselves and others i.e. the Utilitarian Theory. Too often,

an ethical dilemma arises wherein what is good for one party affected by the choice is

not good for another party affected by the choice. It has been said that in such

situations, individuals should ask two questions: “What good do I seek?” and “What is


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my obligation in this circumstance?” (Boynton & Kell, 1996: 71).

General ethics attempts to deal with these questions by defining what is good for the

individual and society, and by trying to establish the nature of obligations or duties that

individuals owe themselves and each other. Typical examples of prescribed ethical

principles have been developed over the years. These incorporate the characteristics

and values that most people associate with ethical behaviour:

honesty;

integrity;

promise-keeping;

loyalty (fidelity);

fairness;

caring for others;

responsible citizenship;

pursuit of excellence; and

accountability (Arens & Loebbecke, 1991: 68/69)

In considering general ethics, one’s primary goal is to arrive at a set of acceptable

methods for making ethical decisions. Consequently, an understanding of some of the

general principles of ethics can contribute background for a detailed consideration of

the behaviour directed by IFAC Education Standard IES 4 – Profession values ethics

and attitudes (IFAC, 2003a: 59-65).

However, there is one problem with the view of general ethics and that is the inability

to agree on what ‘good’ and ‘obligation’ are. This has ultimately led philosophers to

divide themselves into four distinctive groups of thought.

4.4.2.1 Absolutists

The ethical absolutists say there are universal standards that do not change over time

and that apply to everyone (Arens & Loebbecke, 1991: 68).


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4.4.2.2 Relativists

Ethical relativists do not believe in universal moral rules (Forsyth, 1990 quoted by

Radtke, 2004: 74). They say that people's ethical judgements are determined by the

changing customs and traditions (principles) of the society in which they live and that

there are therefore many ways to look at moral issues (Arens & Loebbecke, 1991: 68).

4.4.2.3 Individualists

This group argues that both the absolutists and the relativists are correct. Every

individual makes numerous life choices that must be guided by unchanging universal

standards, and many other choices that are subject to the changing customs of society

(Boynton & Kell, 1996: 71).

4.4.2.4 Idealists

The tenet of the individualists can be taken further with the ideas of the moral idealists

who assume that good consequences can always be achieved, instead of admitting

that often both good and bad consequences result from every action (Radtke, 2004:

74).

4.4.3 Professional ethics

Earlier in the chapter, various possible definitions or descriptions of ‘ethics’ were given.

Taking into consideration the focus area of this thesis, another more appropriate

definition of ethics as found in the Collins Concise Dictionary (Sinclair et al., 2001: 495)

would be “… a code of behaviour considered correct, especially that of a particular

group, profession, or individual.”

In the earlier definition of ethics by Wheelwright (see section 4.2.2), one of the key

elements was reflective choice. This involves an important sequence of events

beginning with the recognition of a decision problem. Collection of evidence, in the

ethics context, refers to thinking about rules of behaviour and outcomes for alternative

actions. The process ends with analysing the situation and taking action (Robertson,

1993: 120).


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Ethical decision problems almost always involve projecting oneself into the future to

ask what it would be like to live with one’s decisions. Professional ethics decisions

usually turn on these questions: “What written and unwritten rules govern my

behaviour?” and “What are the possible consequences of my choices?”

Philosophers and ethicists have developed numerous theories of ethical conduct.

These theories should be considered in the light of the imperative, the utilitarian, and

the generalisation principles (Cottell & Perlin 1990: 2-7). One could dispense with the

theory/ies of ethics, however, if one were willing to accept the simple rule: “Let

conscience be your guide.”

Before an analysis of professional ethics per se is done, it is important to consider the

term ‘profession’.

4.4.3.1 What is a profession?

Even though the literature does not provide an exact definition for the term ‘profession’

or ‘professionalism’, it seems to be described in terms of a set of evolving

characteristics (Carroll, 1996: 1). Frankel (1989: 110-111) defined a profession as “a

moral community of shared norms, values and definitions of appropriate behaviour”.

Note that a moral concept is evident in this definition but can also be found in the

definitions of ethics earlier in this chapter. Consideration of a set of basic moral values

is a necessary part of ethics research and education and impacts on the goals of ethics

education as specifically applied to the accounting profession. The issue of ethics

education will be discussed in detail in Chapter 5 of this study.

According to IFAC (2001: 16; 2005: 4), a profession is distinguished by certain

characteristics, including:

mastery of a particular intellectual skill, acquired by training and education;

adherence by its members to a common code of values and conduct established

by its administrating body, including maintaining an outlook which is essentially

objective; and


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acceptance of a duty to society as a whole (usually in return for restrictions in

use of a title or in the granting of a qualification).

In the code of conduct produced by SAICA, a further characteristic was added (SAICA,

2002b: 1) namely “rendering personal services to a high standard of conduct and

performance.” (Refer to the questionnaire in APPENDIX B, statement 10)

In a later and updated version of the Code of Ethics for Professional Accountants

released by IFAC (2005: 79), the issue of ethics and the profession was again put to

the fore with this statement: “A professional accountant in business is expected,

therefore, to encourage an ethics-based culture in an employing organisation that

emphasises the importance that senior management places on ethical behaviour”

(Refer to the questionnaire in APPENDIX B, statement 17).

All this seems to suggest that the accounting profession is characterised by the

following:

a specialised body of knowledge;

specific business problems which need accounting expertise;

a long period of formal training;

the capacity for self-regulation; and

status and prestige (Carroll, 1996: 1/2).

Ethics and professionalism are intertwined concepts (refer to the questionnaire in

APPENDIX B, statement 64). Professionalism implies trust and trust is an ethical

concept (Carroll, 1996: 8) (refer to the questionnaire in APPENDIX B, statement 24).

4.4.3.2 The virtues of a professional accountant

Earlier in this section it was noted that ethics basically refers to standards of conduct

that indicate how one ought to behave based on specific values and moral duties and

virtues arising from principles about right and wrong (Mintz, 1995: 251).


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According to the philosopher Aristotle, a virtue is a character trait that enables you to

reach your ‘telos’ – the goal of something (Rossouw & Van Vuuren, 2004: 60).

MacIntyre (1984: 187; 2004: 62) equates virtues to goods (or rewards) that are

internal to practices. Practices, according to MacIntyre (1984: 187), are “... any

coherent and complex form of socially established cooperative human activity through

which internal rewards may be realized while trying to achieve those standards of

excellence specific to that form of activity”.

MacIntyre (1984: 190-192) differentiates between the external rewards of a practice

(such as money, fame, and power) and the internal ‘goods’ that relate to the intrinsic

value of a particular practice. He also points out that every practice requires a certain

kind of relationship between those who participate in it.

Virtues are “... acquired human qualities, the excellence of character which enables a

person to achieve the good life” (Mintz, 1996: 827). The virtues are those ‘goods’ that

define our relationship with others who share the same kind of purposes and standards

of practice. The virtues include truthfulness and trust, justice, courage and honesty.

A practice cannot be sustained without these standards of excellence and perhaps

some others that characterise relationships within a practice. To enter into a practice

is to accept the authority of those standards, obedience to rules, and the achievement

of goods (MacIntyre, 1984: 190-192).

Francis (1990, quoted by Mintz 1995: 254) states that the accounting practice (and

therefore the CA) has the capacity to be virtuous if one realises that it is both a moral

and discursive practice. By moral he means that: "Accounting is a practice involving

human agency that has the capacity to change things in the world." By discursive he

means that accounting not only reports the facts but, importantly, the accountant says

“something (what the accounting report is about) to someone (who the accounting

report is prepared for).” This discursive nature of accounting practice establishes a

moral agency role for accountants.


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One has to remember, however, that those who use accounting information do not

necessarily share the same accounting expertise. This dichotomous relationship

creates an obligation therefore to act ethically (refer to the questionnaire in

APPENDIX B, statements 13, 16 & 17). This inevitably leads to a public perception

that a CA plays the role of a ‘public watchdog’ (Carroll, 1996: 15).

Virtuous practitioners, such as accountants, are concerned about the moral

consequences of what they do. It is therefore ironic that Tang (quoted by Gul, Y Ng

& Jen Wu Tong, 2003: 379) argued that “... chartered professional accountants do not

have a strong understanding of ethical and unethical behaviour in their practices.” One

may look at this statement and think that the authors got it wrong. However, in the

empirical analysis performed on the data collected by way of a questionnaire, very

similar and more interesting conclusions were drawn. These will be discussed in more

detail in Chapters 7 and 8 of this study.

Francis (1990, quoted by Mintz 1995: 254) identifies five internal ‘goods’ that may be

uniquely realised through the practice of accounting:

honesty;

concern for the economic status of others (stewardship or accountability) (refer

to the questionnaire in APPENDIX B, statement 13);

sensitivity to the value of cooperation and conflict;

communicative character of accounting; and

dissemination of economic information.

He also identifies three obstacles in realising these virtues, namely:

the dominance of external rewards (i.e. prestige, status, and money);

the corrupting power of institutions;

and the failure to distinguish between rules and virtues.


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A number of empirical studies (e.g. Ponemon, 1990; Ponemon, 1993; Ponemon &

Gabhart, 1993; and Tsui & Windsor, 2001) have examined the ethical reasoning levels

of professional accountants (CAs) using Kohlberg’s CMD Theory. All these studies have

proven, for example, that there is a systematic relationship between auditors’ moral

reasoning and the way they resolve the conflict at hand. Others have shown that there

is a link between auditors’ ethical reasoning levels and audit quality (Gul, Y Ng & Jen

Wu Tong, 2003: 382) (refer to the questionnaire in APPENDIX B, statement 57).

4.4.3.3 Thoughts on professional ethics

From an ethical perspective, the most important aspect of professionalism is the strong

value that it places on autonomy. Members of a profession believe they have the right

to act autonomously and the profession as a whole expects to be granted relative

autonomy as a social actor (Prozesky, 2001: 10).

Autonomy means literally to be a ‘law unto oneself’, in contrast to being submitted to

the rule of an externally imposed authority (heteronomy). In the context of this study,

autonomy is understood to imply “self-rule” based on reason. An autonomous

professional is a person who, by the very nature of his/her occupation, has to make

decisions based on his/her own judgement and whose actions are based on free

choices (Prozesky, 2001: 10) (refer to the questionnaire in APPENDIX B, statements

14 & 59). The issues of heteronomy and autonomy will be discussed in more detail in

section 4.6.2.

The following thoughts are furthermore provided regarding professional ethics:

“Ethical standards are evolutionary and must change over time. A profession’s

ethical standards reflect the social, legal, economic, political and cultural norms

of a society at a given time. As norms and values and circumstances change,

ethics rules must change as well.” (Pendergast, 2001: 1)


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“Professional ethics are merely a special case of general ethics in which a

profession is given specific guides for conducting matters involving

responsibility to society.” (Cook & Winkle, 1988: 71)

“Professional ethics must extend beyond moral principles. They include

standards of behaviour for professional people that are designed for both

practical and idealistic purposes. While professional codes of ethics may be

designed in part to encourage ideal behaviour, they must be both realistic and

enforceable. To be meaningful, they should be above the law but below the

ideal.” (Boynton & Kell, 1996: 71)

“Professional ethics are imposed by a profession on its members, whom,

voluntarily accept standards of professional behaviour more rigorous than those

required by law ... professional ethics evolve over time and continue to be in the

process of change as the practice of chartered accounting changes.” (Boynton

& Kell, 1996: 71)

“Professional ethics are linked to the profession’s purposes and characteristic

activities and their scope is directly linked to the responsibilities that emerge

from professional relationships with clients and other role-players (other

professions, the judiciary, the state, etc).” (Prozesky, 2001: 12)

It is important to see if the various issues discussed in this section can be collapsed into

a single aspect still encompassing all the above features. One way, perhaps, would be

to collapse them into what is known as ‘business ethics’.

4.5 BUSINESS ETHICS

4.5.1 Introduction

Very often you will find people joking about the term ‘business ethics’, which is

something they refer to as a ‘contradiction in terms’ or an ‘oxymoron’. This and other


CHAPTER 4 159

such beliefs about business ethics play a negative role in the perception people have

about ethics and business ethics. These beliefs may even legitimise and sustain

unethical behaviour within business (Rossouw & Van Vuuren, 2004: 15).

But why should the business world care about (business) ethics? Prozesky (2003: 80)

formulated the following reason: “A strong morality is the only way to achieve what

all of us including the entire business community really want – the best kind of lasting

well-being.” There is also a heightened awareness that some accounting students (i.e.

prospective CAs) entering the work force have had little background on how to deal

with ethical issues (Carroll, 1996: 7).

4.5.2 Defining/describing business ethics

The term ‘business’ as used in business ethics can, according to Rossouw (2002: 2)

be described as “… any situation where people voluntarily enter into transactions of

economic exchange for goods or services. These goods and services can be provided

either by a single person, or by any number of people who have formed an organisation

for that purpose.” Business ethics therefore describes the collective behaviour in terms

of the relations or interactions between economic organisations and others (Rossouw

& Van Vuuren, 2004: 2).

A better description, perhaps, is given by Walton (1998: 118), who describes business

ethics as “the nature and operation of the market system, the corporation as a moral

agent, the behaviour of those who work within it, the meaning of fiduciary

responsibility, conflicts between role values and personal values, and the cluster of

issues related to them.” Integrity plays an important role in business ethics. The

author states that integrity includes moral values which can be identified as reliability,

justice, social responsibility, empathy and courage, principled consistency and

self-control (Walton, 1998: 118). These values were also highlighted in the SAICA

Code of Professional Conduct (2002b: 9-11).

Although the accounting profession was once considered by the public to evince the

highest integrity among all professions, the regard that this profession enjoyed has


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deteriorated in the wake of a succession of high-profile corporate scandals (Satava et

al., 2006: 271) (refer to the questionnaire in APPENDIX B, statement 70).

Trevino and Weaver (2001: 652) state that ethical or unethical behaviour was

previously attributed to issue-related factors such as the impact and size of the ethical

consequences, or circumstantial factors such as ethical climate or culture.

Organisational justice and ethics focuses on similar behaviour. Unethical conduct in

organisations includes a variety of behaviours like lying, cheating or stealing.

Organisational justice focuses on similar behaviour, such as employee theft.

DeGeorge (1997: 41) summed up business ethics perfectly when he stated that “… the

imperative to act with integrity cannot insist on moral perfection. It can and does

demand taking ethical considerations seriously.” This view is also endorsed by

Rushworth M Kidder (2001).

4.5.3 The ‘morals’ of business ethics

According to Wicks (2001: 503) business ethics should be present to create moral

practices in companies which will thus lead them to being successful in the market.

Today, managers are focusing on being successful to the detriment of moral and

ethical practices in the company. The trend in business thinking was that ethics and

business are opposing fundamental concepts and mutually exclusive.

In a business scenario one may ask who should be responsible for acting ethically. The

answer is quite easy – everybody! Ethical conduct within a business is the

responsibility of each and every person involved, either directly or indirectly. There

should be an awareness of and commitment to ethical practices which will inevitably

lead to a ‘healthy ethos’ within the organisation (refer to the questionnaire in

APPENDIX B, statement 60). As Kidder (2001) has put it: “Ethics is not a luxury or

an option: it is essential to our survival.”

Business ethics involves a lot more than mere compliance with company policies, laws

and financial regulations – it encompasses some major business, social and financial


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concerns with high visibility within a company (May, 2005a). Trevino and Nelson

(2004: 23) advocate that “… an organisation must care about ethics because

employees depend on them to help define the boundaries of acceptable and

unacceptable behaviour”.

The decision of management to operate its business ethically is not a new business

philosophy. For example, in the 1930s Rotary International developed its ‘code of

ethics’ which is still in use. It uses four simple questions as a ‘litmus test for ethics’:

Is it the truth?

Is it fair to all concerned?

Will it build goodwill and better friendship?

Will it be beneficial to all concerned? (Arens & Loebbecke; 1991: 71)

Griseri (1997: 11) is of the opinion that business and ethics cannot be separated.

Unethical business practice has its own cost. Although these costs may not be

immediately obvious they may appear at a later stage at a much higher level. Kidder

(2001) goes even further and advocates that there is no such a thing as ‘non-profit

ethics’. Indeed, he even goes on to state that business ethics does not exist; “ … only

ethics!”.

Within a business an entrepreneur may also face ethical dilemmas arising out of the

risks and costs inherent in innovation. Dees and Starr (1992, quoted by Miettinen,

2004: 3) refer to “Frankenstein’s problem” in this context. Dr Frankenstein made

several attempts to avoid the responsibility for his creations and to run away but he

could not.

4.5.4 Business ethics and the stakeholders’ theory

With the introduction of the stakeholders’ theory by the Nobel Prize-winning economist

Milton Friedman (Rossouw & Van Vuuren, 2004: 72), the idea was to generate profit

for stakeholders (shareholders) (Wright et al., 1998: 31).


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Friedman (1962: 133) denied that the business had any social responsibility other than

to make profit for shareholders and stated:

“In such an economy, there is one and only one social responsibility of business – to use its

resources and engage in activities designed to increase its profits so long as it stays within

the rules of the game, which is to say, engages in open and free competition, without

deception or fraud.”

According to this theory, still embraced by a large group of corporate executives, what

matters most in business is beating the competition and maximising the bottom line

(Jackson, 2006: 67).

However, the stakeholders’ theory came under great criticism in a paper by the late

Sumantra Ghoshal. According to Ghoshal (2005, quoted by Bidoli, 2004) many bad

ideas (with regard to ethics and the stakeholder theory) have their origins in the

“dismal influence” of the economists, in particular Milton Friedman’s belief that

business’s sole responsibility is to make money for shareholders. The same belief was

held by Edward Freeman (Rossouw & Van Vuuren, 2004: 72).

Ghoshal argues that the economic model of individual human behaviour (that of the

rational, self-interested, utility-maximising man) is simplistic and has resulted in a

flawed understanding of corporate behaviour (i.e. that corporates exist to maximise

shareholder value).: “Much of the worst examples of recent bad management practices

have their roots in a set of ideas that have emerged from business school academics

over the last 30 years” (Bidoli, 2004).

Kenneth Goodpaster later also took issue with the stakeholder idea and pointed out

that the stakeholder theory “… can be detrimental to both business and society.”

(Rossouw and Van Vuuren, 2004: 84) Goodpaster as well as Brooks (1995: 53) agreed

that businesses have a duty towards its shareholders to maximise profits (wealth), but

this does not mean that it should result in a situation where the interest of stakeholders

are sacrificed for the sake of the shareholders’ interest.


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4.6 MORALS, VALUES AND ETHICS IN PRACTICE

4.6.1 Introduction

The most difficult problem situations arise when two or more rules conflict or when a

rule and the criterion of ‘greatest good’ conflict. As W Michael Hoffman has put it:

“Clearly, the ethical thing to do is not always in the best interest of the party

concerned” (Cottell and Perlin, 1990: x).

To state this cliché is not to solve a problem but to present a set of challenges. How

are individual accountants (i.e. CAs) to think and act when they encounter moral

conflicts? How can persons act as professionals and retain integrity? How can the CA

profession as a whole respond to challenges when values conflict?

That is where practical ethics come in. As Singer (1979: 1) put it: “ … [it’s] about the

application of ethics or morality … practical issues like the treatment of racial

minorities, equality for women … and the obligation of the wealthy to help the poor.”

A ‘pocket guide’ to being ethical was proposed by May (2005b) in what he called his

‘“3R’s” approach’ – namely, respect, responsibility and results.

4.6.2 A ‘pocket guide’ to being ethical

4.6.2.1 The first “R” – Respect

The first "R" of business ethics is respect (May, 2005b). Respect is defined as “…

deferential esteem felt or shown towards a person or quality” (Thompson, 1997). It

is at the core of the principle of human dignity and is therefore a key requirement to

fulfilment of human moral purpose. Respect is an attitude (social value?) that must

be applied to people, organisational resources and the environment (Moment, n.d.).

Respect includes behaviour such as (Maccoby, 2003: 60):


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treating everyone (customers, co-workers, suppliers, shareholders,

stakeholders, etc.) with dignity and courtesy; and

abiding by laws, rules and regulations that exist to protect everybody in the

world and their way of life.

Treating others with respect will lead to a reciprocation of the same treatment. In the

1700s, Robert Owen, an English textile mill owner, ran “… the most profitable

operation in the country by going against prevailing management wisdom, and treating

his employees with respect” (Roth, 2005: 9). Henry Ford, one of the most respected

industrialists of his era, also went against the industry trend by doubling wages,

shortening working hours and providing education, health care and housing for his

employees (Roth, 2005: 9). Both of these men were condemned by their colleagues

at the time, but there was no doubting the long-term success of their enterprises.

Piaget, in his publication ‘The moral judgement of the child’ (Rossouw, 2002: 36),

mentions that each child goes through a moral development process. This moral

development occurs when the child moves from an ethic of heteronomy (morality from

duty) to an ethic of autonomy (morality from inner conviction) (MacIntyre, 2004: 188)


Rossouw (2002: 36) points out that the key to this transition “… lies in co-operation.”

By sharing a common space with others, “… the reciprocity in relationships starts to

dawn”; at that moment one realises the importance of respecting others. For respect

to be an attitude one has to move to a higher stage of moral development, which

means interacting with others and more specifically co-operating with others

(Maccoby, 2003: 60). At this stage the attitude of respect will come to the fore whilst

internal moral values of goodness develop.

Ethical behaviour cannot just be based on an authoritative act or command. Immanuel

Kant argues that if one acts because one is commanded to do so, one may be in a

position to judge whether the command is right or not i.e. the Deontological Theory

(Rossouw & Van Vuuren, 2004: 63; Cragg, 1997: 234). All people therefore have in


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them their “… own moral authority ...” and external authority can provide no criterion

for morality (Rossouw, 2002: 51).

4.6.2.2 The second “R” – Responsibility

The second "R" of business ethics is responsibility (May, 2005b; Walton, 1998: 118).

One’s duty of responsibility extends to customers, fellow employees, the organisation

or business enterprise and one’s self.

Responsible behaviour includes things such as:

providing timely, high-quality goods and services;

working collaboratively and carrying your share of the load; and

meeting all performance expectations and adding value.

It is interesting that by working collaboratively, one exudes responsible behaviour. In

the discussion in the previous section of the attitude of respect, one is struck by the

notion that the attitude of respect occurs only when one treats others with respect

which is then reciprocated. This can only occur, however, if one shares a common

space with others – perhaps working collaboratively with others?

The sense of what is right and wrong is remarkably similar across many societies.

Research done by Kidder (1995, quoted by Parker, 2003: 17) provides a clear set of

common core values agreed to by most people: honesty/integrity; fairness/justice;

compassion; freedom. It is very interesting that the core values of responsibility and

dignity or respect also feature.

The practices of CAs involve providing services to clients through a special relationship

that brings with it various rights and responsibilities, privileges and obligations. The

‘power’ relationship of accountant over client is obviously open to abuse and vice versa.

To ensure that this power is morally and legally legitimate, the accounting profession

has to ‘guarantee’ that its members and the profession as a whole are accountable to

their clients and to the broader society. Accountants have to be seen to be fair and just


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and to act in ways that promote the well-being of individuals and the society. In other

words, they must be ethical (Prozesky, 2001: 11).

In Greek philosophy it was said that the concept of responsibility is presupposed by

different moral attitudes. MacIntyre (2004: 26) states that these presuppositions are

commanded by a technique of persuasion where the concept of rhetoric then comes

into play. The concept of responsibility (and duty) in modern ethics, however, is

secondary to the values of goodness, virtue and prudence (MacIntyre 2004: 81).

In the Second King Report on Corporate Governance, also known as King II, it is stated

that the characteristics of good corporate governance are discipline, transparency,

independence, accountability, responsibility, fairness, and social responsibility

(Institute of Directors, 2002).

From this short analysis of responsibility, it can be said that the value of responsibility

has changed over the past centuries but has also permeated other spheres of ethics

and ‘doing the right thing’. In a modern business environment where all stakeholders

wish to be seen to be ‘doing good’ and ‘doing the right thing’, the principle of

responsibility can also be incorporated into such issues as a business’s corporate social

responsibility and also an environmental impact responsibility (Schultz, 2004: 72).

4.6.2.3 The third “R” – Results

The third "R" of business ethics is results (May, 2005b). Essential to attaining results

is an understanding that the way results are attained – the ‘means’ – are every bit as

important if not more important than the ultimate goals – the ‘ends’. Using the phrase

‘The ends justify the means’ is an excuse that is too often used to explain an emotional

response or action that was not well planned or carefully considered.

Obviously, shareholders and other stakeholders expect a business to show good

results. However, it is also expected that the business attains these results in a legal

and moral manner by being ethical.


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The alignment of human moral purpose with the way in which business is conducted

results in benefits to the company which translate into sustainable profitability. By

treating employees in an ethical way, encouraging trust, co-operation and teamwork

and mutual respect (Maccoby, 2003: 59), businesses can optimise the functioning of

their core component, people.

Rossouw and Van Vuuren (2004: 14) have shown that attending to ethics is crucial for

the survival and sustainability of business. They have shown that ethics can build the

reputation of a business; instil confidence in investors; attract discerning consumers;

and very importantly “… enhance the financial performance [results] of business” –

good ethics is good business. A number of other studies (e.g. Waddock and Graves,

1997; and Preston and O’Bannon, 1997) have also demonstrated the positive

correlation between a business’s social and ethical performance and its financial

performance (Islam & Gowing, 2003: 357).

In a study by The Institute of Business Ethics (hereafter IBE), it was found that

companies displaying a “clear commitment to ethical conduct” consistently outperform

companies that do not display ethical conduct. The Director of IBE, Philippa Foster

Black, stated: “Not only is ethical behaviour in business life the right thing to do in

principle, we have shown that it pays off in financial returns” (Moment, n.d.).

Moreover, there can be no ‘efficient market’ unless people can trust each other.

When ethical behaviour is inspired, the business may profit in many ways. This may

be more than just the maximisation of shareholder wealth. Other ‘profits’ may be that

standards of ethical behaviour pave the way for developing the right ethical culture

within the business (Islam & Gowing, 2003: 357). As the famous Oxford philosopher

RM Hare said: “... the truth [is] that honesty in trade is the foundation for prosperity”

(Prozesky, 2003: 76).

Are these guidelines that one can use to formulate a code of ethics? But why does an

individual or group need a code of ethical conduct (code of ethics)? While it has been

said that a person should be upright and not be kept upright, a code serves a useful


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purpose as a reference or a benchmark for individuals. A code makes explicit some

of the criteria for conduct peculiar to the profession (Robertson, 1993: 119).

Therefore, codes of professional ethics are able to provide some direct solutions that

may not be available in general ethics theories.

4.7 CODES OF PROFESSIONAL ETHICS

4.7.1 Introduction

To create an ethical environment and to monitor the ethical behaviour of a business

and the ethical performance of the employees within a business, ethical guidance or

rules are often formalised in the form of a legally enforceable Code of Conduct or Code

of Professional Ethics (Procario-Foley & Bean, 2002: 103). A code of ethics significantly

affects the reputation of a profession and the confidence in which it is held (Prozesky,

2001: 13). Professional codes of ethics also stress the aim of lifetime adherence to

professional values (IFAC, 1998: 18).

Codes usually distinguish between personal and professional ethics. A professional

code covers only those practices that fall within the occupational domain – those

practices and relationships that form the professional’s working life (Prozesky, 2001:

12). The mere presence of a code of ethics is inadequate and insufficient. Knowing

the professional or organisational code of conduct does not necessarily imply proper

ethical reasoning skills nor does it guarantee ethically praiseworthy character and

behaviour (Acevedo, 2001: 165)

A huge drawback of using codes of ethics was that many businesses thought that by

publicising and betokening their code of ethics they had solved the ‘unethical problem’

widely experienced in business. Their code of ethics became the new ‘moral image’

of the company (Stevens, 1999: 113). Being ethical, however, does not stop here.

Ethical behaviour must be visible and a valued component in an organisation

(Procario-Foley & Bean, 2002: 103/104) but codes of conduct cannot serve as the final

moral authority. What is required is moral character and ethical reasoning ability


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(Carroll, 1996: 34).

Very often it is felt that a code of ethics merely focuses on policy and legality, not

morality and ethics. Such a compliance orientation, based on the fear of getting

caught, usually has little effect on employees’ ethical reasoning skills (Dean & Beggs,

2006: 16). Paine (1994: 111) concurred:

“Even in the best cases legal compliance is unlikely to unleash much moral imagination or

commitment. The law does not generally seek to inspire human excellence or distinction.

It is no guide to exemplary behavior or even good practices. Those who define ethics as

legal compliance are implicitly endorsing a code of moral mediocrity for their organisations.”

The values proposed by a code of ethics must be made practical, and one way of doing

this is to communicate (Stevens, 1999: 114) to and educate the employees of business

in what the code of ethics stands for. Moreover, it may be the case for CAs: they also

need to abide by the code of ethics set for them but this must be communicated to

them. Why then not use their undergraduate studies as a vehicle for communication?

The teaching of (business) ethics will be discussed in detail in the next chapter of this

study.

4.7.2 Codes of ethics for chartered accountants

While one of the main purposes of ethics is to guide the actions of decision-makers,

the role of decision-makers does not fully describe a professional person's entire

obligation. Each person acts not only as an individual but also as a member of a

profession (e.g. CAs) and as a member of society.

There is, furthermore, a direct correlation between ethical behaviour and self-interest

(Fisher, 2003: 97). Ethical decisions will coincide with decisions that are inherently

good for the person in the short or long term. Hence, CAs are spectators (e.g.

observing the decisions of colleagues), advisors (e.g. counselling with co-workers),

instructors (e.g. teaching prospective CA students), judges (e.g. serving on disciplinary

committees of professional bodies), and critics (e.g. commenting on the ethical

decisions of others) (Robertson, 1993: 119/120). All of these roles are important in the


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practice of professional ethics, which was discussed earlier in section 4.4.3.

In 1995, the Financial and Management Accounting Committee of IFAC initiated an

empirical study of Ethical Codes used in corporations. Their focus was on how

corporations developed and used ethical codes, under various labels and in various

guises (Birkett, 2000). Loeb (1990a: 123) also posed the question “... a code of ethics

for academic accountants?”

From the study by Loeb (1990a) it was evident that corporations operate within the

systems of ethics and moral principles of their host communities and within these

communities, such ethical systems or moral principles are seen as just, fair, normal,

or even incontestable; they represent ‘correct’ or commendable ways of thinking or

acting. Accordingly, when these principles are drawn into a ‘code of ethics’ for use

within corporations, they are unlikely to be rejected; they will be more likely to be

accepted voluntarily and willingly by the constituents of corporations - by employees,

customers, suppliers, agencies of government, and the community at large (Birkett,

2000).

Such codes also exist within the CA profession. IFAC (2004b: 11-116) has issued its

Handbook of International Auditing, Assurance, and Ethics Pronouncements, a whole

chapter of which is dedicated to ethics and values within the profession. IFAC also

produced a statement on ethics in 2001 (IFAC, 2001: 1-104) which was followed up

by a comprehensive Code of Ethics for Professional Accountants in 2005 (IFAC, 2005:

1-96).

In Chapter 2, a detailed discussion of the various IESs developed and published by

IFAC was done. IES 4 Standard “Professional Values, Ethics and Attitudes”

concentrates solely on this issue. The importance of ethics for accountants is so

important that this theme runs throughout all the IESs. It even forms an integral part

of IES 7 Continuing Professional Development: A Program of Lifelong Learning and

Continuing Development of Professional Competence, which is the essence of this

study.


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In South Africa, a code of conduct for CAs was developed by SAICA, based primarily

on the code of ethics for professional accountants produced by IFAC (SAICA, 2002b:

1). In the preamble to the Code of Conduct, it states clearly that “this Code deals with

professional attitudes and behaviour” (SAICA, 2002b: 1). The code produced by SAICA

strives to enhance these qualities in all their members, associates and students by

providing appropriate guidance.

It is very interesting that guidance on the other aspects of professionalism relating to

knowledge and skills is given in “... other documents issued by the Institute, the Public

Accountants’ and Auditors’ Board and the Accounting Practices Board” (SAICA, 2002b:

1) and not directly in the Code of Conduct as one may expect.

4.7.3 SAICA Code of Professional Conduct

According to SAICA’s revised Code of Professional Conduct, which became effective on

30 June 2006 (SAICA, 2006d: 113), a professional accountant is required to comply

with certain fundamental principles and not rules. These fundamental principles are:

Integrity: a professional accountant should be straightforward and honest in all

professional and business relationships (SAICA: 2006d: 5). Integrity also

implies fair dealing and truthfulness (SAICA, 2006d: 10).

Objectivity: a professional accountant should not allow bias, conflict of interest

or undue influence of others to override professional or business judgements

(SAICA: 2006d: 5).

Professional competence and due care: a professional accountant has a

continuing duty to maintain professional knowledge and skill [CPD] at the level

required to ensure that a client or employer receives competent professional

service based on current developments in practice, legislation and techniques

(SAICA: 2006d: 5/6).

Confidentiality: a professional accountant should respect the confidentiality of


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information acquired as a result of professional and business relationships and

should not disclose any such information to third parties without proper and

specific authority unless there is a legal or professional right or duty to disclose.

Confidential information acquired as a result of professional and business

relationships should not be used for the personal advantage of the professional

accountant or third parties (SAICA: 2006d: 6).

Professional behaviour: a professional accountant should comply with relevant

laws and regulations and should avoid any action that discredits the profession

(SAICA: 2006d: 6).

CAs are therefore professional in that they satisfy the general requirements of a

profession in the sociological sense, but they also subscribe to a code of ethical conduct

which is said to be superior to the ethical or moral conduct expected of ordinary

persons acting in their daily lives (Baker, 1996 75). It is important, however, to note

that CAs need to keep abreast of changes in these and other codes of conduct. The

use of CPD can be very helpful in this regard.

4.8 SUMMARY

Ethics as a subject is as old as humanity itself. Ethics is derived from the Greek word

ethos or ethikos, meaning ‘character’. Morality, derived from the Latin mores or

‘custom’, focuses on the ‘right’ and ‘wrong’ of human behaviour. Ethics is about people

and discipline; it’s about right and wrong; it’s about consequences of decisions. Ethics

is also about ‘morals’ and ‘morality’ and this can be described in the form of core moral

values. Ethics and morals are closely connected yet separate subjects.

Ethical, moral behaviour is necessary for a society to function in an orderly manner and

this is the glue that holds a society together. Many commonly held ethical values are

incorporated into laws but some ethical values cannot be incorporated into law,

because of the judgemental nature of certain values.


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Although a direct causal link exists between ethics and values, these concepts are not

identical. Values are relatively stable convictions about what is good and desirable but

do change over time. The clear difference is therefore that one may have values that

are not ethical or have absolutely nothing to do with ethics.

Ethical decisions will coincide with decisions that are inherently good for the person in

the short or long-term. If people then do not subscribe to these ethical values they

may act unethically for two reasons, namely a person's ethical standards differ from

those of general society, or the person chooses to act selfishly.

A pervasive sense of proper ethical conduct is very important for CAs. Two aspects

of ethics operate in the professional environment: general ethics (the spirit) and

professional ethics (the rules).

General ethics attempts to deal with these questions by defining what is good for the

individual and society, and by trying to establish the nature of obligations or duties that

individuals owe themselves and each other. Professional ethics deal with the written

and unwritten rules governing a CA’s behaviour and the consequences of his/her

choices.

Business ethics may be described as a governing principle in any situation where

people voluntarily enter into transactions of economic exchange for goods or services.

These goods and services can be provided either by a single person, or by any number

of people who have formed an organisation for that purpose. Business ethics involves

a lot more than compliance with company policies, laws and financial regulations. The

decision of management to operate its business ethically is not a new business

philosophy, and examples from the early thirties can be given to prove this.

The most difficult ethical situation arises when two or more rules of conduct conflict

or when a rule and the criterion of ‘greatest good’ conflict. Codes of professional ethics

are therefore able to provide some direct solutions that may not be available in general

ethics theories and make explicit some of the criteria for conduct peculiar to the


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profession.

Codes of ethics usually distinguish between personal and professional ethics. A

professional code covers only those practices that fall within the occupational domain

– those practices and relationships that form the professional’s working life. In the

case of CAs, the two most commonly known codes are the IFAC code and the South

African version issued by SAICA, which was produced in response to the IFAC code.

No society can flourish, especially in the long term, unless its people understand what

it means to be an ethical human being and unless large numbers of the population

genuinely seek to live in ways that transcend selfishness, violence and dishonesty by

means of an active concern for the well-being of others. Certain forms of grossly

antisocial and destructive behaviour can be criminalised but law enforcement alone

cannot produce a flourishing society, which depends on many things that cannot be

enforced, such as trustworthiness, integrity, respect and honour. It is the task of

morality to foster these.

That is why leading academics, politicians and others are emphasising the need for

ethics education, and why they are calling for the kind of ethics education that reflects

the moral values of at least the most widespread and influential of the world’s moral

traditions and ethical wisdom.

The issue of ethics education will be discussed in detail in the next chapter of this

study.

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175

CHAPTER 5 Ethics education

5.1 INTRODUCTION

necessary part of this study, which investigates the utilisation of CPD of ethics

amongst prospective CAs, is the consideration of a set of basic moral values, which

are part of ethics research and education. This also impacts on the goals of ethics

education that is specifically applied to the accounting profession.

Ethics education has been at the forefront for many years now. But has it made a

difference? This chapter commences by asking whether ethics can be taught. This

leads to an investigation into whether the teaching of ethics is the same as

indoctrinating one’s students. What are the aims of teaching ethics and what are the

problems?

Following the introduction, the chapter then investigates the various perspectives of

teaching business ethics nationally and abroad. It continues with the very important

section of approaching the teaching of ethics, where the focus will be on the teaching

of business ethics at an undergraduate level.

Various approaches will be studied, and in all cases the definition of ethics, as well as

the various theories surrounding it, will be taken into account. This will then be applied

to business ethics. The last section of this chapter concludes by discussing the criticism

of the teaching of business ethics from a South African perspective, since the

A

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approaches that may be followed in the teaching of business ethics elsewhere might

not necessarily work that easily within a South African context.

As with the previous two chapters, the reader will once again be informed where certain

theoretical aspects were tested as part of the questionnaire used in the empirical

analysis to this study.

5.2 TEACHING OF BUSINESS ETHICS: AN OVERVIEW

5.2.1 Introduction

In section 4.5, an apt description of business ethics was given by Walton (1998: 118),

who described it as “the nature and operation of the market system, the corporation as

a moral agent, the behaviour of those who work within it, the meaning of fiduciary

responsibility, conflicts between role values and personal values, and the cluster of

issues related to them.” Before proceeding, one has to note that in the bulk of the

available literature no distinction is made between ethics and business ethics per se, as

business ethics interrogates aspects of ethics in a specific milieu. For the purposes of

this study these two terms should be read interchangeably.

In his 1964 article, Grimstad suggested that accounting (business) ethics could be

taught in each accounting course in an accounting programme or possibly in a separate

course (Loeb & Rockness, 1992: 486). The issue of ethics being a course on its own

versus an integrated approach with other courses will be discussed later on in this

chapter.

The teaching of business ethics has been the subject of an ongoing debate for many

years (e.g. Carlson & Burke, 1998; Baetz & Carson, 1999; Maclagan, 2002). In the UK

this goes back more than a decade, where the issue has been addressed at

undergraduate, postgraduate and post experience levels (Mahoney, 1990; Snell, 1997);

in the USA this has been an even longer debate (Dunfee & Robertson, 1988). Even

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before the seventies, business ethics was widely criticised by the media and the general

public (Baumhart, 1968 quoted by Stevens, 1999: 113).

Over the last few years, issues relating to the teaching of business ethics seem to have

evolved from questions of “Should ethics be taught to students?” to questions of “How

should ethics be taught to students?” (Wright, Cullinan & Bline, 1998: 35). McWilliams

and Nahavandi concurred with this and stated that the question should rather be

whether one can really teach ethics to adult students (2006: 422). It is now accepted

that the teaching of business ethics has become a core part of undergraduate curricula

across the world (Kenny & Eining, 1996: 160; Cragg, 1997: 238).

Advocates of ethics education are optimistic about the positive impact of business ethics

education and adamant about the necessity of it in the higher education setting (Dean

23). Swanson (2004 cited in Dean & Beggs, 2006: 23/24) likened teaching ethics to

teaching other behavioural subjects that have been an entrenched, unquestioned part

of business curricula for decades, such as organisational behaviour and human resource

management. She ultimately wondered why there is still a debate as to whether

business ethics can, in fact, be taught.

Within the higher education context, the importance of ethics education is increasingly

recognised because the possession of knowledge alone is no guarantee of moral

character (Prozesky, 2001: 5; Cowton & Cummins, 2003: 37). Acevedo (2001: 164)

has found that when students are required to write down their understanding of the

term ‘ethics’, their responses are varied: some see it as religion, etiquette or efficiency,

while others relate it to law and professional or organisational codes of conduct.

Learning furthermore plays an important role in our lives as some aspects of our

existence are fixed while others are flexible, and we learn from these experiences

(Prozesky, 2003: 62, 63).

In response to this one may ask: can values (ethics) be taught; and can ethics be

taught at higher education institutions?

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5.2.2 Can ethics be taught?

In the weeks that followed Enron’s and WorldCom’s spectacular falls, much was written

in the popular press and newspapers across the world about the business school

backgrounds of those fallen leaders in the various corporations. Business school

professors were especially singled out as having been negligent in not teaching these

corporate leaders proper business ethics (Dean & Beggs, 2006: 15/16).

Ghoshal (2003: 21) presented this criticism in a scathing attack when he wrote:

“Faculty members need to own up to their own role in creating Enrons. It is their ideas that

have done much to strengthen the practices they are all now so loudly condemning … Much

of the problem has arisen from the excesses of business school academics in pretending that

business is a science. Not only economists but also those in areas such as marketing and

organisational behaviour increasingly treat business as if it were a kind of physics in which

individual intentions and choices either do not play a role or, if they do, can safely be taken

as being determined by economic, social and psychological laws.”

In the literature, a clear distinction is made between moral or ethical reasoning, and

moral or ethical behaviour. The great majority of work examines reasoning; the ability

to empirically link such reasoning with subsequent behaviours and thus gain predictive

power between reason and action appears to have eluded most researchers (Dean &

Beggs, 2006: 20).

The relationship between moral judgement and behaviour has been very problematic to

define. Rest (1979: 260) had a view that “moral judgement is an important factor in

real-life decision making, but that the interaction with other factors complicates the

relationship so that simple, linear correlations can not be expected.” Kohlberg

(previously discussed in detail in section 4.2.3) makes it clear that his work focused on

reasoning rather than behaviour.

The question of the ‘trainability’ of ethical decision-making is multifaceted. Some may

argue that ethics cannot be taught because character development has already

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occurred by the time an individual reaches the age of entering a higher education

institution (Ritter, 2006: 154).

There is little empirical evidence to suggest that a formal business ethics course can

impact on students in such a way as to change their behaviour (Grasso & Kaplan, 1998:

80; Douglas & Schwartz, 1998: 90). The few studies that have actually been conducted

do agree that it is possible to change behaviour by using the concept of participative

learning (Stevens, 1999: 119). Some critics have actually voiced their concern about

these courses, stating that these may weaken rather than strengthen the moral

commitment of students (Cragg, 1997: 240).

Interestingly, Callahan (1980 in Hiltebeitel & Jones, 1992: 39) does not believe that

‘changing moral behaviour’ is an appropriate goal of ethics education but rather that the

‘potential for change’ should be aspired to.

Hiltebeitel and Jones (1992: 37), quotes Bok from a 1976 article as stating: “If other

sources of ethical values have declined in influence, educators have a responsibility to

contribute in any way they can to the moral development of their students.” It is

interesting that May’s virtue of ‘responsibility’, discussed in Chapter 4, even came to the

fore in such a way!

While many argue that ethics or values cannot be taught (e.g. Lampe, 1996; Cragg,

1997; Stevens, 1999; Sims, 2002b), the current literature suggests a contrary stance

(e.g. Sisaye, 1997; Duska, 1998; Birck, 2002: 534). Gioia (2002: 142) asserted that the

idea that lecturers at a higher education institution cannot influence students’ ethics is

absurd. He remarked: “Why on earth would we assume that when we assume that we

can influence so many other educational values and orientations?”

Churchill (1982) offers a solution to this dilemma, suggesting that the key to the

question of the education of ethics lies in the distinction between ethics and moral

values. In Chapter 4 of this study, it was pointed out that ethics concerns the values of

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people. Values can be taught, because values are communicated from one generation

to another (Sisaye, 1997: 234; Stevens, 1999: 119).

Churchill felt very different to this in 1982 by stating that ethics, as a systematic,

rational reflection upon a choice of behaviour, can be taught. Moral values, on the

other hand, may develop much earlier in an individual’s life and the trainability during a

short segment of time is questionable. Melè (2005: 100) also noted that teaching

values could also diminish a concept of ethical teaching by reducing it to a mere

application of rules. Acevedo (2001: 163) stated that training in ethical reasoning,

perception and judgement is correlated to actual behaviour.

If, however, one links the teaching of business ethics with the transfer of values, one

may then agree with Sims (2002b: 393) when he states that the teaching of ethics can

develop a student’s moral reasoning skills, ethical sensitivity and behaviour, in that

acceptable values can be transferred. Empirical evidence lends credence to this point,

demonstrating that the introduction of an ethics component into the classroom can

often lead to improvement in ethical sensitivity, moral reasoning, and even ethical

behaviour (Wittmer, 1992; Weber & Glyptis, 2000; Sims, 2002b; Lowry, 2003). Hence,

it seems likely that a concerted effort to address ethics issues in the classroom is

sometimes able to counter the opposing forces.

Educators and professional bodies need to distinguish between teaching students about

professional values, ethics and attitudes, and developing a sense of ethical behaviour in

a business context (Hall & Berardino, 2006: 406). This may be done by perhaps

merging the financial (accounting) and social imperatives within business ethics

education.

Because this transfer of values occurs from generation to generation, one should rather

be asking if, within a pedagogical environment, this process can be communicated and

integrated within the learning environment. One theorist supported this idea by

suggesting that if students get into the ‘habit’ of applying ethical decision-making

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strategies in a higher education institution setting, they will be more likely to use them

in business situations (Oddo, 1997).

5.2.3 Can ethics be taught to undergraduate accounting students?

Should one perhaps accept that accounting is a discipline “… that is thoroughly ethical

in nature” (Francis, 1990)? A case can be made that accounting indeed has ethical

bases and it is something that can be made use of in the classroom.

Originally published in 1494 (but from 1509 in substantial numbers), the Italian, Luca

Pacioli, was the first to bring out a book where the principles of double-entry

bookkeeping were explained (Bloom & Solotko, 2004; Dolfsma, 2006: 212). For many

years after, double-entry bookkeeping, which allowed for internal controls for

consistency, was known as Italian bookkeeping and would-be bookkeepers would travel

to Italy to study these principles, as did painters to learn from the Italian painters of the

Renaissance.

Beyond the neo-classical view, where utilitarian considerations are the sole ethical

considerations, the balance has always been more towards deontological principles (see

section 4.2.3) and even a communitarian perspective in accounting. Indeed, one

reason for starting to keep accounts was a moral one: to be able to know and keep

track of which individuals and organisations were due how much (De Wal, 1927 cited in

Dolfsma, 2006: 212).

The Dutch colonial East India Company (or VOC) – granted a monopoly by the state to

trade with the East – was the first to regularly publish ‘financial reports’. The struggle

within this company between management and financiers is well-known, with the latter

arguing that the capital invested gave them a right to determine the course of the

company. The Dutch East India Company was the first firm where ownership and

management were separated, leading to a struggle over control wherein moral

arguments played an important role (De Boer, 1957 cited in Dolfsma, 2006: 212).

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In the 20th century, accounting came to be seen as distinct from bookkeeping.

Bookkeeping was the practice or craft of keeping track of the financial aspects of

businesses, whereas accounting was considered to be more scientific. Accounting

involved discussing the principles that underlie the way in which accounts for

institutions can be kept and distinctions between managerial and financial accounting

developed (Dolfsma, 2006: 212).

Not only is it important to keep track of who is due what, but the available budget is

also divided into items that determine what the money may be used for. Spending

such money in ways that are not in accordance with the purpose(s) for which the item

was created is deemed a transgression that will be objected to in ways that suggest

that items in a budget have moral characteristics (Dolfsma, 2006: 212).

The communitarian nature of the practice of keeping accounts (mentioned earlier) is

evident from the way in which the standards that they need to abide by emerged.

Standards, such as the Generally Accepted Accounting Principles (hereafter GAAP), have

over a long period of time developed into an explicit set of rules. In these days and

times the International Accounting Standards Board (hereafter IASB) seem to be able to

act independently in the development of International Accounting Standards (hereafter

IAS), suggesting accounting rules similar to deontological ethical principles (Dolfsma,

2006: 212).

The seemingly positivist approach to accounting standards-setting (Zmyewski &

Hagerman, 1981) turns out to be a communitarian type of discussion. Differences of

degree remain, however, between the Continental European approach, which relies

more on issuing general principles, and an Anglo-Saxon approach, which relies more on

issuing larger numbers of rules for more specific situations (Dolfsma, 2006: 213). The

former is more deontological, while the latter is more communitarian. In both,

however, utilitarian considerations play a role. Perceiving of the process by which IASs

are developed and adopted across countries in terms of the different strands of ethical

thought is likely to be illuminating.

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5.2.4 Is ethics teaching also indoctrination?

Woo (2003) highlighted the importance of producing students who do right rather than

just know right and argued that ethics cannot be taught in the conventional academic

manner. Phillips (2005) followed on by stating that Business Schools have responded

to the mandate to add ethics to their courses, but how best to teach ethics is a topic for

further research.

For many years, universities have therefore been reluctant to teach ethics in the

classroom because of fear of indoctrination or dogma (Huss & Patterson, 1993: 235;

Cragg, 1997: 233). This even led to an ‘ethics witch-hunt’ across the United States of

America where “… values [were] purged from curricula ...” (Brooks & McCarthy, 1989,

quoted by Solberg, Strong & McGuire, 1995: 1).

The issues of dogma and indoctrination can also be illustrated with a quote by Albert

Einstein, who saw at first hand how even the advanced academic quality of German

education and science in the early decades of the 20th century could be subverted by

Nazism. Later in life Einstein would write (Prozesky, 2001: 5) as follows about this vital

insight:

“It is not enough to teach people a speciality. Through it they may become a kind of useful

machine, but not a harmoniously developed personality. It is essential that the students

acquire an understanding of and a lively feel for values. They must acquire a vivid sense of

the beautiful and the morally good. Otherwise, they with their specialised knowledge more

closely resemble a trained dog than a harmoniously developed person.”

Many of the arguments presented for teaching business ethics rely on the assumption

that value-neutral instruction is a fallacy, and therefore that universities should be

instilling the ‘right’ kinds of values in their students (Solberg et al., 1995: 1; Lampe,

1996: 190). Such thinking leads inevitably to discussions of who decides what the

‘right’ values are. Some authors have actually gone further and proclaimed that ‘right

values’ or ‘moral truths’ do not exist (Baker, 1996: 82, 84).

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In Chapter 4, morals were described as a code for good conduct based on the

experience of the culture or race or “[to be] concerned with or relating to human

behaviour, especially the distinction between good and bad or right and wrong

behaviour” (Robertson, 1993: 118). Good (ethical) behaviour is that which conforms to

moral rules and principles.

In Chapter 4 it was also argued that values are concerned with how a person will

behave in certain situations, whereas ethics is concerned with how a moral person (i.e.

one who grasps the distinction between good and bad) should behave. Values are

therefore the fundamental beliefs that guide or motivate attitudes or actions. It was

also pointed out that one may have values that are not ethical or have absolutely

nothing to do with ethics.

Many studies indicate that ethics education leads to more complex and flexible thinking

(Carslon & Burke, 1998). Van Hooft (2001, quoted by Watson, 2003: 93) concurred

with this statement and stated that: “Ethical education needs to achieve ... not just

familiarity with principles and with logical methods of moral thinking, but also a

commitment to those principles and to those moral values and virtues.”

Ethics education cannot be seen as indoctrination if these commonly accepted morals

and values are put forward in a classroom situation. To therefore state that ‘right

values’ do not exist, might be taking a rather extreme view. By coupling values, morals

and ethics the educator may be able to transfer a great number of ideas mutually

agreeable to all in the classroom situation, without indoctrination.

Teaching business ethics to undergraduate accounting students in an ‘educative’ rather

than ‘doctrinarian’ manner may lead students toward understanding ethical concepts

and reasoning by themselves rather than arguing them passively as a list of ‘do’s’ and

‘don’ts’.

In this ‘educative’ atmosphere of self-examination, the students are presented with

other social and cultural issues, including alternate views of ethical behaviour and the

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idea of social responsibility, with which to challenge their belief systems (refer to the


5.2.5 Aims of teaching business ethics

When discussing what the aims of teaching business ethics are, one may note that

perhaps it is not to teach the difference between right and wrong, but “… to make

people comfortable facing moral complexity” (Solomon, 1992).

It should also never be construed that a course in business ethics aims at ‘moral

conversion’ of students but rather that moral development can be enhanced through

the educational process (refer to the questionnaire in APPENDIX B, statement 61)

(Huss & Patterson, 1993: 2). Rest (1979) stated that “... older, educationally advanced

students have higher moral judgement scores” (Huss & Patterson, 1993: 2).

In her 1992 Inaugural Address, Professor Brenda Gourley, Principal and Vice-Chancellor

of the University of Natal and a former Professor of Accounting said: “There can be no

more relevant item on the curriculum of our students than the ethics of their particular

professions and career choices at this time in the history of our country and our world”

(Prozesky, 2001: 6).

Similarly, Bok (1988 in Kidder, 1994: 100, 102) discussed the critical importance of

ethical conduct for the long-term health of businesses in a free-market society. This

former President of Harvard University said in a transcribed interview with Dr

Rushworth Kidder that society needs “... a strengthening of individual virtues, ethical

virtues, civic virtues on the part of individuals – especially the kind of influential

individuals who flow through our colleges and universities.” This means that “…

universities should be taking an active role in moral education” (Kidder, 1994: 100,

102).

According to Bunke (1988) and Hosmer (1988), the reasons for teaching ethics in

business schools are related to community standards, which confer social legitimacy

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over the long term. Higher education could serve both as a capable disseminator of

ethical principles and as a developer of ethical reasoning (IFAC, 1998: 26).

Pincoffs (1986: 169) believes that the primary objective of moral education is to

encourage the development of the right sort of person. This entails paying attention to

interrelated aspects of moral judgement. Huss and Patterson (1993: 236) feel that:

“Ethics education in accounting is based on the premise that moral development can be

enhanced through the educational process.”

Often regarded with a degree of cynicism, accounting is sometimes perceived merely as

a particular way of controlling processes in businesses, even of allowing for and

facilitating exploitative relationships (Lovell, 1995). In addition, accounting is claimed

to have led to the emergence of the ‘economic man’ (Bhimani, 1994). The practice of

accounting has itself done little to create a more favourable view of the discipline either

– portraying it as a discipline in which not only do ethical considerations not play a role,

but in which they may even be alien. People generally, however, seem to interpret

their world in ethical terms, be it informed or uninformed by ethical theory (Dolfsma,

2006: 209).

Solberg et al., (1995: 2) do not take exception to the enlightened self-interest argument

for teaching business ethics and concede that community standards are available for

guidance as to the content of such instruction. They are of the opinion, however, that

“… there exists a small but crucial body of literature which questions the use of so-

called community standards of conduct for ethical education. Effective education in

business ethics may not be possible if such education relies on community standards as

defined by others.”

A typical nineteen-year-old will frequently reject the community standards of conduct

(reasoning based on convention) but he/she does not possess sufficiently developed

moral reasoning skills to understand principle-based reasoning, a finding supported in

part by Weber and Green (1991, quoted by Solberg et al., 1995: 2).

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5.2.6 An integrated approach?

Several options seem to compete for the preferred method to incorporate ethics into

education programs (Felton & Sims, 2005). One choice is to provide students with one

core course that focuses solely on ethics. Another possibility is to integrate ethics

content throughout multiple courses (Ritter, 2006: 155).

A review of the theoretical literature on this issue leads to a different conclusion.

According to theorists, the ideal situation occurs when students learn basic philosophical

theories underlying ethical decision-making in a required ethics class (e.g. normative

ethical theories, deontological theories, etc.) and ethics is further integrated throughout

additional business classes to apply the concepts to specific contexts that the students

may face in their careers (McDonald, 2004; Felton & Sims, 2005). An advantage of this

method is that by directly applying ethics to situations very similar to those which

individuals may face in a work setting, transfer of the material from school to work is

increased (Noe, 1999; Oddo, 1997).

The approach of teaching ethics in isolation, however, appears to have limited effect on

the moral development of accounting students. IFAC even stated that “values

education suffers most when it is separated from reality and taught as a dry, self-

contained topic. A well-planned programme, especially integrated with work

experience, can handle the topic very effectively” (IFAC, 1998: 18).

Carroll (1996: 40) stated that an integrated approach to the teaching of business ethics

is sought, as “... accounting ... is such a highly complex discipline ... with unique

quandaries ...”

In studies conducted by St. Pierre, Nelson and Gabbin (1990) as well as by Shaub

(1991) it was found that, while ethical awareness and reasoning skills tend to improve

after ethics has been taken as a separate course, the effects appear to be short-term in

nature (Kenny & Eining, 1996: 161) (refer to the questionnaire in APPENDIX B,

statement 55).

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Loeb (1988, 1990b) gave ideas on how to resolve the contentious issue of teaching

ethics to accounting students (see section 5.3). He also investigated whether ethics

should be taught as a separate course or integrated with the rest of the curriculum.

Josephs (1978, quoted by Michel, 1999: 27) argues that emphasising the

interdisciplinary acquisition of knowledge will better prepare students for practice.

Therefore, programmes must strive to achieve the outcome of a professional who is

able to recognise and address a wide range of business issues in a changing context.

Some accounting research suggests "... that ethics training might affect the process by

which accounting students and accountants resolve ethical dilemmas" (Hiltebeitel &

Jones, 1991: 272). As these dilemmas may occur in any of the various fields of

practice, many academics see the teaching of business ethics as an integrated approach

rather than a subject on its own in a vacuum (e.g. Kenny & Eining, 1996; Nelson &

Wittmer, 2001; Sims, 2002b; Sims & Brinkmann, 2003) (refer to the questionnaire in


5.3 PERSPECTIVES ON THE TEACHING OF BUSINESS ETHICS

The goals of ethics education are based on wider moral issues. Ethics education

increases the “... moral depth, cognitive development, analytical and ethical reasoning

development of students ...” (Sisaye, 1997: 234).

Shenkir (1990, quoted by Huss & Patterson, 1993: 3) emphasised, “ethics education

should recognise that different students will be operating at different stages of moral

maturity”. Individuals will therefore advance through the stages of moral reasoning at

various rates, although the stages occur in an invariant sequence and are universal to

all. In addition, individuals may reach moral maturity at any level.

Six stages of moral maturity or development were defined by Lawrence Kohlberg and

discussed in section 4.2.3.1. These will not just impact an individual's “sense of moral

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obligation” and ability to “deal with ethical conflict” (e.g. Loeb, 1988; Baker, 1996;

Lampe, 1996) but also represent ‘structured wholes’ (Kohlberg, 1981: 120; Rossouw &

Van Vuuren, 2004: 43) – 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 (Hiltebeitel & Jones, 1991). Since the moral

development of university students is never complete (Langenderfer & Rockness,

1989), the identification and support of basic values should enhance the moral

development of accounting professionals. A positive relationship furthermore exists

between the integration of ethics modules in accounting courses and students’ moral

development (Mintz, 1995: 249; Sisaye, 1997: 237).

5.3.1 International perspective

In 1980, Callahan identified five goals or objectives for the teaching of business ethics

at an undergraduate level. These are:

stimulate the moral imagination;

recognise ethical issues;

elicit a sense of moral obligation;

develop analytical skills; and

tolerate and reduce disagreement and ambiguity (Hiltebeitel & Jones, 1992: 39).

Loeb (1988: 319-322) modified the goals proposed by Callahan and presented these as

seven goals or outcomes. Loeb’s possible goals include the ability to recognise ethical

conflicts, and ‘set the stage’ for a change in ethical behaviour. These goals have the

ability to:

relate accounting education to moral issues;

recognise issues in accounting that have ethical implications;

develop a sense of moral obligation or responsibility;

develop the abilities to deal with ethical conflicts;

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learn to deal with the uncertainties of the accounting profession;

‘set the stage’ for a change in ethical behaviour; and

appreciate and understand the history and composition of all aspects of

accounting ethics and their relationship to the general field of ethics (Hiltebeitel

& Jones, 1992: 39).

Bok proposed that providing students with an opportunity to discuss ethical situations

encountered by professionals (such as CAs) would enable them to identify ethical

predicaments more readily. After identifying the ethical dilemma, students must

determine how to react to and resolve the situation. This resolution will be based on

the individual's moral understanding (Huss & Patterson, 1993: 3).

Brinkmann and Sims (2001) also reviewed the goals for teaching business ethics and

proposed the following:

knowing thyself, your own moral values and thresholds;

learning to see moral issues, conflicts and responsibilities;

learning to identify specific moral aspects of a situation;

learning to share moral understanding;

learning how to handle moral issues and conflicts;

acquiring moral courage; and

acquiring a critical attitude to the curriculum and its disciplines.

The modern literature suggests three broadly defined aims for business ethics

programmes (Maclagan, 1994: 4). These are:

raising awareness and stimulating the moral imagination;

providing concepts, theories and analytical skills to engage in moral reasoning

and decision-making; and

creating organisations which encourage and support ethical conduct at the

personal and organisational level.

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The clearest goals for teaching business ethics, however, are found in the Hastings

Centre study “Ethics Teaching in Higher Education” (Stiles, Jameson & Lord, 1993:

246). According to this study, there are five aims of an ethics course. These are:

stimulating the students’ moral imagination;

identifying ethical issues;

bringing out a sense of moral obligation in accordance with their own value set;

developing analytical competence; and

tolerating disagreement (Stiles et al., 1993: 246).

Following research done by Maclagan (1991), Stiles et al. (1993: 246) added that it is

imperative that competence in moral reasoning and actions should be linked directly to

managerial competence in general.

Michel (1999: 27) also feels that the whole faculty “... are ethics educators when it

comes to the motivational component of professional life.” He furthermore continues:

“The final task is to call on all faculty members to pay attention to their role as teachers of

professional motivation and to examine the process collectively in order to explicitly identify

what its goals ought to be, and to determine not just how faculty members ought to act in

order to achieve these goals but also how they can help one another through mutual

observation, correction, and support.”

5.3.2 South African perspective

Business ethics, as an academic field, has also been researched in detail within the

South African context. Rossouw (1997: 1540-1542) points out that although there is

broad consensus amongst academics and business leaders, there are issues that should

be regarded as priorities within the field of business ethics.

The issues he highlights as important are:

cultivation of a moral business culture;

affirmative action;

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work ethic;

information security;

business and society; and

other.

In 2001, SAICA commissioned a report on ethics in the education of South African CAs

(Prozesky, 2001) followed by the preparation of a draft curriculum on business ethics

applicable to CAs (SAICA, 2004g). This has been finalised (SAICA, 2005e) and has

been incorporated in the undergraduate education of CAs throughout South Africa.

The design of the curriculum is such that it provides not just a foundation of general

and specific ethical knowledge, but also a background to the study of the professional

code of conduct of SAICA which is taken by accounting students in the latter years of

their undergraduate years of tertiary studies, besides leading on to the ethics education

interventions during the training period and in professional life (SAICA, 2005e: 1).

The curriculum emphasises applied rather than theoretical ethics, containing just as

much theory as is necessary for an understanding of moral principles. A particularly

novel feature of the curriculum is that it is tailored to the realities of a culturally diverse

national and global context. It does this by including a short introduction to

comparative ethics, intended to equip students for meaningful relationships with people

from cultural backgrounds that differ from their own (SAICA, 2005e: 1).

Within each of these proposed ‘set of goals’, one has to take cognisance of its relevance

for the student. Earlier, the perceived lack of relevance of a course was cited as a

possible negative influence impacting on the teaching of business ethics. A possible

‘test of relevancy’ may be to:

create and foster an awareness of the ethical components within business as a

whole;

legitimise the consideration of ethical components as an integral part of the

decision-making process within business;

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provide a conceptual framework for analysing the ethical components of the

decision-making process within business; and

assist students in the application of ethical analysis within business (Sims,

2002b: 397).

SAICA’s code of professional conduct (2002b: 9, 27; 2006d) also sets forth ethical

standards in the form of behavioural objectives and enforceable behavioural norms.

Competence, integrity, and objectivity are the subject of both the objectives and the

norms (refer to the questionnaire in APPENDIX B, statement 73).

According to Ozar (1993, quoted by Michel, 1999: 23-24), the central values of the

profession, the competence of its members, the ideal relationship among co-

professionals, and the relationship between the profession and the larger community,

comprise the essence of ethics which is brought to the fore in the SAICA curriculum.

Accordingly, the goals of professional ethics education should be to:

enhance the modelling-imitating-habituating process;

heighten students’ awareness of ethical issues in professional practice (refer to

the questionnaire in APPENDIX B, statement 55);

strengthen students’ moral reasoning skills (particularly in judging whether

professional norms are sufficient) (refer to the questionnaire in APPENDIX B,

statement 57);

build a basic understanding of the nature of a profession and the content of the

norms of the specific profession (refer to the questionnaire in APPENDIX B,

statements 55 & 58);

enhance students’ abilities to implement ethical judgements and address

barriers to such implementation (refer to the questionnaire in APPENDIX B,

statement 59); and

make students more articulate in discussing ethical dimensions of professional

practice (refer to the questionnaire in APPENDIX B, statement 60).

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5.4 VARIOUS APPROACHES TO THE TEACHING AND LEARNING OF BUSINESS ETHICS

5.4.1 Introduction

Before investigating the various approaches applicable to teaching and learning

business ethics, one needs to understand the concepts of teaching and learning within

the business ethics milieu, without becoming too philosophical.

5.4.1.1 Defining teaching

Krüger and Müller (1990: 2) see teaching “… as a practical activity demanding reflection

and insight”. The ‘practical activities’ mentioned might include activities like explaining,

demonstrating and motivating. By teaching, opportunities for learning are created

(Krüger & Müller, 1990: 26).

5.4.1.2 Defining learning

There are a variety of ‘definitions’ of learning. Perkins (1974: 453) sees learning as a

universal, lifelong activity during which “… individuals modify their behaviour to adapt

to their environment”.

For the purposes of this study, one should take cognisance of Guilford’s explanation of

learning where “… learning implies a change in behaviour” (1967: 268). Nelson and

Wittmer (2001: 269) go further and see learning as a process that “... fosters

development”. This also entails the presence of effectiveness within the learning

process (Sims, 2002b: 394).

5.4.1.3 Linking teaching and learning

When teaching business ethics, one should ask the question “what do you want to

achieve by teaching business ethics?” Rossouw (2004: 36) points out that a survey of

the literature on the teaching of business ethics reveals that three basic positions can

be distinguished with regard to the purpose of teaching business ethics. These are:

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the cognitive competence position, i.e. acquiring intellectual knowledge and skills

to make proper judgements about the ethical dimension of economic activity;

the behavioural competence position, i.e. developing the capacity of students to

behave morally in a business setting; and

the managerial competence position, i.e. enabling managers or policy-makers to

extend their managerial competence to the ethical dimension of economic

activity.

The element of change appears to be present in all of the above positions – most

particularly a desire to change an individual’s behaviour on a moral and values level.

This may be attributed to what was described in section 5.4.1.1: that teaching demands

reflection and insight.

5.4.2 The conventional or institutional approach

Walk into the majority of classrooms in higher educational institutions the world over,

and one will find the typical teacher-centred approach – a lecturer or teacher standing

in front of a group of students and ‘teaching’ with ‘learning’ noticeably absent (Sisaye,

1997: 240).

With the conventional approach to teaching business ethics, the ‘teacher’ emphasises

facts and skills, knowledge, measurable principles. Teachers ask the questions, they

teach the students, they think and they take responsibility (Nelson & Wittmer, 2001:

268). O’Banion (1997, quoted by Nelson & Wittmer, 2001: 268) noted: “If the

dominant role for teachers has been that of a conveyor of information, the conveyor

belt has been the lecture.”

Applying this conventional approach to the teaching of business ethics is perhaps more

utilised at present for a variety of reasons, namely:

the perceived need for a scientific answer to everything;

the desire for a ‘pill to cure all ills’;

the need for instant gratification;

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the need to protect oneself and the organisation from legal problems;

the desire for a to-do list; and

a preference for the measurable versus the significant (Heames & Service, 2003:

118; Nelson & Wittmer, 2001: 268/269).

The excessive use of this method, however, does not mean it is the best. A study by

McNair and Milan (1993, quoted by Sisaye, 1997: 240) points out that the lecture

approach is the least effective method of (business) ethics instruction. The reasons

they list include inter alia less class interaction; passive involvement in the learning

process; and regurgitation of facts in assessments.

Jackson and McKergow (2002, quoted by Heames & Service, 2003: 118) are of the

opinion that “teaching excellence requires concentrating on solutions, not problems.”

By focusing on solutions, amendments can be made to the conventional approach. This

means a move from a teacher-centred responsibility and thinking to student-centred

learning; from rote memory to application; from answering questions to developing

questions; and from taking responsibility to giving responsibility (Winn, 1996; Heames

& Service, 2003: 118/119).

5.4.3 Community learning approach

The movement to a student-centred approach can be summarised by referring to it as a

community learning approach (Nelson & Wittmer, 2001: 269). Within this approach,

the teacher is no longer the ‘expert’ but is rather a ‘learning manager’ playing various

roles such as coordinator, facilitator, evaluator, mentor and coach (Nelson & Wittmer,

2001: 272/273).

Within this approach, the sharing of experiences by students (i.e. participative learning)

can be very helpful in the learning process (Stevens, 1999: 116, 119; Birck, 2002: 535;

Sims, 2002a: 192). Berry and Chisholm (1999, quoted by Procario-Foley & Bean, 2002:

108) feel that “students [are] taught to believe that schooling is the only source of

learning ... [students] are unable to learn from the first and primary ‘teacher’ –

experience.”

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The community learning approach is very closely linked with the experiential learning

approach (Sims, 2002b: 399) by the use of case studies in teaching and learning,

something that will be discussed in detail in the next section of this chapter. Very

important within this approach is the emphasis placed on the development of a shared

responsibility for learning and growth amongst the student community as a whole

(Nelson & Wittmer, 2001: 273) – a process of self-directed learning that was focused on

in Chapter 3 of this study.

Collaborative learning can also be accomplished by using Computer Mediated

Communication (Spence & Wadsworth, 2002: 336), which will be discussed later in this

section. This approach, however, also has its drawbacks. In an empirical study

completed by Nelson and Wittmer in an ‘MBA Values in Action course’ at the University

of Denver (2001: 270), it was found that assessing students within this process has

been daunting. After reflecting and re-evaluating their process they noted that:

keeping up with the evaluation of the various ‘practical assignments’ students

had to complete during lectures was very difficult. Students also felt that the

assessment process should be more objective in nature;

more formal assessment opportunities needed to be created – e.g. examinations.

Initially in their study, Nelson and Wittmer felt that eliminating formal

assessment opportunities would give the students a better idea of ‘shared

responsibility’. However, this was not such a good idea in the short term (2001:

279).

5.4.4 The conversational approach

Developing the climate or environment for learning in the teaching of business ethics

requires careful attention by the business ethics teacher. Business ethics teachers are

responsible for managing the content, process, and learning environment of all the

efforts if they intend to teach business ethics successfully (Sims, 2004: 201).

Of particular importance to successful business ethics teaching is the recognition that

speaking about values, beliefs, morals, virtue, integrity and other ethically related issues

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often generates powerful emotional responses in students, ranging from self-doubt and

shame to frustration and confusion (Sims, 2002a: 186).

In recent years, experience has shown that the successful teaching of business ethics

depends on the ease, frequency, and quality of conversations among students and the

lecturer/teacher. These conversations are more likely to occur in a classroom-learning

environment based on trust, risk, and student sharing (Sims, 2004: 203). Sims (2004:

202) even went further to state that: “Business ethics education without dialogue is

programmed for failure.”

A conversational learning approach is especially advantageous for business ethics

teaching efforts when it involves:

recognition of student differences as essential for the continuous learning

required;

the creation of a safe learning environment built on trust and risk-taking; and

collaborative learning among students with differing ethical backgrounds,

experiences, worldviews, skills, areas of expertise, vocabularies, and so on.

Much of the spirit of conversational learning is reflected in the thoughts of Howard Stein

(1994: 111): “To listen is to unearth rather than to bury. It is to feel rather than to be

compelled to act. It gives us all greater liberty and responsibility in our actions … the

heart of listening deeply ... its attentiveness to others’ voices ... It is a willingness to be

moved, changed”.

To support the kind of listening that Stein is describing, the creation of receptive spaces

for conversations is essential in business ethics teaching. When these safe, receptive

spaces in the classroom are created and held sacred, students are more likely to trust

and can learn to listen deeply to their own inner voice and to the voices of others – to

listen in the spirit of learning, of being surprised, of being willing to slow down and

reflect upon new possibilities, and of letting go of control (Sims, 2004: 204).

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Conversational learning in teaching business ethics requires many substantial shifts in

thinking for most students, including (Sims, 2004: 204):

listening to others with the intention of learning with them;

reflecting intentionally to gain more understanding of the complexities of

organisational life;

moving away from the assumption there is one way of thinking (either/or),

toward the assumption that there are multiple legitimate and viable perspectives

and possibilities in any situation;

moving away from the assumption that there is a right answer or a right

approach in each ethical situation, toward placing more value on trying to learn

from the multiple perspectives of as many other people as is reasonably

possible; and

avoiding reactive behaviour by becoming highly proactive in anticipating

potential ethical or moral dilemmas and finding different ways to learn from

different perspectives about how one might address such dilemmas.

5.4.5 The games approach

Coverage of ethics can often be dry, and textbook activities can fail to grab the

students’ attention. Furthermore, classroom coverage usually does not emphasise the

responsibilities professionals have in ethical dilemmas. Such an emphasis is vital

because the public perceives the recent corporate scandals as the fault of professional

accountants (Haywood, McMullen & Wygal, 2004: 86).

Educational research indicates that students learn and retain more of what they learn

when they actively participate in problems rather than just listen to lectures (Pascarella

& Terenzini, 1991 quoted by Haywood et al., 2004: 90).

Research provides numerous ideas of how to get students actively involved in learning.

These include the keeping of a journal (e.g. Wygal and Stout, 1989; Sims, 2002a;

2002b) and role-playing (e.g. Cunningham, 1996; Sims, 2002b). The value of playing

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games has also been highlighted by Cermignano, Hargadon and McMullen (1998,

quoted by Haywood et al., 2004: 90).

A related advantage of games is the potential to stimulate the student’s interest in the

subject matter and in classroom dialogue. Given that students are much more likely to

be familiar with playing and observing games than they are with the realities of the

workplace, the game mechanism can be a useful medium to stimulate interest

(Haywood et al., 2004: 90).

In an impact study done by Haywood et al. (2004: 93) at Rider University, students in

the Managerial Accounting and Auditing lectures were asked to respond anonymously

to a short survey that questioned their reactions to the game, if and how it improved

their understanding of ethical and professional responsibilities, and their views on its

effectiveness as compared to other approaches in covering ethics.

Their responses were overwhelmingly positive. While a couple of students noted that

they did not enjoy playing games in general, most used such descriptors as ‘fun’,

‘enjoyable’, ‘unique’, ‘interesting’, ‘entertaining’, and ‘informative’ to record their general

reaction to the game. Student feedback also suggests that the game served to engage

their interest in learning about ethical responsibilities.

Role-playing, as a form of games, also provides students with the opportunity to

participate with a high level of personal involvement (Cage, 1997: 1). Students could,

for example, be asked to develop a code of ethics for an organisation (Sims, 2002b:

399). Students noted that the stimulating nature of the game and the overall

competitive environment contributed to their desire to think critically about ethics

(Haywood et al., 2004: 93).

5.4.6 The computer learning approach

The continuing globalisation and cultural diversity trends within the workplace, present

challenges for the modern professional accountant as well as opportunities for

educators to address. For the delivery of business (ethics) education, the message is

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clear: professionals of the future need to understand these trends in order to cope

effectively with the pressures of the global market.

As David Harrison (2000) has highlighted, three key trends promise to change and

shape the professional landscape well into the next century:

continued globalisation of business;

enhanced information technology; and

increasingly diverse workplaces (Harrison, quoted by Walker & Jeurissen, 2003:

114)

Embracing information technology in the classroom may provide a way to realise this

goal (Walker & Jeurissen, 2003: 114/115) – an integrated learning approach bringing

together business ethics and computer technology. The virtual learning space

(commonly referred to as e-learning) may well then present a medium for sharing ideas

and exchanging knowledge.

Linking business ethics with e-learning may seem like a contradiction in terms. This is

because teaching ethics tends to be associated with more discursive, face-to-face

methods of learning (Ottewill & Wall, 2002: 320). The literature provides many

examples to illustrate the interpersonal dimension of ethics teaching as being very

important (e.g. Sanyal, 2000; Latif, 2001; Jones & Ottaway, 2001; Nelson & Wittmer,

2001).

By contrast, there are fewer articles which refer to the use of electronic learning in

teaching business ethics. One may argue, however, that in the initial stages of

developing an ethical awareness amongst students there is much to be gained from an

interactive electronic facility. Such a facility can assist in familiarising the student with

the language and concepts of ethical discourse and also by demonstrating the

ambiguity of ethical issues and dilemmas (Ottewill & Wall, 2002: 320).

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Sophisticated e-learning applications also offer greater scope for designing interactive

and supportive learning environments (Ottewill & Wall, 2002: 321; Galea, 2001: 487).

5.4.6.1 E-learning: closed approach

In many cases where e-learning has been introduced, it represents a departure from

the traditional applications of technology. Walker and Jeurissen (2003: 115) even went

so far as to defend their choice of learning approach by adding: “E-learning should be

distinguished from conventional uses of the ‘web’ in universities, which conform more

to an ‘e-teaching philosophy’.”

Here the focus of technology is aimed at knowledge dissemination rather than

knowledge creation. This can involve the placing of teaching materials on the web as

well as some ancillary (collaborative) web-based activities (Böhne, Faltin & Wagner,

2002: 9). This environment, known as a ‘closed’ system, allows learners to input

information; however, the responses to that input are prescribed and predetermined. A

computer-aided instruction environment would suit this type of approach.

Instructional interventions using this type of tool would typically aim at controlling the

sequence and content of instruction, and seek to map a particular model of thinking for

offering feedback and prompting to learners (Walker & Jeurissen, 2003: 115).

The closed approach can also be applied by using dedicated electronic bulletin boards

which may complement the traditional lecture or seminar (Spence & Wadsworth, 2002:

335).

5.4.6.2 E-learning: open approach

A more effective applicable approach that can be used in the teaching of business

ethics is a vision of e-learning based on the application of technology in such a way that

learners are presented with an ‘open’ environment, matching the needs of individual

learners and complementing individual learning pathways (Walker & Jeurissen, 2003:

116).

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An open system fosters personal meaning, allowing individuals to construct their own

knowledge through exploration and discovery learning. It provides high levels of

learner control, allowing users to restructure the learning experience in ways not

feasible within closed environments. An open environment will also support discourse

among communities of learners, supporting the social negotiation of meaning (Walker &

Jeurissen, 2003: 116).

5.4.7 The experiential learning approach

Recent work on the provision of (or at least the possibility of) comprehensive

management development programmes in ethics has indicated that learning from

experience is vital (e.g. Maclagan & Snell, 1992; Maclagan, 1994: 4). Laditka and

Houck (2006: 157) suggest that experiential learning can help students understand

ethical situations they are likely to encounter in the workplace.

Much of the work in this field has drawn on the ideas of the philosophical psychologist

Lawrence Kohlberg concerning individuals' moral development, where he refined the

work postulated by Piaget (Maclagan, 1994: 3; Baker, 1996: 76). Kohlberg stressed

that emotional experiences are a near-necessity for moral development to take place;

not only do they provoke awareness of ethical situations, but they often force people to

rethink their position on the moral issues arising. Such experiences arise in the reality

of working life rather than in the classroom (Maclagan, 1994: 4).

Furthermore, people must have the personal capacity to act. They must have the

courage, assertiveness, communicative skills, and so on, to enable them to stand up for

what they believe in, to argue their case – perhaps even, in extreme instances, to

resign from an organisation (Maclagan, 1994: 5).

In the previous two paragraphs it was indicated that Kohlberg stressed the importance

of moral development and judgement. Moral judgement is action-oriented and

students in business ethics should participate in experiential (learning) activities that

require them to ask themselves what the right thing is to do (Sims, 2002b: 399). An

experiential learning exercise is a complex event in teaching business ethics. It is

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important during experiential learning that the student must have the capability to use

this new knowledge gained not just in the classroom but also in real business settings

(Sims, 2001a: 179).

Experiential activities that expect students to respond to moral questions that are

personal in nature and involve interpersonal relations require normative responses to

determine the appropriate course of action (Sims & Sims, 1991; Radtke, 2004).

In this age of moral relativism (Cragg, 1997: 239), business school curricula should

provide students with continuous experience in examining the underlying moral issues.

What are managers’ or employees’ responsibilities or obligations to an organisation,

work group, themselves, their families, and society? And what will the possible

consequences be of a particular action if they make an immoral decision and knowingly

harm others (Sims, 2002b: 399)?

The use and value of experiential methods, or activities, as a teaching medium are well

recognised and have been widely reported. Within the CA fraternity the call for more

learner-centred approaches to teaching has unfortunately ‘fallen on deaf ears’ and

surveys have revealed a disappointing lack of learner-centred approaches (Adler &

Milne, 1998: 12).

In Chapter 4 of this study, reasons for tertiary educational institutions generally shying

away from these approaches were given. On the other hand, studies by Hemmasi and

Graf (1992, quoted by Sims, 2002b: 399), for example, show that experiential exercises

(activities) have positive attributes. These include:

students retain material longer over time;

students are actively involved in the learning process;

actual work environments are simulated;

students enjoy the activities; and

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activities serve as an effective training and teaching tool to prepare students to

understand and cope with ethical minefields that they are likely to encounter

(Sims, 2002b: 399).

The experiential approach has evolved further in other approaches to teaching business

ethics, however.

5.4.7.1 Simulation approach

The goal of combining theory and practice has always been a challenge in the

classroom; supplementing theory with hands-on practical examples makes the theory so

much more applicable. Simulation is an experiential tool that may be very helpful in

bridging this divide (Galea, 2001: 473).

Simulations “model some aspects of reality in a safe and time-compressed setting” and

“... create a world ... while lessening the inherent risks” (Galea, 2001: 476).

Simulations have also been called “a powerful learning tool” (Galea, 2001: 476).

In simulations designed for teaching business ethics, students can be faced with ethical

dilemmas that encourage them to react to and act on the problems as though they

were in a real-life situation (Sims, 2002b: 399).

5.4.7.2 Case studies

According to the Accounting Education Change Commission (Mintz, 1995: 255), one of

the objectives of education for accountants is to develop the skills that are necessary

for success in the accounting profession. One such group of skills is the intellectual

skills (IFAC, 2003a: 46, 54). These include "the ability to identify and solve

unstructured problems in unfamiliar settings and to exercise judgement based on

comprehension of an unfocused set of facts." One way of enhancing these skills is to

use case studies as a teaching method (IFAC, 2003a: 50).

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Business cases and field-based applications can provide another pedagogical vehicle to

actively engage students in analysing ethical problems and identifying creative solutions

(e.g. Sims, 2002b; Nelson & Wittmer, 2001; Milne & McConnell, 2001).

Case studies are used in accounting ethics instruction, but not as widely as one would

expect (Sisaye, 1997: 241). They provide students with “an external referent” (Castro,

1989: 481) to apply in business situations, both actual and/or hypothetical (Sisaye,

1997: 241; Sims & Sims, 1991: 213). Case studies also increase a student’s awareness

and sensitivity to ethical issues and dilemmas (Sisaye, 1997: 241). Sensitivity as a

virtue of a CA was also highlighted in the previous chapter of this study.

On the whole, students tend to accept the use of cases in teaching business ethics very

favourably (Nelson & Wittmer, 2001: 278).

5.4.7.3 Journals

Another useful pedagogical approach is to schedule discussions that are focused on

current events that have ethical ramifications. Reports and individual journals can be

prepared from current periodicals based on recent headline-making fraud and

embezzlement cases, and the class discussion can focus on how these problems could

have been avoided (Sims, 2002b: 399; Nelson & Wittmer, 2001: 274).

Sims (2001: 385) takes the issue of journals even further by advocating the use of a

learning log (‘diary’). By maintaining a learning log over a period of time, students can

record their experiences and reflections, thereby ‘self-tracking’ personal growth and

cognitive development. “Journal writing significantly extends the learning process in

the experiential learning exercise. The writing not only substantiates learning, but it

enhances analytical thinking” (Sims, 2002a: 194).

Business ethics teaching that extends beyond the rote mastery of fact should strive to

be an intensive, interactive experience in which students are asked to identify with a

problem and take a stand. These experiences offer tremendous potential for student

development and growth.

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However, there is also the potential for confusion, misunderstanding, and alienation.

To manage the potential for adverse consequences, it is critical that experiential

approaches are carefully designed and safely and thoughtfully executed so as to include

the creation of an environment conducive to sharing experiences that are carefully

debriefed (Sims, 2002b: 400; 2004: 201).

5.4.7.4 Debriefing – a crucial aspect in experiential learning activities

As was indicated previously, experiential learning activities can be a powerful form of

teaching in which participants acquire new knowledge, skills and abilities by

internalising theory through guided practice (Sims, 2002a: 179). Of crucial importance

in experiential learning is the often neglected processing stage known as ‘debriefing’

(Sims, 2002a: 196).

An experiential learning activity is a complex event in ethics education. It needs to

provide students with the basis for understanding why and how the new knowledge

they acquire is related to what they already know. It must convey to the students that

they have the capability of using this new knowledge not only in the classrooms in

which they learn it but in other settings as well (Sims, 2002a: 179).

In designing a business ethics curriculum, designers spend a vast amount of time on

the design and implementation of experiential learning activities (i.e., role plays,

simulations, games, etc.). Unfortunately, that is not true about the planning and

implementation of the debriefing sessions accompanying experiential learning activities,

which are just as, if not more, important (Sims, 2002a: 179).

While a number of authors write about the debriefing process, not all use the term

‘debriefing’ in the same sense.

Debriefing is defined as “the post-experience analysis designed to provide insight into

the cases, journalising, role-plays or other experiential learning approaches used in

teaching business ethics” (Sims, 2002a: 181).

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Pearson and Smith (1986: 156) offer the following insight into the relationship between

the experience of learning and the debriefing phase: "Active experience [by students] is

involving and interesting, even exciting. Debriefing means the termination of this

experience and the deliberate decision to reflect on action".

In his model of experiential learning, Thatcher (1986), drawing on the earlier work of

Kolb (1984), emphasises that reflective observation (debriefing) is the crucial link

between experience and the process of change that makes the elements of the

experience a part of the conceptual foundation of the learner.

Thatcher (1986: 151) notes: “Debriefing is the part of the process in which the

reflection takes place and from which the change in the person will occur, because it is

the part of the activity which focuses on the complex processes which took place in

each individual and in the group as a whole.” Nelson & Wittmer (2001: 275-278) also

use debriefing but refer to it as ‘case discussion’.

Debriefing has always been a key component of successful experiential learning

exercises. The link between objectives or outcomes, course materials and the

experiential learning activity seems rarely, if ever, crystal clear to the participants.

5.5 SOME CRITICISM FROM A SOUTH AFRICAN PERSPECTIVE

5.5.1 Introduction

Even though the integrated approach to the teaching of ethics has been high on the

academic agendas of many universities across the world, it certainly has not guaranteed

an automatic change. The role of universities in the teaching of business ethics has

been criticised. An educator from India, Mithra Augustine, noted the following at an

international conference of service-learning (Procario-Foley & Bean, 2002: 105):

“The role and function of the universities and colleges were earlier seen as integral to the

processes of social engineering, developing students’ critical faculties ... Amidst current

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trends of modernisation and globalisation the culture of self-interest is growing dominant in

centres of higher education.”

Berry and Chisholm (1999, quoted by Procario-Foley & Bean, 2002: 107/108) went

further and criticised the specialisation, fragmentation and isolation of knowledge

through division into disciplines and departments. Their worry is also born from the

fact that “... too little dialogue [occurs] between faculty and the community in which it

operates.”

Adding an ethics component to a core course does not necessarily mean systematic

integration. Far from integrating, this option trivialises the subject thus ignoring that,

with few exemptions, business ends and means have ethical implications and,

consequently, are subject to ethical evaluation (Acevedo, 2001: 167) (refer to the


Grasso and Kaplan (1998: 80) conducted a study that dealt with ethics and taxation,

and concluded by providing three reasons for the failure of ethics to be properly

integrated in the teaching of taxation. These were:

the large amount of technical detail that must be covered within the [prescribed]

curriculum;

the lack of ethics training for the educators; and

the effectiveness of ethics coverage within the curriculum.

For the purposes of this study, the author used these together with reasons taken from

the works of various authors (e.g. Loeb & Rockness, 1992; Kenny & Eining, 1996;

Lampe, 1996; Cragg, 1997; Baetz & Carson, 1999; McAdams & Duclos, 1999; Buerck,

2002; and Sims, 2002b) and postulated his own reasons for the failure of business

ethics to be properly integrated into a curriculum applicable to CA students in South

Africa. These will be discussed below.

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5.5.2 Amount of technical detail

As there is an ethical aspect to all areas of business, ethics should permeate the

content of business courses throughout the syllabus. However, there is a case to be

made for the inclusion of the large volume of technical detail that must be covered

within the curriculum of the undergraduate CA. Past neglect of ethics may well have

been a function of business schools’ traditional approach to the teaching of technical

skills while “ethical values seem to be left to chance ...” (Agarwal & Malloy, 2002: 245).

At this stage, integrating business ethics into the syllabus relegates it to the lower

status of an added extra: something that is covered simply by being acknowledged as

an issue, no matter how superficial the treatment may be in practice. Business ethics

should however not be viewed as an ‘add on’ to an already-crowded curriculum. It may

be further argued that in being taught as a component of a grouping of other subjects,

the treatment is almost certainly going to be superficial since the specialist teaching the

subject demands, will be absent because of the complexity that results from its

involvement with all aspects of business.

5.5.3 Effectiveness of coverage

The effectiveness of ethics coverage in the undergraduate curriculum for prospective

CAs may be affected due to the fact that, at certain higher education institutions, those

teaching business ethics frequently take a detached, non-committal moral stance in

discussing the quality of various moral perspectives (Cragg, 1997: 240). There is also

the issue of the lack of proper ethics training (either theoretical and/or didactical) for

the educators of business ethics (Baetz & Carson, 1999: 1).

At many South African institutions, prospective CAs are taught by qualified CAs. To say

therefore that because CAs teach business ethics this instruction will be good and the

‘non-committal moral stance’ will not be evident may not be correct.

The only time many of these educators were exposed to ‘business ethics’ per se would

have been at an undergraduate level when they were completing their undergraduate

degrees themselves. Their education did not involve an in-depth study of, for example,

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Western and Eastern theories and philosophies of ethics. Does this then qualify an

educator to be an ‘ethics specialist’?

At some universities it is felt that that the teaching of business ethics should be the

exclusive preserve of those qualified in philosophy. While accepting that the business

ethics educator should have an understanding of the theoretical underpinning of the

subject, the notion may also be that business ethics is just other component of a broad

understanding of ‘business activity’ for CAs in general.

As long as both components (i.e. theory and application in business) are there, it

matters little which route is taken, provided the grasp of both components is secure.

5.5.4 Theory versus application

Unquestionably, ethical theory is the area of business ethics that causes both students

and educators the most trouble: students because it is both difficult and new to them;

teachers because not only might it be a relatively new subject to them as well, but also

because they have to treat what is a huge subject in its own right as simply a

component part of business ethics.

The problem is how to compress theory and practice while still conveying enough of the

complexities of ethical theory to equip students to use it effectively. Moreover, it is a

problem that is made even more difficult by the prevalence in textbooks of a view of

ethical theory as a series of contending schools of thought – e.g. utilitarian, virtue-

based, feminist, etc.

To circumvent this, educators may find that they need to ‘simplify theory’. This

alternative, however, may lead to over-simplification, which is another matter of

concern.

5.5.5 Use of computer technology

In section 5.4.6 the use of computer technology in the teaching of business ethics was

highlighted. There has been some criticism of this method in a South African context,

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however. The first may be whether the computer learning approach may lead students

down a set path of learning that might not be appropriate for their needs. The use of

such technology needs to be specific in nature in that it should address a specific issue

or skill that needs to be taught.

Language in terms of computer terminology may also be a problem in the use of

computer technology in that certain students will not understand what is required and

cannot provide explanatory feedback. One has to remember that the subject itself is

new, presenting a new set of terminology that has to be grappled with. If learners are

furthermore required to be able to critically evaluate any statement or to complete

certain activities, this might lead to further problems as many students do not have the

necessary language skills. This has already been discussed in detail in Chapter 3.

In general, the use of computer-assisted or -aided technology in the teaching of

business ethics should also be viewed with caution: a major drawback is the cost

involved in setting up and maintaining the physical environment in which the student

must operate. This is not such a problem at the UJ, however.

5.5.6 Classroom realities

In Chapter 3 of this study the issue of SDL and PBL was highlighted. Earlier in section

5.4 the use of SDL by way of case studies was again brought to the fore where it was

stated that the use of case studies places an emphasis on the development of shared

responsibility between the educator and the learner for learning.

There is a downside to this philosophy, however. At many of the higher education

institutions in South Africa accredited to produce prospective CAs, educators are

snowballed by the sheer number of students they have to contend with. Speaking

about a ‘classroom full of students’ is an understatement as there may be between 300

and 600 students in a lecture hall at a time.

Therefore to look at a so-called ‘collaborative learning’ approach together with the use

of case studies or journals may have its drawbacks – e.g. the number of assignments

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that need to be assessed and the fact that a final assessment opportunity in the form of

an examination has to be completed at the end of a semester as an exit-level

assessment opportunity.

Business ethics educators in South Africa will have to find a solution to these drawbacks

as the use of case studies and (learning) journals is now part of the official SAICA

syllabus for business ethics. Creative ways of assessment also need to be sought as

the journals that learners will produce will contain their own experiences, and this

means that they cannot be assessed in an objective manner but rather subjectively

using Rubrics.

5.5.7 Other

Other reasons for the lack of proper integration may also be the unwillingness of either

the educator and/or the learner to discuss uncomfortable topics and potentially

offensive issues in class; and the increased emphasis on business ethics teaching may

also raise ethical dilemmas for the educator.

5.6 SUMMARY

How to teach business ethics has been an ongoing debate for many years. Over the

last few years, issues relating to the teaching of business ethics seem to have evolved

from questions of “Should ethics be taught to students?” to questions of “How should

ethics be taught to students?” and it has now been accepted that the teaching of

business ethics has become a core part of undergraduate curricula across the world.

While many argue that ethics or values cannot be taught, the current literature

suggests a contrary stance and states that teaching ethics can develop a student’s

moral reasoning skills, ethical sensitivity and behaviour. The teaching of business

ethics to prospective CAs at an undergraduate level is important because these students

are seeking to discover a set of ethical standards suitable for themselves. Universities

seem to be appropriate institutions in which to inculcate in students a sense of the

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importance of ethics. Indeed, they should go so far as to influence the ethical

reasoning of graduates.

Studies have found that the teaching of business ethics as an integrated approach

rather than a subject on its own in a vacuum does provide better results over the long

term. Even though the integrated approach to the teaching of ethics has been high on

the academic agendas of many universities across the world, it certainly did not

guarantee an automatic change.

The teaching of business ethics, whether on its own or integrated with the rest of the

curriculum, has also led to many criticisms, obstacles and negative concerns about the

subject. The role of universities in the teaching of business ethics in terms of the

amount of specialisation, fragmentation and isolation of knowledge through a division

into various disciplines and departments has been cited as a negative concern.

The goals of ethics education are based upon wider moral issues and should recognise

that different students will be operating at different stages of moral maturity.

Researchers have argued that educators have a responsibility to contribute to the moral

development of their students. Since the moral development of university students is

never complete, the identification and support of basic values should enhance the moral

development of accounting professionals.

The clearest goals for teaching business ethics are:

stimulating the students’ moral imagination;

identifying ethical issues;

bringing out a sense of moral obligation in accordance with their own value set;

developing analytical competence; and

tolerating disagreement.

With the conventional approach to teaching business ethics, the ‘teacher’ emphasises

facts and skills, knowledge, measurable principles. Teachers ask the questions, they

Ethics education

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teach the students, they think and they take responsibility. This method is not the best

as it contributes to less classroom/learner interaction, creates passive involvement in

the learning process, and means regurgitation of facts in assessments.

By moving to a student-based approach, the teacher is no longer the ‘expert’; he or she

is rather a ‘learning manager’ playing various roles such as coordinator, facilitator,

evaluator, mentor and coach. Very important within this approach is the emphasis

placed on the development of a shared responsibility for learning and growth amongst

the student community as a whole.

Coverage of ethics (and business ethics) can often be dry, textbook activities that fail to

grab the students’ attention, and classroom coverage usually does not emphasise the

responsibilities professionals have in dealing with ethical dilemmas. Educational

research indicates that students learn and retain more of what they learn when they

actively participate in problems rather than just listen to lectures. This includes the

keeping of a journal and role-playing.

Recent studies have shown that learning from experience is vital. Experiential activities

that expect students to respond to moral questions that are personal in nature and

involve interpersonal relations require normative responses to determine the

appropriate course of action. The experiential approach has however evolved further in

other approaches to teaching business ethics and includes the simulation approach,

case study approach, and the use of journal or journal-keeping.

As was indicated previously, experiential learning activities can be a powerful form of

teaching in which participants acquire new knowledge, skills and abilities by

internalising theory through guided practice. Of crucial importance in experiential

learning is the often neglected processing stage known as ‘debriefing’.

Some of the reasons for failing to properly integrate business ethics into a South African

curriculum applicable to the undergraduate CA student may well be the traditional

approach of focusing on technical detail (albeit a requirement of professional bodies),

the ineffective coverage of the business ethics in an undergraduate curriculum, the

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prevalence of conveying a concept draped in theory in an applicative manner and

various classroom realities in South Africa in the 21st century. This may include student

readiness, the use of technology and language barriers.

The problem of how to teach ethics is rich in controversy about nature, purpose and

method. The moral point of view for those who teach business ethics is to work

towards sculpting individuals who are morally autonomous, technically competent and

caring (professional) members of society. The pillar upon which this goal rests is that

of integrity: integrity in terms of curriculum content, the setting in which learning takes

place, and the development of the moral virtue of integrity itself.

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217

CHAPTER 6 Research methodology

6.1 INTRODUCTION

n order to determine how to utilise CPD of ethics amongst prospective CAs at an

undergraduate level, one has to be able to develop a ‘model’ or ‘method’ of

approaching this ‘learning process’. Moreover, this model needs to be implemented

during a student’s undergraduate learning experience.

Before one can actually commence with the development of this so-called ‘integrated

teaching and learning model’, one has to be certain that students grasp the issues of

CPD and ethics within a holistic process. Chapter 7 therefore provides an assessment

of whether CPD of ethics is understood and possible to communicate to prospective

CAs at an undergraduate level by focusing on the attitudes and perceptions of

undergraduate students toward the CPD of ethics. Chapter 6, however, first provides

the background to the research methodology to be used in the empirical analysis in

Chapter 7.

This chapter will initially provide the reader with some thoughts on research design,

incorporating issues such as qualitative and quantitative research. The quality of

measurement is also discussed looking at the issues of reliability and validity specific

to this study.

I

Research methodology

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Next, the chapter provides an overview of the design of a questionnaire as an

instrument to be used in an empirical analysis, which is then also investigated within

the ambit of this empirical study.

Discussions surrounding issues such as the questionnaire layout, the issue of

pre-testing, sampling approach, administration, data analysis, research ethics and

confidentiality are also provided.

6.2 RESEARCH DESIGN

Planning an empirical analysis for research purposes requires the researcher to

investigate various issues around the research design. For the purpose of this thesis,

a mixed research paradigm employing a combination of both quantitative and

qualitative research methodologies will be used.

6.2.1 Qualitative research

Grounded theory, as a phenomenological or qualitative research paradigm, will be

used in this thesis to describe the world of the prospective CA. In order to define it

one may state that grounded theory “... uses a systematic set of procedures to develop

an inductively derived theory about a phenomenon” (Collis & Hussey, 2003: 73). Data

will therefore be gathered and analysed in order to generate hypotheses.

6.2.2 Quantitative research

A quantitative, descriptive survey will be used to investigate opinions, attitudes and

perceptions of third year B Com Accounting students at RAU on the utilisation of CPD

of ethics amongst prospective CAs. Quantitative research or a positivistic paradigm

(Collis & Hussey, 2003: 47) is a formal, objective, systematic process to obtain

information and describe variables and their relationships (Burns & Grove, 1993: 26).

Quantitative research is also a conclusive research format involving large samples and

fairly structured data-collection procedures (Struwig & Stead, 2001: 4).

The design will be quantitative in nature in that the strategies the researcher used to


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collect and measure data were in a numerical format. Measuring or measurement is

simply the allocation of numbers to objects or events according to predetermined rules.

Huysamen (1998: 7) defines it as “... the assignment of numbers or numerals,

according to fixed rules, to persons or objects in order to reflect differences between

them in the attribute or characteristic of interest.”

The reason for the use of numbers, as is evident from Huysamen’s definition, is that

numbers can show distinction between different mutually exclusive categories;

numbers can indicate rank; and numbers can indicate equal intervals between

successive numbers (Uys, 2003: 118) – i.e. measurement can describe characteristics

of variables (Eiselen; Uys & Potgieter, 2005: 11).

The definition furthermore encapsulates the issue of “... differences in attributes ...”

This implies that the level of measurement for each variable may differ. Based on work

done by Stevens (1946), the literature describes basically four levels (or scales) of

measurement – namely, nominal, ordinal, interval and ratio measurement scales (Uys,

2003: 119).

6.2.2.1 Nominal scale

Within nominal measurement (sometimes called categorical scales), the issue of

mutual exclusiveness stands out. This means that when completing a questionnaire,

the respondent has to choose one aspect relating to his/her circumstances. Examples

of nominal measurements are gender, language or marital status (Bryman & Cramer,

1997: 56).

6.2.2.2 Ordinal scale

As is the case with nominal measurement levels, ordinal levels are also distinguishable,

with one difference: categories can now be sequenced in terms of ‘more’ or ‘less’. The

respondent can, for example, provide additional characteristics about his/her career

status or educational background (Bryman & Cramer, 1997: 56).


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6.2.2.3 Interval scale

Within this measurement level, equal intervals are placed between different

categories. Numbers now correspond to differences in degree, and ranking of

characteristics is also now possible (Bryman & Cramer, 1997: 56). This scale is very

often used in surveys and questionnaires and will be predominantly applied to the

empirical analysis in Chapter 7.

6.2.2.4 Ratio scale

This measurement level is an extension of the interval measurement level with an

addition: absolute zero values are now included. Examples are income, family size and

age (Bryman & Cramer, 1997: 56/57).

6.2.3 Quality of measurement

Various conditions for good measurement are found in the literature. Neuman (1997:

152-153) argues that good measurement must satisfy three conditions, namely:

categories must be mutually exclusive;

possibilities must be exhaustive; and

measurement must be one-dimensional in order to measure a single construct.

Further conditions for quality of measurement are reliability and validity.

6.2.3.1 Reliability

Reliability demonstrates the consistency of measurement (Bryman & Cramer, 1997:

63; Uys, 2003: 122). This means that with repeated measurements, equivalent results

must be found. Neuman (1997: 138-141) states that reliability is mainly tested in three

ways. These are:

stability reliability: i.e. whether the instrument will provide the same results over

time;

representative reliability: i.e. whether the instrument will provide the same

results when applied to different sub-populations e.g. different age groups or


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gender groups; and

equivalence reliability: i.e. whether the instrument will provide the same result

when multiple indicators are used to measure a construct.

For this study, the issue of equivalence reliability is of great concern, as multiple

indicators were used. Equivalence reliability can be measured by using item analysis.

With this test, the response to each item versus the response to all the items in the

questionnaire is measured. The coefficient of reliability (Cronbach’s alpha or α) must

be at least 0.7 or higher to be reliable (Bryman & Cramer, 1997: 63/64).

6.2.3.2 Validity

Validity is the degree to which the measuring instrument actually measures what it is

supposed to measure (Uys, 2003: 123). Validity can firstly be divided into internal and

external validity.

a) Internal validity

In a quantitative study, the test for internal validity is how confident the researcher is

that the independent variable is at least partly responsible for the variation found in the

dependent variable (Smallbone & Quinton, 2004: 154).

Cooper and Schindler (2003: 231-236) sub-divide internal validity into three ‘types’ of

validity. These are:

content validity – is the definition of what is to be researched represented in the

measuring instrument?;

criterion validity – how does a measuring instrument weigh up to other

instruments if results are compared?; and

construct validity – to what degree do different measurement indicators

correspond to results from these indicators?

Very often a process called factor analysis is used to determine construct validity (Uys,

2003: 124). Factor analysis was invented nearly 100 years ago by psychologist Charles


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Spearman, who hypothesised that the enormous variety of tests of mental ability –

measures of mathematical skill, vocabulary, other verbal skills, artistic skills, logical

reasoning ability, etc. – could all be explained by one underlying ‘factor’ of general

intelligence that he called g (Williams, Zimmerman, Zumbo & Ross, 2003: 114).

Neuman (1997: 142) and Bryman and Cramer (1997: 66-67) also distinguish between

Cooper and Schindler types of validity but include a fourth type: face validity, i.e.

whether the measuring instrument is measuring what it is supposed to.

b) External validity

External validity concerns whether the results could be applied to other contexts or

situations and to what extent this might be possible. In quantitative studies the

representativeness of the sample is the key issue in generalising about a larger

population (Smallbone & Quinton, 2004: 154).

The validity of a sample depends on two considerations – namely, accuracy and

precision. Accuracy is the degree to which bias is absent from the sample (Cooper &

Schindler, 2003: 181). Even though precision is a criterion of a good sample design,

no sample will be fully representative of the population in all aspects (Cooper &

Schindler, 2003: 181).

6.3 QUESTIONNAIRE DESIGN

6.3.1 Introduction

Polit and Hungler (1991: 189) defined a survey as “... designating any research activity

in which data is obtained from a specific population for the purpose of examining

characteristics, opinions or intentions of that population.” The survey method of data

collection requires (Struwig & Stead, 2001: 41):

the application of questionnaires for data gathering;

the population (or universum) being studied must be accurately described;


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the sample should be representative of the population;

the scientific character of the data should not be adversely affected or

influenced by bias; and

data gathered should be systematically organised in order to make valid and

accurate interpretations.

Questionnaires (or surveys) have formed and will continue to form the bases of many

different research projects. Questionnaires are considered an appropriate method of

research if the ‘individual’ is the unit of analysis (Booysen, 2003: 129). A questionnaire

often provides unique ways of ascertaining attitudes, opinions, perceptions and reports

of individual behaviour (Booysen, 2003: 129).

Using questionnaires as a measuring instrument often compromises the validity of the

results as ‘direct intervention’ is not possible in many instances, for example mail

surveys. However, when the survey is done in a direct, personal format (as was done

in this study), the validity of the results tends to increase. This is done by, for example,

administering the questionnaire to a group of people where respondent behaviour can

be controlled (Booysen, 2003: 129).

6.3.2 General guidelines in constructing questionnaires

Various aspects to be considered in questionnaire design can be found in the literature

(for example Booysen, 2003; Struwig & Stead, 2001; Cooper & Schindler, 2003; Eiselen

et al., 2005). Some of these are:

ensuring that the research problem fits the questionnaire contents – it does not

leave space for respondent assumptions;

taking note of style and paying attention to language and formulation –

language must be unambiguous and clear;

looking at the order of the questions – that it is logical and does not allow for

bias in answers; and

paying attention to the format of the questionnaire – think ahead to the way

data will have to be analysed.


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6.3.3 Types of questions

Questions (or items) used in questionnaires are basically classified as either

unstructured with an open-ended response or structured with a closed response

(Cooper & Schindler, 2003: 373).

6.3.3.1 Open-ended questions

As open-ended questions have no pre-coded ‘answers’ and respondents are therefore

open to undue influence, they should be used with caution and only when necessary

(for example in a qualitative research design) (Eiselen et al., 2005: 21).

6.3.3.2 Closed questions

Closed questions in a questionnaire have response categories attached and

respondents should therefore only choose an applicable answer or answers (Eiselen

et al., 2005: 21). These responses can then be coded and analysed statistically.

Examples of closed questions include (Struwig & Stead, 2001: 94-95):

dichotomous questions with nominal scales e.g. yes/no or male/female;

scaled response questions which include Likert scales and semantic differential

scales; and

ranking questions such as ranked order scales.

For the purposes of this study a series of closed questions or items were used.

6.3.3.3 Likert scales

Likert scales, named after the ‘inventor’, Renis Likert, are by far the most common type

of survey item used in conjunction with questionnaires. Likert proposed a summated

scale for the assessment of respondents’ attitudes in questionnaires in 1931/32 (Gliem

& Gliem, 2003: 82).

Individual items in Likert’s sample scale had five response alternatives: strongly

approve; approve; undecided; disapprove; and strongly disapprove. Academics and

scholars use a ‘rule-of-thumb’ that there must be a certain minimum number of classes


CHAPTER 6 225

or responses. In general, five would be acceptable (as Likert suggested) but Berry

(1993: 47) states five or fewer is “… clearly inappropriate …”; others have insisted on

7 or more. The use of 5-point Likert scales with interval procedures is extremely

common in the literature, however.

a) Advantages of using Likert scales

Cooper and Schindler (2003: 253-256) provide the following advantages of using the

Likert scale in a questionnaire:

responses are gathered in a standardised way;

it is a relatively quick method of collecting information;

questionnaires can be relatively easy to construct;

responses can be collected from a large portion of a sample;

it is relatively easy to use; and

it gives participants a wide range of choices, which may make them feel more

comfortable in responding to questions.

b) Disadvantages of using Likert scales

Cooper and Schindler (2003: 253-256) also provide some disadvantages of employing

the Likert scale in a questionnaire. These are:

participants may not be completely honest, intentionally or unintentionally;

bias may be introduced as participants may base their responses on feelings

with regard to the assessor or the subject area;

participants may respond according to what they feel is expected of them as

participants;

the scale used in the questionnaire requires a great deal of decision-making;

and

it can take a long time to analyse and interpret the data.

c) Criticism of the use of the Likert scale

Although the Likert-scale is a useful method to determine judgements, it also has its


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fair share of assumptions that may be regarded as negative and should be taken into

consideration when utilising it. Clason and Dormody (2004: 31-33) noted:

Likert’s original work assumed an attitude scale would first be pilot-tested to

assess the reliability of the individual items before it would be used. Items that

would not correlate would be discarded;

Likert scaling presumes the existence of an underlying (or latent) continuous

variable whose value characterises the respondents’ attitudes and opinions;

Likert Scales are considered a misnomer by some, as their ordinality refers only

to an ordinal relationship of values within a single item. Many psychometricians

would argue that they are interval scales because, when well constructed, there

is equal distance between each value;

Likert items on the same subject are referred to as scales even though no test

of intercorrelation is employed to ensure a common meaning of items

comprising a latent variable; and

ignoring the discrete nature of the response can lead to inferential errors.

d) Likert scale employed in this study

Clason and Dormody (2004: 31) noted: “We see contemporary work using many

classifications besides the traditional five-point classifications; some researchers use

an even number of categories, deleting the neutral response.” Because Likert implied

that the number of alternatives were open to manipulation, this study employed a

manipulated Likert scale by only allowing for a 4-scale response and thereby

eliminating a ‘default’ median-response.

6.3.3.4 Ambiguity and bias

Some inherent ambiguity and bias is present in the research field of ethics (Rossouw,

2004: 30-31). This ambiguity stems from two sources, namely the nature of ethics and

the stage of development in this field of research. Rossouw (2004: 30-31) states that

this inherent ambiguity should be accounted for in the research strategy by using

open-ended questions, personal interviews or focus groups.


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This notion was taken into consideration in the research design of this study but for

practical and logistical reasons a questionnaire using closed questions was used, as

unstructured, open-ended questions would have meant the use of a qualitative

research design that required a different emphasis in its analysis. Even though it was

stated in section 6.2.1 that data gathered within a qualitative research design may be

used to generate hypotheses, this study used factor analysis for this purpose. Even

though open-ended type of questions cannot adequately deal with “... complex

attitudinal issues ...” (Booysen, 2003; 135), they were taken into consideration in the

ultimate design of the survey instrument used in this study.

6.4 THE SURVEY INSTRUMENT

6.4.1 Introduction

In order to address the research problem of the study, the researcher decided on the

use of a research questionnaire as a measurement instrument. Various questionnaires

used for other very similar studies were investigated to determine their usefulness to

this study (e.g. Diamond & Reidpath, 1992; Lee, 1997; Felicetti & Stewart, 1998;

Chambliss, 2003; Balotsky & Steingard, 2005; Hoffman, 2005).

Some features of these questionnaires were applicable but the majority of them were

not as they used a qualitative research design with the aid of vignettes. A detailed and

comprehensive questionnaire utilising a quantitative research design was therefore

developed in collaboration with the Statistical Consultation Service at the UJ.

6.4.2 Questionnaire layout

The questionnaire that students were asked to complete consisted of two sections.

The first section (Section A) dealt with the biographical background of the

respondents. Although the biographical background may not be central to this study,

it did assist the researcher in analysing the data in a holistic manner.

Section B of the questionnaire focused on six areas pertaining to the prospective CA.


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These were judgement items related to:

the CA and his/her profession (Section B1 – 25 items labelled as U1 – U25);

the CPD of CAs (Section B2 – 14 items labelled as V1 – V14);

aspects of LLL of CAs (Section B3 – 9 items labelled as W1 – W9);

aspects of ethics education related to CAs (Section B4 – 11 items labelled as

X1 – X11);

the core values CAs should demonstrate within their profession (Section B5

– 8 items labelled as Y1 – Y8); and

the education of CAs at RAU (Section B6 – 10 items labelled as Z1 – Z10).

FIGURE 6.1 indicates the various independent variables focused on in the study.

The CAprofession

CPD and CAs

LLL and CAs

Ethics and CAs

Core valuesof CAs

Educationof CAs

CPD of ethicsamongst

prospective CAs

FIGURE 6.1: Independent variables focused on in this study


One inherent limitation in the questionnaire design is the large number of items it


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included. As this study wished to describe something with a wide focus, the main issue

was estimating the effect of every possible variable that is likely to affect the

dependent variable (i.e. the CPD of ethics amongst prospective CAs) and therefore to

include as many independent variables – e.g. the CA profession; CPD and CAs; LLL and

CAs; Ethics and CAs; Core values of CAs; and Education of CAs (also see FIGURE 6.1).

Descriptive research, as was undertaken in this study, also provides an accurate

account of characteristics of a particular individual, event or group in real-life situations

(Hlongwa, 2003: 33).

6.4.3 Testing of the instrument

Testing the instrument (i.e. questionnaire) before it is used invariably brings to light

item ambiguities and other sources of bias and error. In fact, Converse and Presser

(1986: 65) argue persuasively that a minimum of two pre-tests are necessary, with

pre-test sizes of 25 – 75 administered to respondents similar to those who will be in

the final sample.

In the case of this study, five junior lecturers in the Department of Accounting at RAU,

who had just completed and passed their professional CA qualification examination,

completed the questionnaire and commented on it. Experts in the field of statistics

were also consulted on the probable effectiveness of the instrument. Due to the length

of the questionnaire, the ‘pre-testers’ were asked to see if respondents’ attention could

be maintained and if they felt that the survey had a natural flow.

As RAU is a bilingual higher education institution, the translation of the questionnaire

from English into Afrikaans was also an issue. After consideration and discussion with

statisticians at STATKON, it was a decided not to translate it into Afrikaans due to the

problem of validity. This is also the opinion of Behling and Law (2000), who suggested

that the simple direct translation of validated scale items into another language often

will not necessarily create a valid scale in that language.

After receiving feedback and comments, the researcher then made adjustments and


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came up with the final questionnaire that was given to students to complete. An

example of this questionnaire can be found in APPENDIX B of this study.

It is important to note at this point that the role of STATKON in this study was only that

of a soundboard for ideas and the entering of data in a spreadsheet format. All

calculations, analysis and interpretation in respect of the data were performed solely

by the writer/researcher himself (also see section 6.4.6).

6.4.4 Sampling approach

The sampling approach is a process of selecting a portion of the population to

represent the entire population (Cooper & Schindler, 2003: 181). The sample must

therefore be valid.

The non-probability sampling approach used in this research was purposive

(judgement) sampling. Judgement sampling occurs when a researcher selects sample

members to conform to some criterion (Cooper & Schindler, 2003: 201). For the

purposes of the empirical analysis in Chapter 7, a group of third-year students at a

residential university were used as respondents with the following criteria:

they all had to have the prescribed four major subjects (i.e. Accounting,

Auditing, Financial Management and Taxation) at a third-year level;

no students repeating any of the subjects were considered; and

they had to have the intention of continuing with an honours degree in

accounting the following year.

6.4.5 Administration

As this questionnaire was aimed at final-year accounting students at RAU, all the

third-year B Com Accounting students were visited at a combined lecture on the first

day of the second semester of their third year. This meant that a large percentage of

the population of accounting students were then targeted as the sample for this study.

Before commencing with the completion of the questionnaire, the aim of the study and

its various administrative aspects were explained to the students. Students were then


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given 30 minutes to complete this questionnaire under controlled conditions.

After the students completed the questionnaire, it was collected by the

writer/researcher and three student assistants.

6.4.6 Data analysis

The completed questionnaires were then handed to a data capturer for coding and

capturing. The data capturer was fully briefed on all categories of data as well as on

the pre-determined code rules to be used. After coding and capturing on a

spreadsheet, the data was forwarded to the writer/researcher by STATKON for analysis

and interpretation using the SPSS13® software package.

6.5 ETHICAL CONSIDERATIONS

In order to comply with the ethical constraints underlying the undertaking of a research

project such as this, attention was given to the following aspects:

6.5.1 Permission to collect data

Permission to conduct the survey amongst the students was sought and given by the

Head of the Department of Accounting, RAU.

6.5.2 Informed consent

Prior to the handing out of questionnaires (see section 6.4.5), consent was asked from

each participant. Although no written consent was sought, participants were informed

that if they did not wish to participate, they were free to hand back their uncompleted

questionnaires.

6.5.3 Confidentiality and anonymity

To ensure confidentiality, respondents were reassured verbally and in writing (on the

cover of the questionnaire) that the information would be treated with the utmost

confidence. Although various research reports would be published, it would contain

figures, percentages and deductions based on the analysis and interpretation of the


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data provided without identifying any respondent personally.

An example of the questionnaire can be found in APPENDIX B of this study.

6.6 ANALYSIS OF DATA

6.6.1 Descriptive analysis of data

Within each of the areas in Section B of the questionnaire, described in section 6.4.2,

students had to respond to items by indicating to which extent they agreed or

disagreed with the items. Each item was judged using a 4-point Likert scale consisting

of:

1 = Strongly agree

2 = Agree

3 = Disagree

4 = Strongly disagree

The analysis pertaining to each area in Section B of the questionnaire will therefore

always commence with a descriptive analysis of the data. This will include providing

basic information about the data describing the:

number of valid and missing responses;

range of responses (i.e. range, minimum and maximum);

central tendency of responses (e.g. mean values);

standard deviation and variance of responses;

skewness of responses with the standard error of skewness; and

kurtosis of responses with the standard error of kurtosis.

6.6.1.1 Standard deviation

A standard deviation is a statistical measure which expresses the average deviation (or

dispersion) about the mean (Wegner, 1993: 92).


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6.6.1.2 Skewness

Skewness provides information on the symmetry of the distribution (Pallant, 2005: 51).

In a normal symmetrical distribution, one would find that the degree of skewness tends

to be equal to zero where the mean score is equal to the median score.

A positively skewed distribution indicates that scores are clustered to the left of the

graph at low values and in general the mean score is greater than the median score.

Negative skewness indicates a clustering of scores at the high-end (or right hand side)

of the graph and in general the mean score is less than the median score (Pallant,

2005: 52).

6.6.1.3 Kurtosis

Kurtosis provides information on the ‘peakedness’ of the distribution. Positive kurtosis

indicates that the distribution is peaked (i.e. scores clustered around the centre) or

‘leptokurtic’ (i.e. has long, thin tails). Kurtosis values below 0 indicate a distribution

that is relatively flat (i.e. too many cases in the extremes or ‘platykurtic’).

In a normal symmetrical distribution, one would find that kurtosis tends to be equal to

zero (Pallant, 2005: 51). Kurtosis may sometimes be the result of an underestimation

of the variance but this risk is reduced with a sample of 200 or more cases (Pallant,

2005: 52). Even though the results of this analysis done on the data used in this study

showed the presence of negative kurtosis, one can ignore it, however, as the sample

was greater than 200 (n = 491). (Also see section 6.6.2.2.)

As was pointed out in section 6.2.2, this was a descriptive study, which meant a large

number of items had to be included. In order to give statistical meaning to the

analysis, factor analysis was employed to determine the underlying dimensions of the

various attitudes emerging in the data (Eiselen et al., 2005: 104).


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6.6.2 Factor analysis


Exploratory factor analysis and confirmatory factor analysis are two statistical

approaches used to examine the internal reliability of a measure. Both are used to

investigate the theoretical constructs, or factors, that might be represented by a set

of items.

Other characteristics of the two methods are:

either can assume the factors are uncorrelated (i.e. orthogonal);

both are used to assess the quality of individual items; and

both can be used for exploratory or confirmatory purposes (Pallant, 2005: 96).

6.6.2.2 Aim of factor analysis

The most common form of factor analysis, namely exploratory factor analysis, is used

to uncover the latent structure (or dimensions) of a set of variables or opinion-related

questions (items) (Eiselen et al., 2005: 104-105) and allows one to condense a large

number of variables or scale items into a smaller, more manageable number of

dimensions or factors (Pallant, 2005: 96). In exploratory factor analysis the

researcher’s à priori assumption is that any indicator may be associated with any

factor.

Using exploratory factor analysis (as was the case in this empirical study) reduces

attribute space from a larger number of variables to a smaller number of factors and

as such is a ‘non-dependent’ procedure, that is, it does not assume that a dependent

variable is specified (Pallant, 2005: 96).

The mathematical detail of factor analysis is beyond the scope of this study but there

will be instances where some mathematical detail will be provided for the sake of

completeness.


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6.6.2.3 Practical considerations when using exploratory factor analysis

a) Sample size

For factor analysis to provide valid results, the number of respondents should be at

least four times the number of variables (Eiselen et al., 2005: 105). Sometimes

statisticians are of the opinion that the ratio of respondents to the number of items

should be 10:1 (Pallant, 2005: 174). If this ‘ratio test’ is used in this analysis, factor

analysis can be employed because this would imply a total of 250 respondents. The

number of respondents in this analysis was 491.

b) Factor extraction method

Factor extraction involves determining the smallest number of factors that can be used

to best represent the interrelations among the set of variables (Pallant, 2005: 174).

If all variables in factor analysis are continuous and assumed to be normally

distributed, the maximum likelihood factoring method may be employed (Eiselen et al.,

2005: 105). As these two assumptions may not be valid for this analysis, the extraction

method of Principal Axis Factoring will be used in the analysis.

c) Method of rotation

Rotation is merely used to assist with the interpretation or identification of variables

making up or contributing most to a factor. Two types of rotation can be identified,

namely orthogonal and oblique rotation (Eiselen et al., 2005: 105-106).

For the purposes of this and further analyses in this study, the Varimax method of

orthogonal rotation with Kaizer Normalisation (or the Eigenvalue rule) will be used, as

orthogonal rotations yield factors uncorrelated with one another and authors also

believe that oblique rotations provide unstable results (Pallant, 2005: 175; Eiselen et

al., 2005: 106).

Orthogonal rotation also results in solutions that are easier to interpret; they do

however require an assumption that the underlying constructs are independent or not


CHAPTER 6 236

correlated (Pallant, 2005: 176).

d) Reliability of factor analysis

The reliability of the application of factor analysis will be determined by:

the Kaiser-Meyer-Olkin Measure of Sampling Adequacy;

Bartlett’s Test of Sphericity; and

Initial Eigenvalues.

(i) Kaiser-Meyer-Olkin Measure of Sampling Adequacy

Although some statisticians feel that the Kaiser-Meyer-Olkin Measure of Sampling

Adequacy (hereafter KMO) value should be greater than 0.5 or 0.6 (Eiselen et al.,

2005: 107), for the purposes of this analysis the statistical impact was placed at 0.7.

Any value greater than 0.7 will therefore mean that a factor analysis will be warranted

as there is enough correlation between an item and the rest of the other items (Eiselen

et al., 2005: 107/108)

(ii) Bartlett’s Test of Sphericity

Bartlett’s Test of Sphericity (hereafter Barlett’s Test) tests the hypothesis that the

correlation matrix is an identity matrix and all items will therefore be uncorrelated

(Eiselen et al., 2005: 107). Small p-values (i.e. significance or Sig. less than 0.05)

indicate that a factor analysis may be useful.

Two other diagnostic measures that are used to decide whether a factor analysis is

warranted is the Anti-image Correlations and Initial Eigenvalues (Eiselen et al., 2005:

107-108).

(iii) Initial Eigenvalues

The Initial Eigenvalues (also known as characteristic roots) are used to explain the total

variance. When one performs a factor analysis, the ideal situation is to use as few

factors as possible (i.e. to reduce the data) but to still allow these factors to contain

as much of the information provided as possible.


CHAPTER 6 237

The ‘ideal’ number of factors to be used can be determined using the Eigenvalue

criterion. This criterion states that the number of factors to be used is equal to the

number of factors with Eigenvalues greater than 1 (Eiselen et al., 2005: 108).

6.6.3 Item analysis

Factor analysis does not indicate whether each individual item is highly correlated with

the scale as a whole. To determine the extent to which the items in this study are

collectively correlated with the scale an item analysis will be performed. In an item

analysis one is interested in how well the responses of each item in a factor (scale of

items) correspond to the other items and the scale as a whole (Eiselen et al., 2005:

112).

6.6.4 Factor scores

Following the item analysis, factor scores will be calculated and interpreted. In order

to calculate the factor scores, i.e. the average score for each respondent for each of

the factors, the average (or mean) response for each respondent will be calculated

(Eiselen et al., 2005: 116).

The question now arises as to whether the means calculated (i.e. the factor scores) for

each factor differs on a gender basis. This will be tested by developing various

hypotheses and then exploring the differences between the gender groups.

6.6.5 Development of hypotheses

In order to explore the differences between the gender groups, various hypotheses

will be developed. The null-hypothesis will state that the means between the gender

groups are equal e.g. H0: µM = µF whereas the alternative hypothesis will state that the

means between the gender groups are not the same e.g. H1: µM ≠ µF.

6.6.6 Testing of hypotheses


When one explores the differences between gender groups, for example, one is trying


CHAPTER 6 238

to see whether there is a statistically significant difference between male students and

female students (Pallant, 2005: 96/97).

6.6.6.2 t-tests for independent samples

An appropriate test that can be used is the t-test for independent samples between two

groups based on gender for example (Collis & Hussey, 2003: 244; Eiselen et al., 2005:

76; Pallant, 2005: 196). Within the t-test for independent samples, any p > 0.05 will

mean that the null hypothesis will not be rejected, as that there is no statistically

significant difference between the gender groups.

Other statistical alternatives do exist to measure differences in interval data items (as

was used in the questionnaire). These include the Mann-Whitney U test and the

Pearson Chi-square test (Cooper & Schindler, 2003: 596).

6.6.6.3 Mann-Whitney U test

The Mann-Whitney U Test is used to test differences between two independent groups

on a continuous measure (Pallant, 2005: 291) by comparing the means of two groups

i.e. male and female students.

6.6.6.4 Pearson Chi-square test

Another non-parametric test that may be used to explore the interrelationship amongst

variables is the Pearson Chi-square ( 2χ ) test for independence (Pallant, 2005: 104,

287).

6.7 SUMMARY

This chapter provided a logical basis and framework which will be used in the empirical

analysis to be completed in Chapter 7.

---o0o---

239

CHAPTER 7 Empirical analysis

7.1 INTRODUCTION

he focus of this study is to determine the utilisation of CPD of ethics amongst

prospective CAs. As part of the statistical analysis of this thesis, the objectives

provided in Chapter 1 of this study will be empirically analysed. These objectives

are to:


perceptions;


framework of CAs and their undergraduate education;


(iv) analyse certain aspects of the education and training of CAs at the Rand

Afrikaans University (hereafter RAU).

Chapter 3 of the study focused on CPD of CAs, but also showed that acquiring

professional ethics, values and attitudes should be done at an undergraduate level in

order to ensure an attitude of LLL. SDL was suggested as a method to acquire LLL

through the use of PBL.

In Chapter 4 of this study a detailed discussion of the terms ‘ethics’ as well as ‘business

ethics’ was given, and this was then taken further in Chapter 5, which outlined possible

T

Empirical analysis

CHAPTER 7 240

methods of teaching business ethics. Chapter 6 provided an overview of the research

methodology to be used in this chapter.

This chapter continues with a detailed and logical analysis of all the sections of the

questionnaire (see APPENDIX B) used in the empirical study. All information obtained

from the questionnaires (unless stated otherwise) will first be subjected to a descriptive

and exploratory analysis. This will then be followed by a factor analysis of the items in

each section using the Principal Axis method of factor extraction with Varimax rotation

and Kaizer Normalisation.

Where the calculation of the Kaiser-Meyer-Olkin Measure of Sampling Adequacy and

Bartlett’s Test of Sphericity indicate that the matrix of item intercorrelation can be

extracted, an item analysis will be performed on each factor. Appropriate factor scores

will also be calculated and interpreted, and these will then be used to perform

hypothesis testing using the t-test for independent samples.

In cases where factor analysis cannot provide adequate information to continue with

the calculation of factor scores and interpretation of factor items, the Mann-Whitney U

Test will be used to test differences between two independent groups as part of the

hypothesis testing.

The chapter commences with a narrative analysis of the attitudes of undergraduate

students toward CPD of ethics by focusing on the six groups of variables especially

analysed in Chapter 6 of this study. It then continues by way of providing some

thoughts on utilising CPD of ethics amongst prospective CAs. A full interpretation of the

empirical analysis provided in this chapter will be discussed in Chapter 8.

The chapter concludes with summary comments.

Empirical analysis

CHAPTER 7 241

7.2 STUDENTS’ PROFILE

7.2.1 Gender

All the data collected from the questionnaires with regard to Students’ profile

(Section A), has been analysed and is described and presented in detail in APPENDIX

C of this study.

The original sample consisted of 494 students. Due to the incomplete responses on

three questionnaires, statistical analysis was performed with a sample of only 491

students. As can be seen from FIGURE 7.1 below, the sample student profile

therefore consisted of 491 respondents and was fairly equally divided between male

(n = 241) and female (n = 250) respondents at 49.1% and 50.9% respectively.

Female50.9%

Male49.1%

FIGURE 7.1: Gender profile of respondents (n = 491)

SOURCE: Table C1

7.2.2 Year matriculated

Of these respondents, 61.3% (n = 301) matriculated in 2001 (FIGURE 7.2 on the

following page). Interestingly, 1.2% (n = 6) of the respondents matriculated prior to

1992, with one student stating that he/she matriculated as early as 1972!

Empirical analysis

CHAPTER 7 242

0

20

40

60

80

100

120

140

160

Freq

uenc

y

1972 1986 1989 1991 1993 1995 1997 1999 2001

Year

Male Female

FIGURE 7.2: Year of matriculation by respondents (n = 489; two respondents did not

provide this information)

SOURCE: Table C3

7.2.3 Highest educational qualification

From the sample of 491, 90.02% of the respondents indicated their highest educational

qualification to be Grade 12 (FIGURE 7.3 on the following page). Fewer than five

percent (4.68%) of the respondents do however have some form of post-school

qualification in the form of either a diploma or certificate.

Twenty-five (5.09%) of the respondents in the sample indicated that they are already in

possession of an undergraduate degree, with one student indicating that he had a

postgraduate qualification.

The most researched attribute, as regards the ethical views and behaviour of

accounting students, is gender, and this can be ascribed to the increase in the number

of female accounting students, but also the general view that females tend to be more

moral and ethical than males (Sadler & Barac, 2005: 113). Further analysis was done

using gender as an attribute.

Empirical analysis

CHAPTER 7 243

0

50

100

150

200

250

Freq

uenc

y

Grade 12 Post-schooldiploma

Post-schoolcertificate

Under-graduatedegree

Post-graduatedegree

Qualification

Male Female

FIGURE 7.3: Highest educational qualification (n = 491)

SOURCE: Table C4

7.3 THE CHARTERED ACCOUNTANT AND HIS/HER PROFESSION

7.3.1 Descriptive analysis

The first part of Section B included 25 items (U1 – U25) about the chartered

accountant and his/her profession. All the data collected from the questionnaires with

regard to this section has been analysed and is described in detail in TABLE D1a and

TABLE D1b in APPENDIX D of this study. The tables provide basic information about

the data describing the:

number of valid and missing responses;

range of responses (i.e. range, minimum and maximum);

central tendency of responses (e.g. mean values);

standard deviation and variance of responses;

skewness of responses with the standard error of skewness; and

kurtosis of responses with the standard error of kurtosis.

Empirical analysis

CHAPTER 7 244

TABLE D2 (in APPENDIX D) provides a single, collated frequency tabulation of all the

responses in this data set. The mean response (in ascending order) and standard

deviation to the items are provided in TABLE 7.1 below.

TABLE 7.1: The chartered accountant and his/her profession

Items Mean Standard deviation

U4: CAs should have high ethical standards. 1.17 0.395

U7: CAs have an ethical obligation to their clients, employers and

stakeholders. 1.19 0.406

U9: CAs should act in accordance with applicable professional ethical

standards. 1.24 0.430

U10: A training programme for CAs should be more than a mere transfer of

knowledge. 1.38 0.568

U17: Competency is a critical issue in the CA’s profession. 1.38 0.530

U21: In addition to acquiring theoretical knowledge and skills, today's CAs

need other skills. 1.38 0.519

U5: CAs should continually adapt to change. 1.39 0.517

U1: CAs should learn continuously. 1.42 0.557

U22: The education of CAs should enable them to adapt to change. 1.45 0.530

U23: The education of CAs should provide a foundation of various

professional skills. 1.45 0.519

U6: The education of CAs should provide a foundation of ethical values. 1.46 0.589

U2: Training programmes for CAs should follow an integrated approach with

regard to professional ethics, values and attitudes. 1.49 0.516

U25: CAs are continuously challenged to maintain competence. 1.50 0.573

U13: The credibility of CAs depends on their ethical approach to the work

they do. 1.51 0.597

U20: The competency of CAs also includes their professional values, ethics

and attitudes. 1.54 0.557

U18: CAs are trusted professionals. 1.55 0.679

U24: CAs enable organisations to shape their financial future. 1.58 0.589

U3: A CA will be able to focus on continued learning throughout his/her

career if he/she learnt how to do this as part of his/her training. 1.60 0.629

Empirical analysis

CHAPTER 7 245


U8: CAs are regarded as professionals once they have completed the

required basic training. 1.62 0.720

U12: The education of CAs should cultivate a culture of LLL. 1.70 0.585

U15: The teaching of professional values and ethics at an undergraduate

level should be seen as a process rather than a course. 1.74 0.642

U16: The education of CAs should provide a basic foundation of knowledge. 1.80 0.658

U11: A professional CA is the same as an ethical CA. 2.12 0.931

U19: The education of CAs should only entail relevant theoretical knowledge

at a given point in time. 2.81 0.774

U14: CAs only need sufficient theoretical knowledge for qualification

purposes. 2.96 0.885

SOURCE: SPSS Output

Twenty-two (or 88%) of the items scored a mean of less than 2 (i.e. ‘agree’). Two of

the items (i.e. U19 and U14) scored a mean close to 3 (i.e. ‘disagree’) and U11 scored a

mean just over 2 (i.e. ‘agree’). In respect of the latter, respondents were of the opinion

that an ethical CA is the same as a professional CA. It is important to note that none of

the responses were above a 3 (i.e. ‘disagree’). This issue will again be discussed in

section 7.3.2.1.

In FIGURE 7.4 (on the following page) one notices that, with the exception of eight

items, all had mean responses greater than the median response. For the majority of

the items posed, respondents replied close to a 1 (i.e. ‘strongly agree’) on the Likert

scale. From the responses it may seem that respondents confused issues regarding a

‘professional CA’ and an ‘ethical CA’ (item U11).

What is also interesting is that respondents were nearly all in complete agreement that

ethics is an important aspect in the professional life of a CA (item U4). This

corresponds well with a study by Sadler and Barac (2005).

Empirical analysis

CHAPTER 7 246

0

0.5

1

1.5

2

2.5

3

3.5

4

U1 U2 U3 U4 U5 U6 U7 U8 U9U10 U11 U12 U13 U14 U15 U16 U17 U18 U19 U20 U21 U22 U23 U24 U25

Res

pons

e (L

iker

t-sca

le)

Median Mean FIGURE 7.4: Mean and median distribution for the chartered accountant and

his/her profession (n = 491)

SOURCE: TABLE D1

7.3.2 Some important aspects of the data found in the descriptive

analysis

For the purposes of this study it is important to highlight a few issues noticed in the

data pertaining to Section B1 of the questionnaire that dealt with aspects of the

chartered accountant and his/her profession.

7.3.2.1 A professional CA: an ethical CA?

In responses for item U11 (TABLE 7.2), it was found that 67.2% of the respondents

agreed (i.e. either ‘strongly agree’ or ‘agree’) with this statement, whereas 32.8% of

respondents disagreed (i.e. either ‘disagree’ or ‘strongly disagree’), which may explain

why the mean response was 2.12. It is interesting to note that the respondents (all

prospective CAs) generally see themselves as both ethical and professional in the same

sense.

Empirical analysis

CHAPTER 7 247

TABLE 7.2: Descriptive analysis: Item U11 (Section B1)

RESPONSE f %

Strongly agree (1) 145 29.5

Agree (2) 185 37.7

Disagree (3) 119 24.2

Strongly disagree (4) 42 8.6

A professional CA is the same as an

ethical CA.

TOTAL 491 100.0

SOURCE: TABLE D2

It may be correct to presume that once you have qualified as a professional CA, you

may write the designation CA (SA) behind your name to indicate your professionalism,

as was discussed in section 2.3.3 and highlighted in the responses to Items U8 and U18

(TABLE 7.2a and TABLE 7.2b). On average about 89.5% of the responses were all

either in strong agreement (a response of 1) or agreement (a response of 2).

TABLE 7.2a: Descriptive analysis: Item U8 (Section B1)

RESPONSE f %


Agree (2) 178 36.3

Disagree (3) 57 11.6


CAs are regarded as professionals once

they have completed the required basic

training.

TOTAL 491 100.0

SOURCE: TABLE D2

TABLE 7.2b: Descriptive analysis: Item U18 (Section B1)

RESPONSE f %


Agree (2) 179 36.5

Disagree (3) 37 7.5


CAs are trusted professionals.

TOTAL 491 100.0

SOURCE: TABLE D2

Empirical analysis

CHAPTER 7 248

The 67.2% of the respondents who agreed that an ethical CA is the same as a

professional CA in item U11, however, held different views and responses to item U13

(TABLE 7.2c), where 94.7% of them agreed (i.e. either ‘strongly agree’ or ‘agree’) that

the credibility (i.e. professionalism) of a CA depends on the CAs’ ethical approach to the

work they do.

TABLE 7.2c: Descriptive analysis: Item U13 (Section B1)

RESPONSE f %


Agree (2) 200 40.7

Disagree (3) 26 5.3


The credibility of CAs depends on their

ethical approach to the work they do.

TOTAL 491 100.0

SOURCE: TABLE D2

The responses gathered in item U13 above were furthermore highlighted by the

responses for item U4 (TABLE 7.2d), where 99.4% of the respondents were in

complete agreement that CAs should have high ethical standards.

TABLE 7.2d: Descriptive analysis: Item U4 (Section B1)

RESPONSE f %


Agree (2) 79 16.1

Disagree (3) 3 0.6


CAs should have high ethical standards.

TOTAL 491 100.0

SOURCE: TABLE D2

This strong acceptance of ethical standards was taken further in item U9 (TABLE 7.2e

on the following page), where respondents were in complete agreement that CAs

should act according to applicable professional standards as they have an ethical

obligation towards their clients, employers and stakeholders (item U7, TABLE 7.2f on

the following page).

Empirical analysis

CHAPTER 7 249

TABLE 7.2e: Descriptive analysis: Item U9 (Section B1)

RESPONSE f %


Agree (2) 120 24.4

Disagree (3) 0 0.0


CAs should act in accordance with

applicable professional ethical standards.

TOTAL 491 100.0

SOURCE: TABLE D2

TABLE 7.2f: Descriptive analysis: Item U7 (Section B1)

RESPONSE f %


Agree (2) 86 17.5

Disagree (3) 3 0.6


CAs have an ethical obligation to their

clients, employers and stakeholders.

TOTAL 491 100.0

SOURCE: TABLE D2

7.3.2.2 Basic theoretical knowledge versus additional knowledge

Some 74.3% of respondents disagreed (i.e. either ‘disagree’ or ‘strongly disagree’) with

item U14 (TABLE 7.3) that CAs do not only need sufficient theoretical knowledge for

qualification purposes.

TABLE 7.3: Descriptive analysis: Item U14 (Section B1)

RESPONSE f %


Agree (2) 88 18.0

Disagree (3) 220 44.9


CAs only need sufficient theoretical

knowledge for qualification purposes.

TOTAL 490 100.0

SOURCE: TABLE D2

Empirical analysis

CHAPTER 7 250

TABLE 7.3a: Descriptive analysis: Item U16 (Section B1)

RESPONSE f %


Agree (2) 282 57.7

Disagree (3) 44 9.0


The education of CAs should provide a

basic foundation of knowledge.

TOTAL 489 100.0

SOURCE: TABLE D2

In item U16 (TABLE 7.3a) close to 90% of the respondents agreed that the education

of CAs should provide the basic foundation of theoretical knowledge for qualification but

item U21 (TABLE 7.3b) qualified this where nearly 97% of the respondents agreed

that there should be something extra than just the mere transfer of knowledge.

TABLE 7.3b: Descriptive analysis: Item U21 (Section B1)

RESPONSE f %


Agree (2) 153 31.2

Disagree (3) 15 3.1


In addition to acquiring theoretical

knowledge and skills, today's CAs need

other skills.

TOTAL 491 100.0

SOURCE: TABLE D2

This so-called ‘something extra’ was hinted at in item U23 (TABLE 7.3c on the

following page), where it was stated that the education should provide a foundation of

various skills (with only one percent of the respondents now in disagreement).

Empirical analysis

CHAPTER 7 251

TABLE 7.3c: Descriptive analysis: Item U23 (Section B1)

RESPONSE f %


Agree (2) 212 43.4

Disagree (3) 5 1.0



foundation of various professional skills.

TOTAL 489 100.0

SOURCE: TABLE D2

In item U6 (TABLE 7.3d), these additional skills were classified as a foundation of

ethical values, with only 20 respondents (4.1%) disagreeing or strongly disagreeing

with the statement.

TABLE 7.3d: Descriptive analysis: item U6 (Section B1)

RESPONSE f %


Agree (2) 185 37.7

Disagree (3) 18 3.7



foundation of ethical values.

TOTAL 491 100.0

SOURCE: TABLE D2

As was pointed out in section 7.3.1, the first set of items in Section B consists of 25

different categorical items. In order to reduce the large number of items to a smaller

number that may give meaning to the analysis, one would employ factor analysis to

determine the underlying dimensions of the various attitudes emerging in the data (also

see section 6.5.2.1).

7.3.3 Factor analysis of the items measuring the chartered

accountant and his/her profession

7.3.3.1 Factor analysis 1

This analysis wished to determine the underlying factors (or dimensions) in the 25

Empirical analysis

CHAPTER 7 252

opinion-related items. This means that one would require at least 100 respondents

(25 × 4) to have valid results. As this study had 491 respondents, factor analysis can

therefore be used.

In the first round of factor analysis the size consideration for the use of factor analysis

was determined by (i) the Kaiser-Meyer-Olkin Measure of Sampling Adequacy; and (ii)

Bartlett’s Test of Sphericity (see TABLE 7.4 below).

TABLE 7.4: KMO and Bartlett's Test (First factor analysis: Section B1)

Kaiser-Meyer-Olkin Measure of Sampling Adequacy .886

Bartlett's Test of Sphericity Approximate Chi-Square 3168.802

Degrees of freedom 300

Significance .000

SOURCE: SPSS Output

The Kaiser-Meyer-Olkin Measure of Sampling Adequacy (hereafter KMO) was calculated

at a level of 0.886. As 0.886 > 0.7, this value indicated that a factor analysis is

warranted as there is enough correlation between pairs of items. Barlett’s Test

indicated that a factor analysis may be useful with p-values smaller than 0.05 (p =

0.000).

TABLE 7.5 (on the following page) provides the Measures of Sampling Adequacy

(hereafter MSA) taken from the Anti-image Correlation table produced for the first

round of factor analysis by the SPSS13® software package. The MSAs running down

the main diagonal of the matrix are marked with an a. MSA is an indication of the

extent to which a particular item is correlated with other items.

Empirical analysis

CHAPTER 7 253

TABLE 7.5: Anti-Image Matrices (Anti-Image Correlation – Factor Analysis 1)

Items U1 U2 U3 U4 U5 U6 U7 U8 U9 U10 U11 U12 U13 U14 U15 U16 U17 U18 U19 U20 U21 U22 U23 U24 U25

U1 .859a -.231 -.145 .031 -.140 .088 -.052 .011 -.009 .012 -.015 -.267 .041 .009 -.051 .071 -.051 .047 .081 .030 -.001 -.022 .020 .049 -.009

U2 -.231 .913a -.113 -.032 .028 -.202 .039 -.002 -.137 .002 -.088 -.012 -.074 .035 -.049 -.031 .026 -.032 -.022 -.152 -.027 .077 -.091 -.010 -.103

U3 -.145 -.113 .898a -.140 .031 -.153 .024 -.071 .102 -.033 -.042 -.103 -.169 .035 -.012 -.052 -.024 .080 -.021 .137 -.026 -.024 -.136 -.121 .010

U4 .031 -.032 -.140 .859a -.123 -.126 -.229 .034 -.220 -.047 -.009 -.029 -.030 .079 -.003 .093 .046 -.169 -.045 -.098 -.065 .070 .090 -.027 .081

U5 -.140 .028 .031 -.123 .925a -.060 -.037 .033 .044 -.067 .007 -.080 -.058 .062 -.033 .028 -.115 -.107 -.023 -.048 .090 -.217 -.076 -.019 -.055

U6 .088 -.202 -.153 -.126 -.060 .907a -.096 .004 -.086 -.075 .061 -.032 -.030 -.076 .011 -.054 .023 -.033 .049 -.096 .039 -.066 -.059 .134 .017

U7 -.052 .039 .024 -.229 -.037 -.096 .906a -.021 -.256 -.041 .055 -.038 -.001 .075 .034 -.067 -.065 -.005 -.028 -.072 -.079 .008 -.042 .000 -.001

U8 .011 -.002 -.071 .034 .033 .004 -.021 .860a -.187 .011 -.121 -.036 .046 -.070 -.027 -.023 -.012 -.065 .034 -.034 .016 .044 -.007 -.115 -.029

U9 -.009 -.137 .102 -.220 .044 -.086 -.256 -.187 .854a -.041 .005 .087 -.137 -.033 -.032 -.055 -.108 .043 .154 .002 .099 -.067 -.040 .008 -.019

U10 .012 .002 -.033 -.047 -.067 -.075 -.041 .011 -.041 .927a -.073 -.117 .025 .056 -.032 -.037 .031 .038 .015 -.002 -.056 .001 .000 .045 -.134

U11 -.015 -.088 -.042 -.009 .007 .061 .055 -.121 .005 -.073 .812a -.113 -.095 -.157 .131 -.014 .077 -.125 -.039 -.042 .029 -.036 -.019 .006 -.037

U12 -.267 -.012 -.103 -.029 -.080 -.032 -.038 -.036 .087 -.117 -.113 .917a -.177 -.067 -.033 -.045 -.005 .010 .012 -.067 -.036 -.103 -.006 .008 .009

U13 .041 -.074 -.169 -.030 -.058 -.030 -.001 .046 -.137 .025 -.095 -.177 .910a -.038 -.153 .011 -.115 .008 .075 -.067 .052 .046 .037 -.059 -.028

U14 .009 .035 .035 .079 .062 -.076 .075 -.070 -.033 .056 -.157 -.067 -.038 .576a -.078 -.149 .032 -.087 -.330 .012 .042 -.024 .080 -.005 .035

U15 -.051 -.049 -.012 -.003 -.033 .011 .034 -.027 -.032 -.032 .131 -.033 -.153 -.078 .880a -.199 -.017 .059 .003 -.116 -.132 .004 .038 .008 -.068

U16 .071 -.031 -.052 .093 .028 -.054 -.067 -.023 -.055 -.037 -.014 -.045 .011 -.149 -.199 .874a -.032 -.065 -.111 .023 .004 -.065 -.088 -.019 .016

U17 -.051 .026 -.024 .046 -.115 .023 -.065 -.012 -.108 .031 .077 -.005 -.115 .032 -.017 -.032 .892a -.151 -.057 -.020 -.133 -.138 .038 .130 -.162

U18 .047 -.032 .080 -.169 -.107 -.033 -.005 -.065 .043 .038 -.125 .010 .008 -.087 .059 -.065 -.151 .854a .037 .021 -.010 .002 -.021 -.168 -.039

U19 .081 -.022 -.021 -.045 -.023 .049 -.028 .034 .154 .015 -.039 .012 .075 -.330 .003 -.111 -.057 .037 .565a -.059 .037 -.029 .021 -.059 .018

U20 .030 -.152 .137 -.098 -.048 -.096 -.072 -.034 .002 -.002 -.042 -.067 -.067 .012 -.116 .023 -.020 .021 -.059 .933a -.056 -.044 -.053 -.043 -.053

U21 -.001 -.027 -.026 -.065 .090 .039 -.079 .016 .099 -.056 .029 -.036 .052 .042 -.132 .004 -.133 -.010 .037 -.056 .900a -.232 -.143 -.104 .005

U22 -.022 .077 -.024 .070 -.217 -.066 .008 .044 -.067 .001 -.036 -.103 .046 -.024 .004 -.065 -.138 .002 -.029 -.044 -.232 .886a -.353 -.137 .019

U23 .020 -.091 -.136 .090 -.076 -.059 -.042 -.007 -.040 .000 -.019 -.006 .037 .080 .038 -.088 .038 -.021 .021 -.053 -.143 -.353 .908a -.098 -.090

U24 .049 -.010 -.121 -.027 -.019 .134 .000 -.115 .008 .045 .006 .008 -.059 -.005 .008 -.019 .130 -.168 -.059 -.043 -.104 -.137 -.098 .859a -.269

U25 -.009 -.103 .010 .081 -.055 .017 -.001 -.029 -.019 -.134 -.037 .009 -.028 .035 -.068 .016 -.162 -.039 .018 -.053 .005 .019 -.090 -.269 .902a

SOURCE: SPSS Output

* a Measures of Sampling Adequacy (MSA)

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CHAPTER 7 254

If MSA for a particular item is greater than or equal to 0.7, it has sufficient correlation

with at least one other item to be retained in the factor analysis. From TABLE 7.5 (on

the previous page) it was found that the MSAs for items U14 and U19 (items dealing

with the necessary theoretical knowledge a CA needs) are less than the cut-off of 0.7.

These two items were thus removed and were not used in any further analysis.

The Initial Eigenvalues (also known as characteristic roots) are used to explain the total

variance. As the factor analysis had to be repeated without the inclusion of these two

items/variables, the Initial Eigenvalues of the second factor analysis will only be

referred to.

7.3.3.2 Factor analysis 2

A second round of factor analysis was performed with the exclusion of items U14 and

U19 from the data. The KMO (see TABLE 7.6 below) was recalculated at a level of

0.895 > 0.7 and p < 0.05 (p = 0.000), and a factor analysis was warranted.

TABLE 7.6: KMO and Bartlett's Test (Second factor analysis: Section B1)




Significance .000

SOURCE: SPSS Output

TABLE D3 (in APPENDIX D) provides the MSAs for the second round of factor

analysis and all these values were greater than or equal to 0.7. The Initial Eigenvalues

drawn from the analysis are indicated in TABLE 7.7 on the following page.

In theory, 23 different factors can be formed, as 23 items were used in this factor

analysis; but if one uses all 23 items there will be no reduction in data. The ideal

situation is to use as few factors as possible (i.e. to reduce the data) but to still allow

these factors to contain as much of the information provided as possible.

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CHAPTER 7 255

TABLE 7.7: Total Variance Explained (Section B1)

INITIAL EIGENVALUES FACTOR

Total % of Variance Cumulative %

1 6.457 28.075 28.075

2 1.552 6.749 34.824

3 1.273 5.535 40.359

4 1.251 5.440 45.800

5 1.089 4.737 50.536

6 .945 4.107 54.643

7 .908 3.947 58.590

8 .890 3.870 62.461

9 .852 3.706 66.167

10 .800 3.477 69.644

11 .764 3.323 72.967

12 .727 3.161 76.127

13 .686 2.985 79.112

14 .676 2.940 82.052

15 .587 2.554 84.606

16 .547 2.378 86.984

17 .514 2.235 89.219

18 .468 2.033 91.252

19 .457 1.988 93.240

20 .446 1.941 95.181

21 .411 1.788 96.969

22 .368 1.599 98.568

23 .329 1.432 100.000

SOURCE: SPSS Output

* Extraction Method: Principal Axis Factoring

From TABLE 7.7 it now becomes evident that five initial Eigenvalues are greater than 1

(i.e. 6.457; 1.552; 1.273; 1.251; and 1.089), which means that five factors can be

identified and used in the analysis. These five values explain 50.53% of the

information in the original 23 items and for the purposes of this analysis this is

acceptable.

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CHAPTER 7 256

TABLE 7.8 (below) indicates the rotated factor matrix for the second round of factor

analysis with the various items belonging to each of the five factors and the rotated

loading (weight) on each item. The highest loading for each item is shown in bold.

Where loading was negligible (i.e. < 0.1), no value is given. It therefore means that

item U22, for example, has a loading of 0.761 on factor 1 whilst the loading on factor 5

is negligible.

TABLE 7.8: Rotated Factor Matrix(a) (Section B1)

Factor Item

1 2 3 4 5

U22: The education of CAs should enable them to adapt to

change. .761 .142 .235 .114

U23: The education of CAs should provide a foundation of

various professional skills. .632 .160 .237 .201 .103

U21: In addition to acquiring theoretical knowledge and skills,

today's CAs need other skills. .551 .129 .138 .175

U5: CAs should continually adapt to change. .427 .284 .329

U17: Competency is a critical issue in the CA’s profession. .373 .262 .152 .159

U25: CAs are continuously challenged to maintain

competence. .352 .116 .159 .339 .197

U9: CAs should act in accordance with applicable

professional ethical standards. .634 .184 .173

U4: CAs should have high ethical standards. .633 .189 .122

U7: CAs have an ethical obligation to their clients, employers

and stakeholders. .234 .629 .115


ethical values. .162 .475 .297 .121

U20: The competency of CAs also includes their professional

values, ethics and attitudes. .254 .327 .207 .164 .219

U12: The education of CAs should cultivate a culture of LLL. .251 .146 .618 .149 .130

U1: CAs should learn continuously. .162 .128 .564

U3: A CA will be able to focus on continued learning

throughout his/her career if he/she has learnt how to do

this as part of his/her basic training.

.231 .174 .486 .198 .120

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CHAPTER 7 257

Factor Item

1 2 3 4 5

U2: Training programmes for CAs should follow an

integrated approach with regard to professional ethics,

values and attitudes.

.144 .336 .449 .236 .207

U13: The credibility of a CA depends on his/her ethical

approach to the work he/she does. .283 .391 .216 .265

U10: A training programme for CAs should be more than a

mere transfer of knowledge. .172 .216 .251

U24: CAs enable organisations to shape their financial future. .426 .479 .114

U11: A professional CA is the same as an ethical CA. .270 .416

U8: CAs should be regarded as professionals once they have

completed the required basic training. .166 .382 .115

U18: CAs are trusted professionals. .236 .207 .377

U15: The teaching of professional values and ethics at an

undergraduate level should be seen as a process rather

than a course.

.167 .123 .180 .663

U16: The education of CAs should provide a basic general

foundation of knowledge. .226 .171 .308

SOURCE: SPSS Output

Extraction Method: Principal Axis Factoring

Rotation Method: Varimax with Kaiser Normalization (a) Rotation converged in 6 iterations

As was pointed out earlier, factor analysis aims to reduce the number of items. Based

on the factor analysis just completed, TABLE 7.8 above shows that five factors were

extracted. Factor 1 consists of items U22, U23, U21, U5, U17 and U25; Factor 2

consists of items U9, U4, U7, U6, and U20; Factor 3 consists of items U12, U1, U3, U2,

U13 and U10; and Factor 4 consists of items U24, U11, U8 and U18.

As Factor 5 only consisted of two items (i.e. U15 and U16), no further analysis was

warranted.

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CHAPTER 7 258

7.3.4 Item analysis

7.3.4.1 Factor 1: CmpSkll

In the previous section, items making up a factor with the highest loading on that

specific factor were calculated. As was pointed out in Chapter 6, one performs an item

analysis in order to determine the extent to which the items are collectively correlated

with the scale. Factor 1 can be described as competency and professional skills of

CAs necessary in a period of change (hereafter CmpSkll).

The following items were found to have the highest loading on CmpSkll in the order of

loading:

U22 The education of CAs should enable them to adapt to change.

U23 The education of CAs should provide a foundation of various professional

skills.

U21 In addition to acquiring theoretical knowledge and skills, today's CAs

need other skills.

U5 CAs should continually adapt to change.

U17 Competency is a critical issue in the CA’s profession.

U25 CAs are continuously challenged to maintain competence.

A standardised Cronbach’s alpha (α) of 0.779 was generated, indicating a good level of

internal consistency of the data, since 0.779 > 0.7.

TABLE 7.9 (on the following page) provides an overview of the item statistics (in mean

ascending order) and indicates the mean, standard deviation and number of

respondents for each of the items included in the scale.

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CHAPTER 7 259

TABLE 7.9: Item statistics – Factor 1 (CmpSkll)

Items Mean Standard deviation N

U17: Competency is a critical issue in the CA’s profession. 1.37 .521 487

U21: In addition to acquiring theoretical knowledge and

skills, today's CAs need other skills. 1.38 .520 487

U5: CAs should continually adapt to change. 1.39 .518 487


various professional skills. 1.45 .519 487

U22: The education of CAs should enable them to adapt to

change. 1.46 .531 487

U25: CAs are continuously challenged to maintain

competence. 1.50 .573 487

SOURCE: SPSS Output

TABLE 7.10 (below) is an indication of the item-total statistics. Important here is the

column indicating the adjusted Cronbach’s alpha (α) if an item is to be deleted from the

scale. From this table one notices that if item U5, for example, was deleted, α would

have been 0.716. A standardised Cronbach’s alpha was however calculated at 0.779; it

would not have increased it at all. None of these items had to be deleted as they would

not have increased the value of Cronbach’s alpha.

TABLE 7.10: Item-total statistics – Factor 1 (CmpSkll)

Item Scale

Mean if Item

Deleted

Scale Variance if Item Deleted

Corrected Item-Total Correlation

Cronbach's Alpha if

Item Deleted

U5: CAs should continually adapt to change. 7.17 3.574 .497 .753

U17: Competency is a critical issue in the CA’s

profession. 7.19 3.633 .458 .762

U21: In addition to acquiring theoretical

knowledge and skills, today's CAs need

other skills.

7.18 3.568 .497 .753

U22: The education of CAs should enable

them to adapt to change. 7.11 3.248 .672 .709

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CHAPTER 7 260

Item Scale

Mean if Item

Deleted

Scale Variance if Item Deleted


Cronbach's Alpha if

Item Deleted

U23: The education of CAs should provide a

foundation of various professional skills. 7.11 3.379 .612 .725

U25: CAs are continuously challenged to

maintain competence. 7.06 3.544 .436 .770

SOURCE: SPSS Output

7.3.4.2 Factor 2: Ethcs

Factor 2 can be described as professional values, ethics and attitudes linked to

CAs (hereafter Ethcs). The following items were found to have the highest loading on

Factor 2 in order of loading:

U9 CAs should act in accordance with applicable professional ethical

standards.

U4 CAs should have high ethical standards.

U7 CAs have an ethical obligation to their clients, employers and

stakeholders.

U6 The education of CAs should provide a foundation of ethical values.

U20 The competency of CAs also includes their professional values, ethics and

attitudes.


internal consistency of the data, since 0.727 > 0.7. TABLE 7.11 (below) provides an

overview of the item statistics and indicates the mean, standard deviation and number

of respondents for each of the items included in the scale in ascending mean order.

TABLE 7.11: Item statistics – Factor 2 (Ethcs)


U4: CAs should have high ethical standards. 1.17 .395 491

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CHAPTER 7 261


U7: CAs have an ethical obligation to their clients,

employers and stakeholders. 1.19 .406 491

U9: CAs should act in accordance with applicable

professional ethical standards. 1.24 .430 491


ethical values. 1.46 .589 491

U20: The competency of CAs also includes their professional

values, ethics and attitudes. 1.54 .557 491

SOURCE: SPSS Output

Based on the analysis of the item total statistics (TABLE 7.12), none of these items

need to be deleted as they will not increase the value of Cronbach’s alpha significantly.

TABLE 7.12: Item-total statistics – Factor 2 (Ethcs)

Item Scale Mean

if Item Deleted

Scale Variance if

Item Deleted


Cronbach's Alpha if

Item Deleted

U4: CAs should have high ethical

standards. 5.43 2.017 .540 .668

U6: The education of CAs should

provide a foundation of ethical

values.

5.14 1.686 .487 .688

U7: CAs have an ethical obligation to

their clients, employers and

stakeholders.

5.42 1.987 .548 .663

U9: CAs should act in accordance with

applicable professional ethical

standards.

5.36 1.962 .524 .669

U20: The competency of CAs also

includes their professional values,

ethics and attitudes.

5.07 1.846 .410 .718

SOURCE: SPSS Output

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CHAPTER 7 262

7.3.4.3 Factor 3: EdcTrn

Factor 3 can be described as training, education and LLL of CAs (hereafter

EdcTrn). The following items were found to have the highest loading on Factor 3 in

the order of loading:

U12 The education of CAs should cultivate a culture of LLL.

U1 CAs should learn continuously.

U3 A CA will be able to focus on continued learning throughout his/her

career if he/she has learnt how to do this as part of his/her basic training.

U2 Training programmes for CAs should follow an integrated approach with

regard to professional ethics, values and attitudes.

U13 The credibility of a CA depends on his/her ethical approach to the work

he/she does.

U10 A training programme for CAs should be more than a mere transfer of

knowledge.


internal consistency of the data, since 0.738 > 0.7. TABLE 7.13 (below) provides an

overview of the item statistics and indicates the mean, standard deviation and number

of respondents for each of the items included in the scale in ascending mean order.

TABLE 7.13: Item statistics – Factor 3 (EdcTrn)


U10: A training programme for CAs should be more than a

mere transfer of knowledge. 1.39 .569 490

U1: CAs should learn continuously. 1.42 .557 490

U2: Training programmes for CAs should follow an

integrated approach with regard to professional ethics,

values and attitudes.

1.49 .516 490

U13: The credibility of a CA depends on his/her ethical

approach to the work he/she does. 1.51 .597 490

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CHAPTER 7 263


U3: A CA will be able to focus on continued learning

throughout his/her career if he/she has learnt how to

do this as part of his/her basic training.

1.60 .629 490

U12: The education of CAs should cultivate a culture of LLL. 1.70 .585 490

SOURCE: SPSS Output

Based on the analysis of the item total statistics (TABLE 7.14), by deleting item U10 (a

training programme for CAs should be more than a mere transfer of knowledge) it will

be possible to increase the value of Cronbach’s alpha to 0.747. Because this item fits

perfectly into the scale of training, education and LLL of CAs (i.e. face validity) it was

decided that it would not be deleted.

TABLE 7.14: Item-total statistics – Factor 3 (EdcTrn)

Item Scale Mean

if Item Deleted

Scale Variance if

Item Deleted


Cronbach's Alpha if

Item Deleted

U1: CAs should learn continuously. 7.69 3.831 .474 .701

U2: Training programmes for CAs

should follow an integrated

approach with regard to

professional ethics, values and

attitudes.

7.62 3.863 .515 .691

U3: A CA will be able to focus on

continued learning throughout

his/her career if he/she has learnt

how to do this as part of his/her

basic training.

7.51 3.543 .522 .686

U10: A training programme for CAs

should be more than a mere

transfer of knowledge.

7.72 4.151 .302 .747

U12: The education of CAs should

cultivate a culture of LLL. 7.41 3.560 .576 .670

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CHAPTER 7 264

Item Scale Mean

if Item Deleted

Scale Variance if

Item Deleted


Cronbach's Alpha if

Item Deleted

U13: The credibility of a CA depends on

his/her ethical approach to the

work he/she does.

7.60 3.742 .465 .703

SOURCE: SPSS Output

7.3.4.4 Factor 4: CmpPrf

Factor 4 can be described as competence and professionalism of CAs (hereafter

CmpPrf). The following statements were found to have the highest loading on Factor

4 in the order of loading:

U24 CAs enable organisations to shape their financial future.

U11 A professional CA is the same as an ethical CA.

U8 CAs should be regarded as professionals once they have completed the

required basic training.

U18 CAs are trusted professionals.

A standardised Cronbach’s alpha (α) of 0.491 was generated, indicating a level of

internal consistency lower than 0.7. Based on the analysis of the item total statistics in

TABLE 7.15 below, it clearly would not be possible to increase the value of Cronbach’s

alpha significantly by deleting any of the items. No further analysis was therefore

warranted.

TABLE 7.15: Item-total statistics – Factor 4 (CmpPrf)

Item Scale Mean

if Item Deleted

Scale Variance if

Item Deleted


Cronbach's Alpha if

Item Deleted

U8: CAs should be regarded as

professionals once they have

completed the required basic training.

5.24 2.340 .279 .426

U11: A professional CA is the same as an

ethical CA. 4.74 1.933 .260 .471

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CHAPTER 7 265

Item Scale Mean

if Item Deleted

Scale Variance if

Item Deleted


Cronbach's Alpha if

Item Deleted

U18: CAs are trusted professionals. 5.31 2.339 .325 .389

U24: CAs enable organisations to shape their

financial future. 5.28 2.530 .319 .405

SOURCE: SPSS Output

7.3.5 Factor scores

7.3.5.1 Calculation

In the previous section, three factors with a level of internal consistency (Cronbach’s

alpha) greater than 0.7 were extracted and explained. In order to calculate the factor

scores, i.e. the average score for each respondent for each of the factors, one

calculates the average (mean) response for each respondent (see section 6.5.4).

The mean response of competency and professional skills of CAs necessary in a

period of change is calculated using the formula:

625175212322 UUUUUUCpmSkll +++++

=

The mean response of professional values, ethics and attitudes linked to CAs is

calculated using the formula:

5206749 UUUUUEthcs ++++

=

The mean response of training, education and LLL of CAs is calculated using the

formula:

6101323112 UUUUUUEdcTrn +++++

=

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CHAPTER 7 266

7.3.5.2 Interpreting factor scores

TABLE 7.16 indicates the calculated descriptive statistics of the various factor scores

after using the formulae indicated in the section above.

TABLE 7.16: Descriptive statistics summary (Factor scores: Section B1)

N Minimum Maximum Mean Standard deviation

Factor 1: CmpSkll 491 1.00 2.33 1.4268 .36502

Factor 2: Ethcs 491 1.00 2.60 1.3210 .33336

Factor 3: EdcTrn 491 1.00 2.83 1.5173 .37944

SOURCE: TABLE D4

Respondents had to indicate their response using a 4-point Likert scale. Based on the

above analysis, the minimum score for all factors was 1 (strongly agree). In terms of

the maximum scores, respondents tended to disagree with the statements as maximum

scores between 2.33 and 2.83 were recorded.

a) Factor 1: CmpSkll

In terms of CmpSkll, respondents were split nearly halfway between strongly agree

and agree with a mean response of 1.4268 (SD = 0.36502) with items such as:

CAs should be regarded as professionals once they have completed the required

basic training; and

CAs are continuously challenged to maintain competence.

A word of caution: respondents also fairly strongly agreed that a professional CA is the

same as an ethical CA (which was also pointed out in the descriptive analysis earlier in

sections 7.3.1 and 7.3.2.1). In the same vein they also generally agreed that CAs are

trusted professionals.

In Chapter 4 (section 4.4.3.3) it was indicated that there are various shared perceptions

as to the meaning of ethical and/or professional behaviour. It was noted that the CA

Empirical analysis

CHAPTER 7 267

operating in a professional environment has to apply both general ethics (the spirit) and

professional ethics (the rules) of the profession. To therefore state that a professional

CA is also an ethical CA may not be correct.

Graphically represented in FIGURE 7.5, the factor CmpSkll has a fairly flat or

platykurtic distribution (i.e. kurtosis = -1.169; kurtosis < 0). In a normal symmetric

distribution, one would find that kurtosis tend to be equal to zero (see section 6.5.1.3).

0

20

40

60

80

100

120

140

1.0 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.8 1.9 2.0 2.1 2.2 2.3

Freq

uenc

y

FIGURE 7.5: Histogram and distribution of Factor 1 (CmpSkll)

SOURCE: SPSS Output

From FIGURE 7.5, the factor CmpSkll is positively skewed with skewness values

equal to 0.365. This may also indicate why the mean score (1.4268) is greater than the

median score (1.3333) (see section 6.5.1.2).

Within the frequency distribution, 123 respondents (25.1%) responded with a mean

score of 1 (i.e. ‘strongly agree’) and 53.6% of the respondents were all above a mean

score of 1.5.

b) Factor 2: Ethcs

In terms of the factor Ethcs, respondents strongly agreed that CAs:

Empirical analysis

CHAPTER 7 268

should act in accordance with applicable professional ethical standards;

have an ethical obligation to their clients, employers and stakeholders; and

have high ethical standards.

0

20

40

60

80

100

120

140

160

180

1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 2.0 2.1 2.2 2.3 2.4 2.5

Freq

uenc

y

FIGURE 7.6: Histogram and distribution of Factor 2 (Ethcs)

SOURCE: SPSS Output

Graphically represented in FIGURE 7.6, the factor Ethcs has a fairly peaked or

leptokurtic distribution (i.e. kurtosis = 0.306; kurtosis > 0) and is positively skewed

(skewness = 1.003), which may indicate why the mean score (1.3210) is greater than

the median score (1.2000). Less than 85% (417) of the respondents all gave a

response of less than a mean score of 1.6, with 162 respondents (33%) affirming their

response as ‘strongly agree’. The issue of ethics and the professional CA was also

discussed in great detail in sections 7.3.2.1 and 7.3.2.2.

c) Factor 3: EdcTrn

When it came to statements on education, training and LLL (EdcTrn), respondents

indicated a mean score of 1.5173 (strongly agree but leaning more perhaps to agree)

Empirical analysis

CHAPTER 7 269

and a standard deviation of 0.37944 on statements that:

the education of CAs should cultivate a culture of LLL;

CAs should learn continuously;

a CA will be able to focus on continuous learning throughout his/her career if

he/she has learnt how to do this as part of his/her basic training; and

a training programme for CAs should be more than a mere transfer of

knowledge.

0

10

20

30

40

50

60

70

80

90

1.1 1.2 1.3 1.4 1.5 1.7 1.8 1.9 2.0 2.2 2.3 2.4 2.5 2.6 2.8

Freq

uenc

y

FIGURE 7.7: Histogram and distribution of Factor 3 (EdcTrn)

SOURCE: SPSS Output

In FIGURE 7.7 above, the factor EdcTrn is positively skewed (0.401) but has a

platykurtic distribution with kurtosis less than zero (-0.344).

In contrast to the first two factors, 93.9% or 461 respondents were between mean

scores of 1 and 2 (i.e. ‘strongly agree’ or ‘agree’) with their responses. This was lower

as one finds that in the case of the first factor (CmpSkll) some 481 respondents or

98% were above a mean score of 2 (i.e. ‘agree’) and in the case of the second factor

Ethcs, this figure went up to 98.6% or 484 respondents.

Empirical analysis

CHAPTER 7 270

7.3.6 Hypothesis testing

In the previous section of this chapter, the average means of the three factors were

calculated. The question now arises as to whether the means calculated for each factor

differ on a gender basis. An appropriate hypothesis test to use in this case would be

the t-test for independent samples. The null and alternative hypotheses developed are:

Hypothesis 1:

H0: There is no difference between prospective male and female CAs in the

perceived need for competency and professional skills in a period of

change.

H1: There is a difference between prospective male and female CAs in the

perceived need for competency and professional skills in a period of

change.

Hypothesis 2:

H0: There is no difference in the perceptions of values, ethics and attitudes

for prospective male and female CAs.

H1: There is a difference in the perceptions of values, ethics and attitudes


Hypothesis 3:

H0: There is no difference in the perceptions of training, education and LLL


H1: There is a difference in the perceptions of training, education and LLL


Using an independent t-test, the following results are presented in TABLE 7.17 (below)

and TABLE 7.18 (on the following page).

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CHAPTER 7 271

7.3.6.1 Factor 1: CmpSkll

In performing an independent samples test, a t-value of 0.001 was calculated with p =

0.999. Because p > 0.05 (0.999 > 0.05), it means the null hypothesis will not be

rejected as there is no statistically significant difference in the perceptions of the need

for competency and professional skills between prospective male and female CAs in a

period of change.

TABLE 7.17: Independent Samples t-Test (Factors: Section B1)

Levene's Test for Equality of Variances

t-test for Equality of Means

95% confidence interval of the

difference

Factors

F Sig. t df Sig. (2-tailed)

Lower Upper

CmpSkll Equal variances

assumed .278 .598 .001 489 .999 -.06478 .06484

Ethcs Equal variances

assumed 3.077 .080 2.297 489 .022* .00994 .12769

EdcTrn Equal variances

assumed 2.277 .132 2.309 489 .021* .01173 .14574

SOURCE: SPSS Output

* p < 05

This is also proven when one compares the means of male and female respondents and

finds that they are exactly the same (1.4268) but with different standard deviations

(Male SD = 0.35992; Female SD = 0.37058) in TABLE 7.18 on the following page.

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CHAPTER 7 272

TABLE 7.18: Group statistics (Factors: Section B1)

Factor Gender N Mean Standard deviation

Standard error of mean

Male 241 1.4268 .35992 .02318 Factor 1:

CmpSkll Female 250 1.4268 .37058 .02344

Male 241 1.3560 .35434 .02283 Factor 2:

Ethcs Female 250 1.2872 .30877 .01953

Male 241 1.5574 .39593 .02550 Factor 3:

EdcTrn Female 250 1.4787 .35941 .02273

SOURCE: SPSS Output

7.3.6.2 Factor 2: Ethcs

For factor 2 (Ethcs) a t-value of 2.297 was calculated with p = 0.022 (see TABLE 7.17

on the previous page). As p < 0.05 (0.022 < 0.05), there is a statistically significant

difference in the perceptions of values, ethics and attitudes for prospective male and

female CAs and one would therefore reject the null hypothesis.

This can again be verified when the data in TABLE 7.18 (above) is compared, where

the mean score for male respondents is 1.3579 (SD = 0.35434) compared to the mean

score for female respondents of 1.2872 (SD = 0.30877).

7.3.6.3 Factor 3: EdcTrn

In the calculation of an independent samples test for factor 3 (EdcTrn), a t-value of

2.309 was calculated with p = 0.021 (see TABLE 7.17 on the previous page). Because

p < 0.05 (0.021 < 0.05), it means that there is a statistically significant difference in the

perceptions of training, education and LLL for prospective male and female CAs and the

null hypothesis would be rejected.

Empirical analysis

CHAPTER 7 273

7.4 CONTINUOUS PROFESSIONAL DEVELOPMENT OF CHARTERED ACCOUNTANTS


Section B2 contained 14 items (V1 – V14) about the continuous professional

development of CAs. All the data collected from the questionnaires with regard to this

section, has been analysed and is described in detail in TABLE E1 (in APPENDIX E) of

this study.

TABLE E2 (in APPENDIX E) provides a single, collated frequency tabulation of all the


deviation to the items are provided in TABLE 7.19 below:

TABLE 7.19: Continuous professional development of chartered accountants


V1: The CPD of CAs is critical. 1.41 0.512

V7: CPD must be a requirement for all CAs in order to maintain the public’s

confidence in the profession. 1.57 0.554

V5: The benefits derived from CPD programmes depend on the attitude of

the CA. 1.58 0.595

V12: CPD is aimed at the post-qualification maintenance of professional

competence. 1.63 0.580

V14: CPD should be seen as an extension of the education process that

leads to the initial qualification as a CA. 1.69 0.574

V8: CPD should be a condition of a CA’s continued membership of a

professional body. 1.70 0.670

V3: CPD provides an assurance of professional service. 1.71 0.622

V10: The emphasis of CPD means a foundation for LLL. 1.72 0.557

V9: CPD refers to learning activities following qualification. 1.76 0.578

V2: Recent corporate collapses (e.g. Enron) can be attributed to the

unethical behaviour of CAs. 1.79 0.773

Empirical analysis

CHAPTER 7 274


V11: CPD implies further training in professional values, ethics and

attitudes. 1.83 0.656

V13: A training programme for CAs should provide students with the

necessary skills to learn by themselves and at their own pace. 1.88 0.765

V6: CPD means realigning one’s professional values and attitudes. 1.90 0.668

V4: The CPD of CAs will avert corporate collapses. 2.16 0.731

SOURCE: SPSS Output

Thirteen of the fourteen statements (i.e. 92.86%) all scored a mean response of less

than 2 (i.e. ‘agree’) which indicates that respondents were fairly adamant that they

strongly agreed (i.e. 1) with the statements given. In contrast to the results for

Section B1, this section (Section B2) of the questionnaire produced mean responses

all lower than median responses, with the exception of items V1 and V4 (see FIGURE

7.8 below).

0

0.5

1

1.5

2

2.5

3

3.5

4

V1 V2 V3 V4 V5 V6 V7 V8 V9 V10 V11 V12 V13 V14

Rep

onse

s (L

iker

t-sca

le)

Median Mean FIGURE 7.8: Mean and median distribution for the continuous professional

development of chartered accountants (n = 491)

SOURCE: TABLE E1

Empirical analysis

CHAPTER 7 275

Only the mean response of item V1 (1.41; SD = 0.512) was below the 1.5 range

indicating a very strong agreement that CPD of CAs is very important. With that said,

respondents also agreed that CPD is not the cure for all ills, as they have indicated a

mean response of 2.16 (SD = 0.731) for item V4.


analysis

7.4.2.1 Ethics and corporate collapses

In item V2 (TABLE 7.20a) it was interesting to note that respondents felt a lack of

ethical behaviour was not the only contributing factor in some of the most recent

corporate collapses worldwide.

TABLE 7.20a: Descriptive analysis: Item V2 (Section B2)

RESPONSE f %


Agree (2) 215 43.9



Recent corporate collapses (e.g. Enron)

can be attributed to the unethical

behaviour of CAs.

TOTAL 490 100.0

SOURCE: TABLE E2

Nonetheless, the fact that nearly 84% agreed (i.e. either ‘strongly agree’ or ‘agree’)

with this statement means that they do attribute some of the blame to a lack of ethical

behaviour.

In item V4 (TABLE 7.20b) close to 70% of the respondents felt that utilising CPD for

CAs would make it possible to avert corporate collapses.

Empirical analysis

CHAPTER 7 276

TABLE 7.20b: Descriptive analysis: Item V4 (Section B2)

RESPONSE f %


Agree (2) 258 52.8

Disagree (3) 133 27.2


The continuous professional development

of CAs will avert corporate collapses.

TOTAL 489 100.0

SOURCE: TABLE E2

This is not possible, however, as some executives will, even whilst regarding

themselves as ethical, still be adamant that the ‘bottom line’ of profit needs to be the

be-all and end-all of business. This flawed understanding of corporate behaviour was

discussed in detail in section 4.5.4 of this study. Another reason for this response may

be the lack of experience within a practice.

7.4.2.2 Continuous professional development requirement for CAs

Even though 97.3% of the respondents felt that CPD should be a requirement for all

CAs (item V7, TABLE 7.21a below) and 90.0% felt that CPD should be a condition of a

CA’s continued membership of a professional body (item V8, TABLE 7.21b on the

following page), it does not necessarily mean that it will improve the public’s confidence

in CAs in general following a succession of high profile corporate scandals (see section

4.5.2).


RESPONSE f %


Agree (2) 252 51.4

Disagree (3) 12 2.4


CPD must be a requirement for all CAs

in order to maintain the public’s

confidence in the profession.

TOTAL 490 100.0

SOURCE: TABLE E2

Empirical analysis

CHAPTER 7 277


RESPONSE f %


Agree (2) 241 49.2

Disagree (3) 43 8.8


CPD should be a condition of a CA’s

continued membership of a

professional body.

TOTAL 490 100.0

SOURCE: TABLE E2

7.4.2.3 Teaching the skills of CPD

In the previous two sections it was noted how strongly respondents agreed (i.e. either

‘strongly agree’ or ‘agree’) on the importance of CPD. It was however not comforting to

notice (item V13, TABLE 7.22a below) that more than one-fifth of respondents did not

feel that they should be taught the necessary skills to engage in CPD within their

training programme (undergraduate studies).


RESPONSE f %


Agree (2) 217 44.4



CPD must be a requirement for all CAs

in order to maintain the public’s


TOTAL 490 100.0

SOURCE: TABLE E2

This again then stands in sharp contrast to the following statement (i.e. item V14 in

TABLE 7.22b on the following page), which clearly indicated 94.3% of the respondents

agreeing (i.e. either ‘strongly agree’ or ‘agree’) that CPD should be seen as an extension

of the process of getting to be a qualified CA.

Empirical analysis

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RESPONSE f %


Agree (2) 280 57.5

Disagree (3) 28 5.7


CPD should be seen as an extension of

the education process that led to the

initial qualification as a CA.

TOTAL 487 100.0

SOURCE: TABLE E2

As was pointed out in section 7.4.1, this set of items in Section B consists of 14

different categorical items. In order to reduce the large number of items to a smaller

number that may give meaning to the analysis, one employs factor analysis to

determine the underlying dimensions of the various attitudes emerging in the data.

7.4.3 Factor analysis of the items measuring the need for

continuous professional development of chartered

accountants

Exploratory factor analysis was performed on the statements in Section B2 for the

complete sample (n = 491) using SPSS with orthogonal varimax rotation and Kaizer

normalisation to identify the various dimensions of CPD of CAs by way of Principal Axis

Factoring as an extraction method.

TABLE 7.23: KMO and Bartlett's Test (Section B2)




Significance .000

SOURCE: SPSS Output

The KMO value was 0.880 and Bartlett’s Test reached statistical significance (p < 0.05),

supporting the factorability of the correlation matrix (see TABLE 7.23 above).

Principal Axis Factoring revealed the presence of three components with initial

Empirical analysis

CHAPTER 7 279

Eigenvalues exceeding 1 and cumulatively explaining 33.88%, 42.87% and 51.04% of

the variances respectively.


Factor Item

1 2 3

V10: The emphasis of CPD means a foundation for LLL. .641 .313 .231

V14: CPD should be seen as an extension of the education process that

leads to the initial qualification as a CA. .598 .228 .113

V9: CPD refers to learning activities following qualification. .531 .346 .149

V12: CPD is aimed at the post-qualification maintenance of professional

competence. .502 .288

V11: CPD implies further training in professional values, ethics and

attitudes. .490 .185 .370

V5: The benefits derived from CPD programmes depend on the attitude

of the CA. .403 .197 .146

V13: A training programme for CAs should provide students with the

necessary skills to learn by themselves and at their own pace. .387 .112

V8: CPD should be a condition of a CA’s continued membership of a

professional body. .198 .745 .146

V7: CPD must be a requirement for all CAs in order to maintain the

public’s confidence in the profession. .275 .693 .166

V1: The CPD of CAs is critical. .291 .413 .185

V3: CPD provides an assurance of professional service. .217 .328 .312

V4: The CPD of CAs will avert corporate collapses. .305 .636

V6: CPD means realigning one’s professional values and attitudes. .346 .200 .505

V2: Recent corporate collapses (e.g. Enron) can be attributed to the

unethical behaviour of CAs. .412

SOURCE: SPSS Output



Even though the individual percentage variance explained by factors 2 and 3 were very

low (i.e. 8.997% and 8.170%), it was decided that further tests would still be

Empirical analysis

CHAPTER 7 280

undertaken on these irrespective of the low percentages so as to include as many

individual items as possible. In TABLE 7.24 (on the previous page), the three

components (or factors) that were retained for further analysis are indicated.

7.4.4 Item analysis

7.4.4.1 Factor 1: LrnCPD

Factor 1 can be described as education and pursuance of continuous

professional development of chartered accountants (hereafter LrnCPD). The

following statements were found to have the highest loading on LrnCPD in the order of

loading:

V10 The emphasis of CPD means a foundation for LLL.

V14 CPD should be seen as an extension of the education process that leads

to the initial qualification as a CA.

V9 CPD refers to learning activities following qualification.

V12 CPD is aimed at the post-qualification maintenance of professional

competence.

V11 CPD implies further training in professional values, ethics and attitudes.

V5 The benefits derived from CPD programmes depend on the attitude of the

CA.

V13 A training programme for CAs should provide students with the necessary

skills to learn by themselves and at their own pace.



TABLE 7.25 (on the following page) provides an overview of the item statistics and

indicates the mean score, standard deviation and number of respondents for each of

the items included in the scale in ascending mean order.

Empirical analysis

CHAPTER 7 281

TABLE 7.25: Item statistics – Factor 1 (LrnCPD)


V5: The benefits derived from CPD programmes depend

on the attitude of the CA. 1.57 .594 484

V12: CPD is aimed at the post-qualification maintenance of

professional competence. 1.63 .581 484

V14: CPD should be seen as an extension of the education

process that leads to the initial qualification as a CA. 1.69 .572 484

V10: The emphasis of CPD means a foundation for LLL. 1.72 .557 484

V9: CPD refers to learning activities following qualification. 1.76 .580 484

V11: CPD implies further training in professional values,

ethics and attitudes. 1.83 .655 484

V13: A training programme for CAs should provide students

with the necessary skills to learn by themselves and at

their own pace.

1.87 .763 484

SOURCE: SPSS Output

Based on the analysis of the item total statistics (see TABLE 7.26 below), none of

these items need to be deleted as they will not increase the value of Cronbach’s alpha

significantly.

TABLE 7.26: Item-total statistics – Factor 1 (LrnCPD)

Item Scale Mean

if Item Deleted

Scale Variance if

Item Deleted


Cronbach's Alpha if

Item Deleted

V5: The benefits derived from CPD

programmes depend on the

attitude of the CA.

10.50 6.155 .397 .747

V9: CPD refers to learning activities

following qualification. 10.31 5.801 .550 .716

V10: The emphasis of CPD means a

foundation for LLL. 10.35 5.686 .633 .701

Empirical analysis

CHAPTER 7 282

Item Scale Mean

if Item Deleted

Scale Variance if

Item Deleted


Cronbach's Alpha if

Item Deleted

V11: CPD implies further training in

professional values, ethics and

attitudes.

10.24 5.709 .491 .728

V12: CPD is aimed at the post-

qualification maintenance of

professional competence.

10.44 5.982 .478 .731

V13: A training programme for CAs

should provide students with the

necessary skills to learn by

themselves and at their own pace.

10.20 5.897 .323 .774

V14: CPD should be seen as an

extension of the education process

that leads to the initial qualification

as a CA.

10.38 5.827 .552 .716

SOURCE: SPSS Output

7.4.4.2 Factor 2: CrtCPD

Factor 2 can be described as critical importance of continuous professional

development for chartered accountants (hereafter CrtCPD). The following

statements were found to have the highest loading on CrtCPD in the order of loading:

V8 CPD should be a condition of a CA’s continued membership of a

professional body.

V7 CPD must be a requirement for all CAs in order to maintain the public’s


V1 The CPD of CAs is critical.

V3 CPD provides an assurance of professional service.



Empirical analysis

CHAPTER 7 283

TABLE 7.27 provides an overview of the item statistics and indicates the mean score,

standard deviation and number of respondents for each of the items included in the

scale in ascending mean order.

TABLE 7.27: Item statistics – Factor 2 (CrtCPD)


V1: The CPD of CAs is critical. 1.41 .513 487

V7: CPD must be a requirement for all CAs in order to

maintain the public’s confidence in the profession. 1.57 .554 487

V8: CPD should be a condition of a CA’s continued

membership of a professional body. 1.70 .671 487

V3: CPD provides an assurance of professional service. 1.71 .620 487

SOURCE: SPSS Output

As is pointed out in TABLE 7.28 below, an analysis indicated that by deleting item V3 it

would be possible to increase Cronbach’s alpha to 0.726. For the purposes of this

analysis it was decided against it, as it dealt with the professional services of a CA and

as much information needed to be extracted as this is seen as exploratory research.

TABLE 7.28: Item-total statistics – Factor 2 (CrtCPD)

Item Scale Mean

if Item Deleted

Scale Variance if

Item Deleted


Cronbach's Alpha if

Item Deleted

V1: The CPD of CAs is critical. 4.98 2.078 .451 .676

V3: CPD provides an assurance of

professional service. 4.68 1.976 .370 .726

V7: CPD must be a requirement for all

CAs in order to maintain the

public’s confidence in the

profession.

4.81 1.798 .606 .585

V8: CPD should be a condition of a CA’s

continued membership of a

professional body.

4.69 1.566 .590 .585

SOURCE: SPSS Output

Empirical analysis

CHAPTER 7 284

7.4.4.3 Factor 3: ValCPD

Factor 3 can be described as professional values and attitudes pertaining to

continuous professional development for chartered accountants (hereafter

ValCPD). The following statements were found to have the highest loading on

ValCPD in the order of loading:

V4 The CPD of CAs will avert corporate collapses.

V6 CPD means realigning one’s professional values and attitudes.

V2 Recent corporate collapses (e.g. Enron) can be attributed to the unethical

behaviour of CAs.

A standardised Cronbach’s alpha (α) of 0.546 was generated, indicating a low level of

internal consistency (0.546 < 0.7) and no further analysis was therefore warranted.

7.4.5 Factor scores

7.4.5.1 Calculation

The mean response of education and pursuance of continuous professional

development of chartered accountants is calculated using the formula:

7135111291410 VVVVVVVLrnCPD ++++++

=

The mean response of critical importance of continuous professional

development for chartered accountants is calculated using the formula:

43178 VVVVCrtCPD +++

=


TABLE 7.29 (on the following page) indicates the calculated descriptive statistics of the

various factor scores.

Empirical analysis

CHAPTER 7 285

TABLE 7.29: Descriptive statistics summary (Factor scores: Section B2)


Factor 1: LrnCPD 490 1.00 3.29 1.7257 .39642

Factor 2: CrtCPD 491 1.00 3.00 1.5959 .43244

SOURCE: TABLE E3

Students had to respond to the questionnaire using a 4-point Likert scale. Based on the

above analysis, the minimums score in all factors were 1 (strongly agree).

In terms of the maximum scores respondents disagreed (i.e. a maximum mean

response of 3) with statements relating to the factor CrtCPD but tended to strongly

disagree (i.e. mean responses higher than 3) with statements included in the factor

LrnCPD.

a) Factor 1: LrnCPD

In terms of LrnCPD, respondents on average (mean = 1.7257; SD = 0.39642) only

agreed (i.e. Likert scale response below 2) with statements dealing with CPD but linked

with LLL.

Three statements were not specifically related to educating for and learning of CPD for

CAs but rather applicable to CPD, per se. They were still included, however:

CPD implies further training in professional values, ethics and attitudes;

the benefits derived from CPD programmes depend on the attitude of the CA;

and

a training programme for CAs should provide students with the necessary skills

to learn by themselves and at their own pace.

What is interesting from FIGURE 7.9 (on the following page) is that only 103 or 21%

of the respondents specifically chose a Likert-scale response of 2 (i.e. ‘agree’).

Empirical analysis

CHAPTER 7 286

0

20

40

60

80

100

120

1.1 1.2 1.4 1.5 1.7 1.8 2.0 2.1 2.3 2.5 2.6 2.8 2.9 3.1 3.2

Freq

uenc

y

FIGURE 7.9: Histogram and distribution of Factor 1 (LrnCPD)

SOURCE: SPSS Output

b) Factor 2: CrtCPD

The second factor (CrtCPD) scored an average response of 1.5959 (SD = 0.43244),

which is lower than the previous factor and also tended to go more towards a Likert

response of 1 (i.e. ‘strongly agree’).

Statements accrued within the factor CrtCPD referred to the critical importance of CPD

and linked with assurance and confidence. These included:

CPD for CAs are critical as it may provide an assurance of professional service;

and

CPD should be a condition of a CA’s continued membership of a professional

body but also to ensure a maintained public confidence in the profession.

There was greater consensus in the responses to these statements, as can be seen

from FIGURE 7.10 (on the following page) with a smaller distribution and lower

standard deviation.

Empirical analysis

CHAPTER 7 287

0

20

40

60

80

100

120

1.1 1.2 1.3 1.5 1.6 1.7 1.9 2.0 2.1 2.3 2.4 2.5 2.7 2.8 2.9

Freq

uenc

y

FIGURE 7.10: Histogram and distribution of Factor 2 (CrtCPD)

SOURCE: SPSS Output


Once again the means calculated for each factor need to be tested on a gender basis

for which the t-test for independent samples will be used. The null and alternative

hypotheses developed are:

Hypothesis 4:


perception of education and pursuance of CPD.



Empirical analysis

CHAPTER 7 288

Hypothesis 5:


perception of the critical importance of CPD.



Using an independent t-test, the following results are presented in TABLE 7.30 and

TABLE 7.31 (below).





difference

Factors


Lower Upper

LrnCPD Equal variances

assumed .236 .627 .382 488 .703 -.05676 .08414

CrtCPD Equal variances

assumed .712 .399 2.214 489 .034* .00620 .15906

SOURCE: SPSS Output

* p < 05




Male 240 1.7326 .39839 .02572 Factor 1:

LrnCPD Female 250 1.7190 .39521 .02500

Male 241 1.6380 .44326 .02855 Factor 2:

CrtCPD Female 250 1.5553 .41863 .02648

SOURCE: SPSS Output

Empirical analysis

CHAPTER 7 289

7.4.6.1 Factor 1: LrnCPD

For factor 1 LrnCPD, a t-value of 0.382 was calculated with p = 0.703 (see TABLE

7.30 on the previous page). Because p > 0.05 (0.703 > 0.05), it means the null

hypothesis will not be rejected as that there is no statistically significant difference in

the perception of learning and training of CPD between prospective male and female

CAs.

This can be confirmed in the comparison of male respondents (1.7326; SD = 0.39839)

to female respondents (1.7190; SD = 0.39521) in TABLE 7.31 on the previous page.

7.4.6.2 Factor 2: CrtCPD

According to TABLE 7.30, a t-value of 2.214 and p = 0.034 was calculated for factor 2

CrtCPD. Because p < 0.05 (0.034 < 0.05), there is a statistically significant difference

and it means one would reject the null hypothesis as there is a difference between

prospective male and female CAs in the perception of the critical importance of CPD.

This can also be confirmed when the data in TABLE 7.31 (on the previous page) is

compared: the mean score for male respondents was 1.6380 (SD = 0.44326) compared

to the female respondents’ mean score of 1.5553 (SD = 0.41863).

7.5 LIFELONG LEARNING OF CHARTERED ACCOUNTANTS


Section B3 consisted of 9 items (W1 – W9) testing aspects about the lifelong learning

of CAs. All the data collected from the questionnaires with regard to this section has

been analysed and is described in detail in TABLE F1 (APPENDIX F) of this study.

TABLE F1 provides basic descriptive information about the data. TABLE F2 (in

APPENDIX F) provides a single, collated frequency tabulation of all the responses in

this data set. The mean response (in ascending order) and standard deviation to the

Empirical analysis

CHAPTER 7 290

items are provided in TABLE 7.32 below:

TABLE 7.32: Lifelong learning of chartered accountants


W5: LLL implies a desire to go beyond the minimum. 1.52 0.627

W2: LLL implies a continuous refinement of professional knowledge, skills,

values, ethics and attitudes. 1.53 0.539

W7: LLL implies a desire to incorporate better professional judgement. 1.53 0.561

W3: LLL implies a desire and ability to adapt and develop skills. 1.54 0.557

W1: LLL implies a desire and ability to continue to learn. 1.63 0.653

W8: LLL implies a desire to incorporate professional ethical values in

performance. 1.64 0.624

W9: LLL implies a continuous acquisition of ethics as one works in practice

after qualification. 1.65 0.641

W4: LLL implies a thorough foundation of professional values, ethics and

attitudes associated with CPD. 1.66 0.567

W6: LLL implies a thorough foundation of professional values, ethics and

attitudes in an undergraduate environment. 1.79 0.651

SOURCE: SPSS Output

The mean responses to the nine items were all above a 1 (i.e. ‘strongly agree’) and

below a 2 (i.e. ‘agree’). It is interesting to note from TABLE 7.32 that items W2 and

W7 scored exactly the same mean response (1.63) but with varying standard deviations

indicating the larger variance in responses. The four items W2, W3, W5 and W7 were

all in the mean range of 1.52 and 1.54 (i.e. leaning towards ‘agree’).

Item W6 scored the highest mean response (1.79 from TABLE 7.32), indicating a

leaning towards ‘agree’ only. From the frequency distribution in TABLE F2 one will

also notice that 53 respondents or 10.8% disagreed with this statement.

As was the case with Section B2, this section of the questionnaire produced mean

responses all lower than median responses, with the exception of item W5. As can be

seen from FIGURE 7.11 this item, which also had the highest mean response (1.52) of

Empirical analysis

CHAPTER 7 291

all the items, had a median response of 1. It is also interesting to note that for all the

items in this section, neither the mean nor the median responses were over a score of 2

(i.e. ‘agree’).

0

0.5

1

1.5

2

2.5

3

3.5

4

W1 W2 W3 W4 W5 W6 W7 W8 W9

Res

pons

es (L

iker

t-sca

le)

Median Mean FIGURE 7.11: Mean and median distribution for the lifelong learning of chartered

accountants (n = 491)

SOURCE: TABLE F1

FIGURE 7.12a and FIGURE 7.12b provide a breakdown of the frequencies attained

for the lifelong learning of chartered accountants based on a gender split.

In FIGURE 7.12a (on the following page), male students tend to disagree (3) more

with the various items than the female students did. Of the four items with a mean

score smaller than 1.60, females only strongly disagreed with one item (W5). For the

other three items, only males chose the strongly disagree response; interestingly, all

three of these statements dealt with professional values, skills, ethics and judgement.

Empirical analysis

CHAPTER 7 292

0

20

40

60

80

100

120

140

Num

ber o

f res

pond

ents

SA A D SD SA A D SD SA A D SD SA A D SD

W5 W2 W7 W3

Male Female FIGURE 7.12a: Gender split of frequencies for the lifelong learning of chartered

accountants (n = 491; x < 1.60)

SOURCE: SPSS Output

0

20

40

60

80

100

120

140

160

Num

ber o

f res

pond

ents

SA A D SD SA A D SD SA A D SD SA A D SD SA A D SD

W1 W8 W9 W4 W6

Male Female FIGURE 7.12b: Gender split of frequencies for the lifelong learning of chartered

accountants (n = 491; x > 1.60)

SOURCE: SPSS Output

Empirical analysis

CHAPTER 7 293

In FIGURE 7.12b (on the previous page) the five items with a mean score greater

than 1.60 are indicated. Only male respondents strongly disagreed with items W8 and

W9. However, for item W6 (Lifelong learning implies a thorough foundation of

professional values, ethics and attitudes in an undergraduate environment), female

respondents tended to strongly disagree more than male respondents.

7.5.2 Factor analysis of the items measuring the need for lifelong

learning of chartered accountants

Following the performance of exploratory factor analysis, the following information is

provided in TABLE 7.33 below:





Significance .000

SOURCE: SPSS Output

Even though a KMO value of 0.904 was generated supporting the factorability of the

correlation matrix, factor analysis could not be performed as only one factor was

extracted and it was therefore impossible to rotate the solution.


Even though a factor analysis could not be done for Section B3 of the questionnaire,

other statistical alternatives do exist to measure differences in ordinal data items (as

were used in the questionnaire). Such a test is the Mann-Whitney U Test used to test

differences between two independent groups on a continuous measure (see section

6.5.6.2) by comparing the means of two groups.

The hypothesis being tested in this section is:

Empirical analysis

CHAPTER 7 294

Hypothesis 6:


perception of LLL.


perception of LLL.

To test the validity of this hypothesis, the Mann-Whitney U Test was chosen at a 95%

confidence level. TABLE 7.34 (below) indicates the test statistics.

Only one item (W3) came close to the probability level of p < .05 with a value of

p = .011. In the case of W9, the p-value was statistically significant at a 90%

significance level with and p = 0.85.

TABLE 7.34: Non-parametric test (Section B3)

LLL implies a ...

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per

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ance

.

cont

inuo

us a

cqui

sitio

n of

et

hics

as

one

wor

ks in

pr

actic

e af

ter

qual

ifica

tion.

W1 W2 W3 W4 W5 W6 W7 W8 W9

Mann-

Whitney U 28910.5 28819.5 26612.0 29221.0 29750.5 29567.5 27831.0 27935.5 27702.0

Wilcoxon W 60035.5 59944.5 57987.0 60596.0 58911.5 60443.5 59206.0 59310.5 59077.0

Z -.780 -.778 -2.548 -.298 -.271 -.049 -1.577 -1.476 -1.725

Asymp. Sig.

(2-tailed) .436 .437 .011* .766 .787 .961 .115 .140 .085**

SOURCE: SPSS Output

* p < 0.05

** p < 0.10

As there was not a general trend of p < 0.05 throughout, the results are therefore not

statistically significant and the null hypothesis is therefore not rejected. This therefore

Empirical analysis

CHAPTER 7 295

means that there is no difference between prospective male and female CAs in the

perception of LLL.

7.6 ASPECTS OF ETHICS EDUCATION RELATED TO CHARTERED ACCOUNTANTS


In Section B4 of the questionnaire, respondents were provided with 11 items (X1 –

X11) about aspects of ethics education related to chartered accountants.

All the data collected from the questionnaires with regard to this section has been

analysed and is described in detail in APPENDIX G of this study where TABLE G1

provides basic descriptive information, whilst TABLE G2 provides a single, collated

frequency tabulation of all the responses in this data set. The mean response (in

ascending order) and standard deviation to the items are provided in TABLE 7.35:

TABLE 7.35: Aspects of ethics related to chartered accountants


X1: Ethics education heightens a student’s awareness of ethical issues in

professional practice. 1.55 0.589

X4: Ethics education provides a basic understanding of the morals of the

profession. 1.69 0.564

X5: Ethics education enhances a student’s ability to judge a situation. 1.69 0.621

X3: Ethics education strengthens a student’s moral reasoning skills. 1.74 0.64

X6: Ethics education provides students with the necessary skills required in

practice. 1.97 0.753

X8: Ethics education provides a competitive advantage for CAs. 1.98 0.757

X7: Ethics education is a “moral conversion process”. 2.07 0.737

X2: Ethics is a gut feel that everybody is born with. 2.40 0.905

X9: Ethics education is the responsibility of the tertiary institution, not the

company and its management. 2.82 0.877

X10: Professional ethics is a contradiction. 2.99 0.795

Empirical analysis

CHAPTER 7 296


X11: There is no need for ethics education in the undergraduate training of

CAs. 3.30 0.774

SOURCE: SPSS Output

Just over half of the responses (54.5%) scored a mean of less than 2 (i.e. ‘agree’).

Two of the items (i.e. X9 & X10) scored a mean close to 3 (i.e. ‘disagree’) and X11

scored a mean over 3 (i.e. ‘disagree’) (see FIGURE 7.13 below). In respect of the

latter, respondents were strongly of the opinion that there is a need for ethics

education in the undergraduate training of CAs. As item X11 was only included in the

questionnaire as a control factor, it would not be used in any further statistical analysis

as its composition does not add to the reliability of the statistical analysis. (Also see

section 7.6.2.3.)

It is also interesting to note that this section had the highest number of items that were

not responded to. Items X7 and X10 had five and nine non-responses respectively.

0

0.5

1

1.5

2

2.5

3

3.5

4

X1 X2 X3 X4 X5 X6 X7 X8 X9 X10 X11

Res

pons

e (L

iker

t-sca

le)

Median Mean FIGURE 7.13: Mean and median distribution for aspects of ethics related to the

chartered accountant (n = 491)

SOURCE: TABLE G1

Empirical analysis

CHAPTER 7 297


analysis

7.6.2.1 Ethics is a gut feel

In TABLE 7.35 (on page 294) one can see that item X2 had a mean value above the

median. Analysing the responses of this item (see TABLE 7.36 below), respondents

were nearly equally split in their view that ethics is a gut feel everyone is born with.

TABLE 7.36: Descriptive analysis: Item X2 (Section B4)

RESPONSE f %


Agree (2) 183 37.4

Disagree (3) 165 33.7


Ethics is a gut feel that everybody is born

with.

TOTAL 489 100.0

SOURCE: TABLE G2

Of the respondents, 54.4% agreed (i.e. ‘strongly agree’ or ‘agree’) with the statement

and 45.6% disagreed (i.e. ‘disagree’ or ‘strongly disagree’) with the statement. As was

stated in section 4.3.4, values are concerned with the way a person will behave in

certain situations, whereas ethics is concerned with the way a moral person should

behave.

Values are therefore basic and fundamental beliefs that guide or motivate attitudes or

actions. Even though section 4.2.2 stated that ethics (as a subject) is as old as

humanity itself, it involves itself with the character (i.e. values) of how people act

towards each other. To therefore state that one is born with a gut feel of ethics may

not be one hundred percent correct but there may be some truth in it in that people

have inherently fundamental beliefs about certain actions and attitudes.

7.6.2.2 Ethics education

A rather large number of respondents did not feel that ethics education provides

Empirical analysis

CHAPTER 7 298

students with the necessary skills required in practice (item X6). From TABLE 7.37

one notices that 104 respondents disagreed (i.e. ‘disagree’ or ‘strongly disagree’) with

this statement.


RESPONSE f %


Agree (2) 254 51.9



Ethics education provides students with

the necessary skills required in practice.

TOTAL 489 100.0

SOURCE: TABLE G2

This is again contrary to what respondents indicated in the previous three statements

that stated that ethics education:

strengthens a student’s moral reasoning skills (item X3);

provides a basic understanding of the morals of the profession (item X4); and

enhances a student’s ability to judge a situation (item X5).

In these three statements more than 90% of the respondents agreed each time (i.e.

‘strongly agree’ or ‘agree’) with each statement. Is it perhaps possible that respondents

do not see the connection between ethics education providing necessary practice skills

and what is necessary to judge a situation in practice?

7.6.2.3 Ethics education: a moral conversion process

In their response to item X7 (see TABLE 7.38 on the following page), only 25.7% of

the respondents disagreed (i.e. ‘disagree’ or ‘strongly disagree’) with the statement that

ethics education is a moral conversion process.

Empirical analysis

CHAPTER 7 299


RESPONSE f %


Agree (2) 259 53.3

Disagree (3) 112 23.0


Ethics education is a “moral conversion

process”.

TOTAL 486 100.0

SOURCE: TABLE G2

It was emphatically proven in section 5.2.5 of the study that a course in ethics at a

higher education institution cannot and should not be seen as a moral conversion

process but that the educational component should merely be seen as an enhancement

of the moral educational and developmental process.

7.6.2.4 Ethics education at higher education institutions

Both Items X9 and X11 dealt with issues of ethics education at a higher education

institution. In the responses to item X9 (TABLE 7.39a), only 31.1% of the

respondents agreed (i.e. ‘strongly agree’ or ‘agree’) with the statement.

TABLE 7.39a: Descriptive analysis: Item X9 (Section B4)

RESPONSE f %


Agree (2) 109 22.3

Disagree (3) 229 46.8


Ethics education is the responsibility of the

tertiary institution, not the company and

its management.

TOTAL 489 100.0

SOURCE: TABLE G2

This stands in sharp contrast to the responses for item X11 (see TABLE 7.39b on the

following page), where only 13.3% of the respondents agreed (i.e. ‘strongly agree’ or

‘agree’) with the statement that there is no need for ethics education in the

undergraduate training of CAs.

Empirical analysis

CHAPTER 7 300

TABLE 7.39b: Descriptive analysis: Item X11 (Section B4)

RESPONSE f %


Agree (2) 50 10.2

Disagree (3) 198 40.5


There is no need for ethics education in

the undergraduate training of CAs.

TOTAL 489 100.0

SOURCE: TABLE G2

The responses to these two items totally contradict each other. It was shown from the

literature in section 5.2 that the question of whether ethics should be taught at an

undergraduate level has not been surpassed by the question of methodology to be used

in the teaching of ethics.

7.6.2.5 Professional ethics: a contradiction?

In section 4.4.3 the issue of professional ethics was explained as ‘codes of behaviour’.

It is to therefore gratifying to note that nearly 78% of the respondents to item X10

(TABLE 7.40) disagreed and stated that professional ethics is not a contradiction. May

one now assume that these respondents (future CAs) will all ascribe and adhere to

SAICA’s prescribed code of ethics for CAs?


RESPONSE f %


Agree (2) 83 17.2

Disagree (3) 250 51.9


Professional ethics is a contradiction.

TOTAL 482 100.0

SOURCE: TABLE G2

As with previous sections of the questionnaire, the items in Section B4, consisting of

11 different categorical or nominal items, were subjected to factor analysis to determine

the underlying dimensions of the various attitudes emerging in the data.

Empirical analysis

CHAPTER 7 301

7.6.3 Factor analysis of the items measuring aspects of ethics

related to chartered accountants



normalisation to identify the various dimensions of continued professional development

of CAs by way of Principal Axis Factoring as an extraction method.

TABLE 7.41: KMO and Bartlett's Test (First factor analysis: Section B4)




Significance .000

SOURCE: SPSS Output

The KMO value was 0.841 and Bartlett’s Test reached statistical significance (p < 0.05),

supporting the factorability of the correlation matrix (see TABLE 7.41 above).

Principal Axis Factoring revealed the presence of three components with initial

Eigenvalues exceeding 1 and cumulatively explaining 62.19% of the variance.

The various items loaded in factors 2 and 3 (i.e. items X9; X10 and X2) explained

14.75% and 10.35% of the variance respectively. The MSAs (i.e. indication of the

extent to which a particular item is correlated with other items) on these three items

were all however less than the cut-off of 0.7 (see TABLE G3 in APPENDIX G). In the

case of item X2 the MSA was 0.496, which means that this item must be removed as it

does not have sufficient correlation with at least one other item to be retained in the

factor analysis. Items X9 and X10 had MSA values lower than 0.7, but they were

retained for the purposes of the analysis.

A second round of factor analysis was performed with the exclusion of item X2 from the

data. The KMO (see TABLE 7.42 on the following page) was recalculated at a level of

0.850 > 0.7 and p < 0.05 (p = 0.000) and a factor analysis was warranted. The MSAs

for the second round of factor analysis were once again all greater than or equal to 0.7

Empirical analysis

CHAPTER 7 302

with the exception of items X9 and X10, which had MSA values lower than 0.7 but they

were retained for the purposes of the analysis.

TABLE 7.42: KMO and Bartlett's Test (Second factor analysis: Section B4)




Significance .000

SOURCE: SPSS Output

Principal Axis Factoring revealed the presence of two components with an initial

Eigenvalue exceeding 1 and explaining 57.073% of the variance. TABLE 7.43

indicates the two factors that were retained for further analysis.


Factor Item

1 2

X5: Ethics education enhances a student’s ability to judge a situation. .757

X3: Ethics education strengthens a student’s moral reasoning skills. .755

X4: Ethics education provides a basic understanding of the morals of the

profession. .722


practice. .669 .347

X1: Ethics education heightens a student’s awareness of ethical issues in

professional practice. .625

X8: Ethics education provides a competitive advantage for CAs. .477 .339

X7: Ethics education is a “moral conversion process”. .452 .329

X9: Ethics education is the responsibility of the tertiary institution, not the

company and its management. .647

X10: Professional ethics is a contradiction. .546

SOURCE: SPSS Output



Empirical analysis

CHAPTER 7 303

As only two items (X9 & X10) loaded on factor 2, no further analysis could be done.

7.6.4 Item analysis

7.6.4.1 Factor 1: EthcEduc

Factor 1 can be described as the advantages attained by prospective chartered

accountants through ethics education (hereafter EthcEduc). The following

statements were found to have the highest loading on EthcEduc in the order of

loading:

X5 Ethics education enhances a student’s ability to judge a situation.

X3 Ethics education strengthens a student’s moral reasoning skills.

X4 Ethics education provides a basic understanding of the morals of the

profession.


practice.

X1 Ethics education heightens a student’s awareness of ethical issues in

professional practice.

X8 Ethics education provides a competitive advantage for CAs.

X7 Ethics education is a “moral conversion process”.

A standardised Cronbach’s alpha (α) of 0.835 was generated, indicating a very good

level of internal consistency of the data, since 0.835 > 0.7.

TABLE 7.44 (on the following page) provides an overview of the item statistics and

indicates the mean, standard deviation and number of respondents for each of the

items included in the scale in ascending mean order.

Empirical analysis

CHAPTER 7 304

TABLE 7.44: Item statistics – Factor 1 (EthcEduc)


X1: Ethics education heightens a student’s awareness of

ethical issues in professional practice. 1.55 .589 484

X4: Ethics education provides a basic understanding of the

morals of the profession. 1.69 .564 484

X5: Ethics education enhances a student’s ability to judge

a situation. 1.69 .622 484

X3: Ethics education strengthens a student’s moral

reasoning skills. 1.74 .640 484

X6: Ethics education provides students with the necessary

skills required in practice. 1.98 .753 484

X8: Ethics education provides a competitive advantage for

CAs. 1.98 .757 484

X7: Ethics education is a “moral conversion process”. 2.08 .735 484

SOURCE: SPSS Output

In the calculations, SPSS indicated that even deleting any of the items would not make

it possible to increase the value of Cronbach’s alpha significantly (see TABLE 7.45

below).

TABLE 7.45: Item-total statistics – Factor 1 (EthcEduc)

Item Scale Mean

if Item Deleted

Scale Variance if

Item Deleted


Cronbach's Alpha if

Item Deleted

X1: Ethics education heightens a

student’s awareness of ethical

issues in professional practice.

11.15 8.781 .549 .818

X3: Ethics education strengthens a

student’s moral reasoning skills. 10.97 8.183 .670 .799

X4: Ethics education provides a basic

understanding of the morals of the

profession.

11.02 8.722 .601 .812

Empirical analysis

CHAPTER 7 305

Item Scale Mean

if Item Deleted

Scale Variance if

Item Deleted


Cronbach's Alpha if

Item Deleted

X5: Ethics education enhances a

student’s ability to judge a

situation.

11.01 8.261 .671 .800

X6: Ethics education provides students

with the necessary skills required in

practice.

10.73 7.685 .669 .798

X7: Ethics education is a “moral

conversion process”. 10.63 8.441 .483 .830

X8: Ethics education provides a

competitive advantage for CAs. 10.73 8.289 .501 .828

SOURCE: SPSS Output

7.6.5 Factor scores

7.6.5.1 Calculation

The mean response of advantages attained by prospective chartered

accountants through ethics education is calculated using the formula:

77816435 XXXXXXXEthcEduc ++++++

=


TABLE 7.46 below indicates the calculated descriptive statistics of the factor scores.

TABLE 7.46: Descriptive Statistics (Factor scores: Section B4)


Factor 1: EthcEduc 489 1.00 4.00 1.8134 .47452

SOURCE: TABLE G4

Students had to respond to the questionnaire using a 4-point Likert scale. Based on the

above analysis, the range of responses was 3.00, with minimum scores for all factors

Empirical analysis

CHAPTER 7 306

indicated as a 1.00 (i.e. ‘strongly agree’) and maximum scores indicated as a 4.00 (i.e.

‘strongly disagree’). The mean response, however, is close to a response of 2 (i.e.

‘agree’).

In terms of the factor EthcEduc, respondents were split in a ratio of nearly 60:40

between strongly agree and agree on items describing the advantages of ethics

education for prospective CAs. 57.68% of the respondents strongly agreed (i.e. 1) with

the statement, whereas 42.32% only agreed (i.e. 2) with the items.

The largest number of respondents (77 or 15.7%) gave a mean response of 2 (i.e.

‘agree’), which was also the modal response. These are all included within the mean

class interval of 2.0 ≤ x < 2.3 that depicts 135 respondents, or 27.61% of the sample.

Seven respondents (1.4%) felt that ethics education for prospective CAs does not have

any advantage by indicating a response of either a 3 (i.e. ‘disagree’) or a 4 (i.e.

‘strongly disagree’).

The descriptive statistics of item X7 Ethics education is a ‘moral conversion process’ in

TABLE 7.35 reveal that the mean response was 2.08 (SD = 0.735), which is much

higher than the factor mean of 1.8134. This is also contrary to what was discussed in

Chapter 5 of the study, where it was stated that ethics education at higher education

institutions should not be seen as a moral conversion process. (Also see section

7.6.2.2.)

Graphically represented in FIGURE 7.14 on the following page, the factor EthcEduc

has a fairly peaked or leptokurtic distribution (i.e. kurtosis = 0.590; kurtosis > 0) and is

positively skewed (skewness = 0.278).

As item X9 did not load in factor 1, some further aspects need to be brought to the

fore. Item X9 (Ethics education is the responsibility of the tertiary institution, not the

company and its management) showed a mean response of 2.82 (SD = 0.877), which

is close to a 3 (i.e. disagree).

Empirical analysis

CHAPTER 7 307

0

20

40

60

80

100

120

140

160

1.1 1.3 1.5 1.7 1.9 2.1 2.3 2.5 2.7 2.9 3.1 3.3 3.5 3.7 3.9

Freq

uenc

y

FIGURE 7.14: Histogram and distribution of Factor 1 (EthcEduc)

SOURCE: SPSS Output

This is very much in agreement with the whole proposition of the thesis that ethics

education is not merely the responsibility of a higher education institution or the

chartered accounting firm where the prospective CA is placed. It is also the CA’s own

responsibility to keep abreast of changes by way of CPD. This means that prospective

CAs need to be equipped to handle this very important aspect of their professional

growth.


As with the previous sections of the chapter, where the average mean of the factor was

calculated, it is important to find out whether this mean differs on a gender basis.

Again a t-test for independent samples will be used.

The null and alternative hypothesis is:

Empirical analysis

CHAPTER 7 308

Hypothesis 7:


perception of the advantages of ethics education.



Using an independent t-test, the following results are presented in TABLE 7.47 and

TABLE 7.48.





difference

Factors


Lower Upper

EthcEduc

Equal

variances

assumed

.209 .648 3.026 487 .003* .04518 .21247

SOURCE: SPSS Output

* p < 0.05

From TABLE 7.47 a t-value of 3.026 with p = 0.003 is evident. Because p < 0.05

(0.003 < 0.05), the null hypothesis is rejected, as there is a statistically significant

difference in the perception of the advantages of ethics education between prospective

male and female CAs.




Male 240 1.8790 .48671 .03142 Factor 1:

EthcEduc Female 249 1.7501 .45454 .02881

SOURCE: SPSS Output

Empirical analysis

CHAPTER 7 309

This is also shown in the comparison of the means of male respondents (1.8790; SD =

0.48671) to female respondents (1.7501; SD = 0.45454) in TABLE 7.48 on the

previous page.

7.7 PERCEIVED CORE VALUES WITHIN THE CHARTERED ACCOUNTANCY PROFESSION


Section B5 of the questionnaire, consisting of 8 items (Y1 – Y8), tested aspects of the

perceived core values within the chartered accountancy profession. As with all the

other analyses, students had to respond to the items using a 4-point Likert scale, but

this time their responses had to indicate to which extent the perceived core values were

important or not. The scale used was:

1 = Not important

2 = Somewhat important

3 = Important

4 = Very important

The reasoning behind inverting the scale (‘very important’ is now a 4 and not a 1 as in

the other sections of the questionnaire), was to be certain that respondents did not just

choose a response of ‘1’ the whole time. For analysis and consistency purposes the

responses were transposed, however, so that the scale therefore reads:

1 = Very important

2 = Important

3 = Somewhat important

4 = Not important

All the data collected from the questionnaires with regard to the perceived core

values within the chartered accountancy profession has been analysed and is

Empirical analysis

CHAPTER 7 310

described in detail in TABLE H1 (APPENDIX H) of this study, which provides basic

information describing the data inter alia in terms of the number of valid and missing

responses; the central tendency of responses; as well as skewness and kurtosis of

responses.

TABLE H2 (in APPENDIX H) provides a single, collated frequency tabulation of all the


deviation to the items are provided in TABLE 7.49 below:

TABLE 7.49: Perceived core values within the CA profession


Y6: How important is it for a CA to be trustworthy? 1.35 0.779

Y7: How important is it for a CA to be reliable? 1.37 0.796

Y5: How important is it for a CA to show integrity? 1.38 0.803

Y8: How important is it for a CA to be objective? 1.39 0.802

Y3: How important is it for a CA to have professional competence? 1.44 0.794

Y4: How important is it for a CA to have high ethical standards? 1.44 0.822

Y1: How important is it for a CA to learn the skill of CPD? 1.66 0.798

Y2: How important is it for a CA to be a life-long learner? 1.82 0.827

SOURCE: SPSS Output

TABLE 7.49 shows that respondents felt that CAs need certain core values: one notes

that the mean values are all above 1.5 (i.e. ‘very important’), with the exception of

items Y1 and Y2. What is interesting is that the skills of ‘LLL’ and ‘CPD’ do not seem to

be that important in comparison with the other values mentioned. The value of

‘trustworthiness’ seems to be the most important value, with a mean value of 1.35

(SD = 0.779).

Acquiring the skill of CPD (item Y1) came in second-last with a mean of 1.66 (SD =

0.798) and that of LLL (item Y2) last with a mean of 1.82 (SD = 0.827). However, one

has to take cognisance of the fact that all these mean values are below a 2 (i.e.

‘important’). This is in sharp contrast with item U3 (see TABLE D2), where nearly 94%

Empirical analysis

CHAPTER 7 311

of the respondents were in agreement (i.e. ‘strongly agree’ and ‘agree’) that CAs will be

able to focus on continued learning throughout their career if they learnt how to do this

as part of their training.

As can be seen from FIGURE 7.15 below, all the items had a mean response greater

than a median response except for item Y2 (How important is it for a chartered

accountant to be a life-long learner?), which indicates that respondents did not feel that

strongly about this item compared to the rest.

0

0.5

1

1.5

2

2.5

3

3.5

4

Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8

Res

pons

es (L

iker

t-sca

le)

Median Mean FIGURE 7.15: Mean and median distribution for the perceived core values within the

chartered accountancy profession (n = 491)

SOURCE: TABLE H1

FIGURE 7.16a and FIGURE 7.16b (on the following pages) provide a breakdown of

the frequencies attained for the perceived core values within the chartered

accountancy profession based on a gender split.

In FIGURE 7.16a (on the following page), the four items with a mean score less than

1.4 are indicated. Female respondents tended to agree to a much greater extent that

items Y6, Y7, Y5 and Y8 are all either very important or important. A response of

Empirical analysis

CHAPTER 7 312

somewhat important was also dominated by the female respondents, with the exception

of item Y5 where males were 2:1 in disagreement. An indication of not important was,

for all four items, dominated by male respondents.

0

50

100

150

200

250

Num

ber o

f res

pond

ents

VI I SI NI VI I SI NI VI I SI NI VI I SI NI

Y6 Y7 Y5 Y8

Male Female FIGURE 7.16a: Gender split of frequencies for the perceived core values within the

chartered accountancy profession (n = 491; x < 1.40)

SOURCE: SPSS Output

According to FIGURE 7.16b on the following page, males tended to respond to the

items with a somewhat important and not important more often than females did, with

the exception of item Y3 (How important is it for a chartered accountant to have

professional competence?), where there was an even split between the genders.

Empirical analysis

CHAPTER 7 313

0

20

40

60

80

100

120

140

160

180

200N

umbe

r of r

espo

nden

ts

VI I SI NI VI I SI NI VI I SI NI VI I SI NI

Y3 Y4 Y1 Y2

Male Female FIGURE 7.16b: Gender split of frequencies for the perceived core values within the

chartered accountancy profession (n = 491; x > 1.40)

SOURCE: SPSS Output

Another non-parametric test that can be used to explore the interrelationship amongst

variables is the Pearson Chi-square ( 2χ ) test for independence (Pallant, 2005: 104,

287).

TABLE 7.50 (on the following page) indicates the results attained from the various Chi-

square tests for each of the items Y1 – Y8 based on gender.

Empirical analysis

CHAPTER 7 314

TABLE 7.50: Pearson Chi-square test (Section B5)

Chi-Square Tests

Items Value df

Asymp. Sig. (2-sided)

N of Valid Cases

Y1 How important is it for a CA to learn the skill of

CPD? 18.325 3 .000* 491

Y2 How important is it for a CA to be a life-long

learner? 12.445 3 .006* 490

Y3 How important is it for a CA to have professional

competence? 9.094 3 .028* 491

Y4 How important is it for a CA to have high ethical

standards? 11.261 3 .010* 491

Y5 How important is it for a CA to show integrity? 8.974 3 .030* 491

Y6 How important is it for a CA to be trustworthy? 9.575 3 .023* 491

Y7 How important is it for a CA to be reliable? 10.232 3 .017* 491

Y8 How important is it for a CA to be objective? 12.411 3 .006* 491

SOURCE: SPSS Output

* p < 0.05

From TABLE 7.50 it is clear that there is a statistically significant difference in the

perceived core values within the CA profession based on gender, as all p-values are less

than 0.05.

7.7.2 Factor analysis of the items measuring the perceived core

values within the chartered accountancy profession



normalisation to identify the various dimensions of the need for LLL of CAs by way of

Principal Axis Factoring as an extraction method (see TABLE 7.51 on the following

page).

Empirical analysis

CHAPTER 7 315





Significance .000

SOURCE: SPSS Output

Even though a KMO value of 0.948 was generated supporting the factorability of the

correlation matrix, factor analysis could not be performed as only one factor was

extracted and it was therefore impossible to rotate the solution.


As was the case with Section B3 of the questionnaire, the differences in ordinal data

items will be measured using the Mann-Whitney U non-parametric test to test

differences between two independent groups.


Hypothesis 8:

H0: There is no difference between male and female respondents in the

perceived core values within the CA profession.

H1: There is a difference between males and females in the perceived core

values within the CA profession.


confidence level and the results are indicated in TABLE 7.52 on the following page.

Empirical analysis

CHAPTER 7 316


How important is it for a CA to ...

lear

n th

e sk

ill o

f CP

D?

be a

life

-long

le

arne

r?

have

pr

ofes

sion

al

com

pete

nce?

have

hig

h et

hica

l st

anda

rds?

show

inte

grity

?

be t

rust

wor

thy?

be r

elia

ble?

be o

bjec

tive?

Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Mann-Whitney U 25487.

5

25954.

0

26559.

0

26667.

0

27013.

5

26878.

5

26788.

5

26423.

0

Wilcoxon W 56862.

5

57079.

0

57934.

0

58042.

0

58388.

5

58253.

5

58163.

5

57798.

0

Z -3.263 -2.804 -2.819 -2.779 -2.644 -2.889 -2.871 -3.118

Asymp. Sig.

(2-tailed) .001* .005* .005* .005* .008* .004* .004* .002*

SOURCE: SPSS Output

* p < 0.05

As can be seen from TABLE 7.52, all the items tested had probability levels of less

than 0.05 (p < .05). These results are therefore statistically significant and the null

hypothesis is rejected.

This means that there is a statistically significant difference between male and female

respondents in the perceived core values within the CA profession. This can also be

confirmed with the results of the Chi-square tests reported in TABLE 7.49.

7.8 ASPECTS OF THE EDUCATION AND TRAINING OF CHARTERED ACCOUNTANTS AT RAU


The last section of the questionnaire (Section B6) dealt with aspects of the education

and training of prospective chartered accountants at RAU and consisted of 10 items (Z1

– Z10).

Empirical analysis

CHAPTER 7 317

All the data collected from the questionnaires with regard to this section has been

analysed and are described in detail in APPENDIX I of this study, with TABLE I1

providing basic descriptive information and TABLE I2 a single, collated frequency

tabulation of all the responses in this data set. The mean response (in ascending

order) and standard deviation to the items are provided in TABLE 7.53 below:

TABLE 7.53: Aspects of the education and training of prospective chartered

accountants at RAU


Z8: RAU uses educators who are skilled in the professional values, ethics

and attitudes pertaining to CAs. 1.55 0.575

Z10: RAU focuses on courses that enhance the value-added approach of CAs. 1.68 0.583

Z1: The professional values, ethics and attitudes highlighted by professional

bodies are apparent in the academic programmes at RAU. 1.72 0.584

Z2: RAU focuses on courses, which include aspects of professional ethics

and values applicable to CAs. 1.77 0.569

Z5: At RAU, emphasis is placed on the development of the necessary skills

for CPD of CAs. 1.81 0.611

Z7: At RAU, emphasis is placed on the professional values, ethics and

attitudes for CPD of CAs. 1.86 0.576

Z3: At RAU, emphasis is placed on the development of professional values,

ethics and attitudes in the training of CAs. 1.87 0.635

Z4: RAU focuses on discipline-specific courses, covering various applicable

international issues pertaining to the role of the CA. 1.91 0.665

Z9: A definite focus on recent professional ethical conundrums, corporate

collapses and mounting stakeholder pressure is evident in the courses

offered at RAU.

1.95 0.695

Z6: RAU offers courses that provide skills necessary in the application of

computer software. 1.98 0.730

SOURCE: SPSS Output

TABLE 7.53 provides a positive picture of the judgements made by respondents in

completing the questionnaire. All 10 items scored a mean response above 2 (i.e.

‘agree’) and none of the responses were below a mean value of 1.50. The only item

Empirical analysis

CHAPTER 7 318

coming close to a mean response of 2 is item Z6, but this item was only included for

control purposes and no further analysis was done on it.

As can be seen from FIGURE 7.17 below, all the items had a mean response less than

the median response of 2. Only item Z6 came close to the median response with a

mean response of 1.98 (SD = 0.730).

0

0.5

1

1.5

2

2.5

3

3.5

4

Z1 Z2 Z3 Z4 Z5 Z6 Z7 Z8 Z9 Z10

Res

pons

es (L

iker

t-sca

le)

Median Mean FIGURE 7.17: Mean and median distribution for the aspects of the education and

training of prospective chartered accountants at RAU (n = 491)

SOURCE: TABLE I1

FIGURE 7.18a and FIGURE 7.18b provide a breakdown of the frequencies attained

for the aspects of the education and training of prospective chartered

accountants at RAU based on a gender split.

FIGURE 7.18a (on the following page) provides a histogram of the five items in this

section of the questionnaire that had a mean response less than 1.85. In four of the

items (i.e. Z8, Z10, Z1 & Z5) only males responded with a 4 (i.e. ‘strongly disagree’),

whereas in one item (Z2) one female indicated a similar response. It is important to

note, however, that the strongly disagree response in items Z8, Z10 and Z5 was

indicated by two male respondents and three in item Z1. With the exception of

Empirical analysis

CHAPTER 7 319

responses in items Z8 and Z5, male and female responses to these items across the

range were fairly equally distributed.

0

20

40

60

80

100

120

140

160

Num

ber o

f res

pond

ents

SA A D SD SA A D SD SA A D SD SA A D SD SA A D SD

Z8 Z10 Z1 Z2 Z5

Male Female FIGURE 7.18a: Gender split of frequencies for the aspects of the education and

training of prospective chartered accountants at RAU (n = 491; x

< 1.85)

SOURCE: SPSS Output

As with items Z8 and Z10 in FIGURE 7.18a, items Z7 and Z3 in FIGURE 7.18b (on

the following page) indicated that only males strongly disagreed with these statements.

For the rest of the items (i.e. Z4 & Z9) it was again males who strongly disagreed with

these statements as well.

Empirical analysis

CHAPTER 7 320

0

20

40

60

80

100

120

140

160

180N

umbe

r of r

espo

nden

t

SA A D SD SA A D SD SA A D SD SA A D SD

Z7 Z3 Z4 Z9

Male Female FIGURE 7.18b: Gender split of frequencies for the aspects of the education and

training of prospective chartered accountants at RAU (n = 491; x

> 1.85)

SOURCE: SPSS Output


analysis

7.8.2.1 Skilled educators

In only one (item Z8) out of the ten statements posed as part of Section B6 (see

TABLE 7.54a on the following page) the majority of respondents (48.8%) strongly

agreed that RAU uses educators who are skilled in the professional values, ethics and

attitudes pertaining to CAs.

In the other nine statements, more than half of the responses were only ‘agree’, with a

negligible number of respondents disagreeing (either ‘disagree’ or ‘strongly disagree’).

This should not be construed as a vote of no confidence in the education and training

Empirical analysis

CHAPTER 7 321

of CAs at RAU. This may merely be interpreted that respondents did not strongly agree

with these statements.

TABLE 7.54a: Descriptive analysis: Item Z8 (Section B6)

RESPONSE f %


Agree (2) 234 48.0

Disagree (3) 14 2.9


RAU uses educators who are skilled in the

professional values, ethics and attitudes

pertaining to CAs.

TOTAL 488 100.0

SOURCE: TABLE I2

If one however aggregates the responses for ‘strongly agree’ and ‘agree’ and does the

same for the responses ‘disagree’ and ‘strongly disagree’ of the rest of the statements,

one sees a different picture.

Looking at the aggregated responses to item Z10 (TABLE 7.54b) which links very

nicely with the responses to item Z8 above in TABLE 7.54a, one notices that in this

case close to 95% of the respondents felt that RAU also provides courses that enhance

the value-added approach of CAs and does not just use skilled educators.

TABLE 7.54b: Descriptive analysis: Item Z10 (Section B6)

RESPONSE f %

Strongly agree (1)

Agree (2) 462 94.7

Disagree (3)


RAU focuses on courses that enhance the

value-added approach of CAs.

TOTAL 488 100.0

SOURCE: TABLE I2

7.8.2.2 A focus on computer skills

The statement where the highest number of the respondents (94 or 19.2%) disagreed

(i.e. ‘disagree’ and ‘strongly disagree’) with a statement can be found in item Z6 (see

TABLE 7.54c below).

Empirical analysis

CHAPTER 7 322

TABLE 7.54c: Descriptive analysis: Item Z6 (Section B6)

RESPONSE f %

Strongly agree (1)

Agree (2) 395 80.8

Disagree (3)


RAU offers courses that provide skills

necessary in the application of computer

software.

TOTAL 489 100.0

SOURCE: TABLE I2

Although this may be taken as important within the holistic education of CAs, one may

ignore this statement for the purposes of this study as its focus was not on computer

skills but rather on the skills associated with ethics and CPD.

7.8.2.3 A focus on professional ethics

What is bothersome is the response for item Z9 (TABLE 7.54d). Nearly 19% of the

respondents felt that there is not a definite focus on recent professional ethical

conundrums, corporate collapses and mounting stakeholder pressure in the courses

offered at RAU.

TABLE 7.54d: Descriptive analysis: Item Z9 (Section B6)

RESPONSE f %

Strongly agree (1)

Agree (2) 397 81.4

Disagree (3)


A definite focus on recent professional

ethical conundrums, corporate collapses

and mounting stakeholder pressure is

evident in the courses offered at RAU.

TOTAL 488 100.0

SOURCE: TABLE I2

If one now compares this to the responses for items Z1 and Z2 (see TABLE 7.54e and

TABLE 7.54f on the following page), it shows that respondents agreed much more

that RAU focuses on courses which include aspects of professional ethics and values

applicable to CAs and which are highlighted by professional bodies (e.g. SAICA and

IFAC).

Empirical analysis

CHAPTER 7 323

TABLE 7.54e: Descriptive analysis: Item Z1 (Section B6)

RESPONSE f %

Strongly agree (1)

Agree (2) 463 94.3

Disagree (3)


The professional values, ethics and

attitudes highlighted by professional

bodies are apparent in the academic

programmes at RAU.

TOTAL 491 100.0

SOURCE: TABLE I2

TABLE 7.54f: Descriptive analysis: Item Z2 (Section B6)

RESPONSE f %

Strongly agree (1)

Agree (2) 454 93.2

Disagree (3)


RAU focuses on courses, which include

aspects of professional ethics and values

applicable to CAs.

TOTAL 487 100.0

SOURCE: TABLE I2

What may be taken from these ‘contrary’ responses is that although the courses

presented at RAU focuses on professional values, ethics and attitudes applicable to CAs,

these should also include a larger ‘practical’ component in order to bring the theory

closer to the practice found in the professional world, not just nationally but also

internationally.

This is clear from the responses to item Z4 (see TABLE 7.54g on the following page)

with nearly 17% of the respondents feeling that RAU does not focus on discipline-

specific courses, covering various applicable international issues pertaining to the role of

the CA.

Empirical analysis

CHAPTER 7 324

TABLE 7.54g: Descriptive analysis: Item Z4 (Section B6)

RESPONSE f %

Strongly agree (1)

Agree (2) 406 83.4

Disagree (3)


RAU focuses on discipline-specific courses,

covering various applicable international

issues pertaining to the role of the CA.

TOTAL 487 100.0

SOURCE: TABLE I2

Comparing the results from item Z2 (TABLE 7.54f on the previous page) with that of

item Z3 (TABLE 7.54h) another important aspect is highlighted.

TABLE 7.54h: Descriptive analysis: Item Z3 (Section B6)

RESPONSE f %

Strongly agree (1)

Agree (2) 422 86.3

Disagree (3)


At RAU, emphasis is placed on the

development of professional values, ethics

and attitudes in the training of CAs.

TOTAL 489 100.0

SOURCE: TABLE I2

Although 93.2% of the respondents agreed (i.e. ‘strongly agree’ or ‘agree’) with the

statement that courses presented at RAU focus on aspects of professional ethics and

values applicable to CAs (item Z2), nearly 14% of the respondents felt it is not

emphasised enough as to ensure that the various professional values, ethics and

attitudes in the training of CAs are sufficiently developed.

What is also interesting is that just over 10% of the respondents in item Z5 (see TABLE

7.54i on the following page) felt that during their undergraduate studies at RAU, not

enough emphasis is placed on the development of the necessary skills for CPD of CAs.

Empirical analysis

CHAPTER 7 325

TABLE 7.54i: Descriptive analysis: Item Z5 (Section B6)

RESPONSE f %

Strongly agree (1)

Agree (2) 438 89.8

Disagree (3)



development of the necessary skills for

CPD of CAs.

TOTAL 488 100.0

SOURCE: TABLE I2

If one now compares this to the responses in item Z7 (TABLE 7.54j), just over 91% of

the respondents agreed (i.e. ‘strongly agree’ or ‘agree’) that professional values, ethics

and attitudes associated with the CPD of CAs are emphasised in the undergraduate

education of CAs at RAU.

TABLE 7.54j: Descriptive analysis: Item Z7 (Section B6)

RESPONSE f %

Strongly agree (1)

Agree (2) 446 91.2

Disagree (3)



professional values, ethics and attitudes

for CPD of CAs.

TOTAL 489 100.0

SOURCE: TABLE I2

Some proposals on the improvement of student perceptions will be discussed in Chapter

9 of this study.

7.8.3 Factor analysis of the items measuring aspects of the

education and training of chartered accountants at RAU

Exploratory factor analysis was performed on the statements in Section B6 using SPSS

with orthogonal varimax rotation and Kaizer normalisation to identify the various

dimensions of the items.

Empirical analysis

CHAPTER 7 326

Even though a KMO value of 0.893 was generated (TABLE 7.55), supporting the

factorability of the correlation matrix, factor analysis could not be performed as only

one factor was extracted and it was therefore impossible to rotate the solution.





Significance .000

SOURCE: SPSS Output



Hypothesis 9:


perception of aspects of the education and training of prospective CAs

at RAU.

H1: There is a difference between male and female respondents in the

perception of aspects of the education and training of prospective CAs

at RAU.


confidence level to test differences between two independent groups (i.e. males and

females) and the results are indicated in TABLE 7.56 on the following page.

Empirical analysis

CHAPTER 7 327


Z1 Z2 Z3 Z4 Z5 Z7 Z8 Z9 Z10

Mann-Whitney

U 27671.5 28171.0 28705.0 29431.5 29735.0 28618.0 26756.0 29403.5 28837.5

Wilcoxon W 59046.5 59296.0 59830.0 60307.5 60611.0 59743.0 57632.0 58323.5 57517.5

Z -1.809 -1.106 -.858 -.148 -.018 -.979 -2.193 -.256 -.677

Asymp. Sig.

(2-tailed) .070 .269 .391 .882 .985 .328 .028* .798 .499

SOURCE: SPSS Output

* p < 0.05

Only one item was statistically significant (i.e. p < 0.05) and the results are therefore

not conclusive for the null hypothesis to be rejected. One may therefore conclude that

there is no difference between male and female respondents in the perception of

aspects of the education and training of prospective CAs at RAU.

7.9 SUMMARY

In previous chapters of this study the importance of the utilisation of CPD of ethics

amongst prospective CAs was shown, using a detailed literature research. It is

important to realise, however, that before any ‘utilisation’ can take place, one should

test the prospective CAs’ (i.e. students’) perceptions of CPD and ethics within the

framework of the profession.

An empirical analysis was then conducted by way of a questionnaire based on the

objectives of the study set out in Chapter 1. The various independent variables

addressed within the questionnaire relate to:

the CA and his/her profession;

the CPD of CAs;

aspects of LLL of CAs;

aspects of ethics education related to CAs;

the core values CAs should demonstrate within their profession; and

Empirical analysis

CHAPTER 7 328

the education of CAs at RAU.

Closer inspection of these, however, brings to the fore a specific logical flow, which can

be expressed by way of the following diagram (FIGURE 7.19):


prospective CAs

The CAprofession*

U1 – U25

The CAprofession*

U1 – U25

CPD and CAs*V1 – V14


LLL and CAsW1 – W9


Ethics and CAs*X1 – X11


Core valuesof CAsY1 – Y8


Educationof CAs

Z1 – Z10

Educationof CAs

Z1 – Z10

4

6

2

5

3

1

* Factor analysis

FIGURE 7.19: CPD of ethics amongst prospective CAs

SOURCE: Empirical analysis, own deductions

This study investigates the utilisation of CPD of ethics amongst prospective CAs. From

FIGURE 7.19 it is proposed that three of the groups of variables analysed in the

empirical study (i.e. variables V, W and X) form the core of CPD of ethics amongst

prospective CAs. However, before that can be attempted one has to take cognisance of

the perceived core values amongst CAs (i.e. variable Y) and how this impacts on the CA

profession as a whole (i.e. variable U) in a time of change and uncertainty.

Empirical analysis

CHAPTER 7 329

Once a sense for ethics, CPD and LLL has been determined amongst prospective CAs,

one may continue and test this in relation to the perception of the education of CAs at

RAU (i.e. variable Z).

Although validity and reliability were not measured through repeated testing of the

instrument, the following issues were observed in the study:

in all tests (where applicable), the Cronbach-alpha coefficient of reliability was

taken into consideration and had to be at least 0,7 or higher (α ≥ 0.7) to be

reliable;

in order to test for content validity, experts and specialists in the study field were

used to validate the tool;

to check for criterion-related validity, various correlation techniques were used in

the analysis of the data; and

as construct validity was of crucial importance in this study, factor analysis was

utilised to determine construct validity.

Section A of the questionnaire, detailing information about the students’ (i.e.

respondents) profile, was analysed in a descriptive manner providing feedback related

to (i) gender; (ii) year the respondent matriculated; and (iii) the respondent’s highest

educational qualification.

All data extracted from Section B of the questionnaire was analysed firstly by way of

an exploratory statistical analysis. This analysis detailed issues such as the presentation

of frequencies, and the measuring of the distribution of data, which includes aspects

such as location (i.e. central tendency), dispersion (i.e. spread) and shape (i.e.

skewness and kurtosis).

This was then followed up by a factor analysis of the various items in each of the sub-

sections in Section B of the questionnaire. Wherever the factor analysis indicated that

various statically significant factors could be extracted, an item analysis on each item

was then performed and appropriate factor scores were calculated and interpreted.

Empirical analysis

CHAPTER 7 330

The appropriate factor scores that were calculated and interpreted were then used to

perform hypothesis testing using the t-test for independent samples. In cases where

factor analysis could not provide adequate information to continue with the calculation

of factor scores and the interpretation of factor items, the Mann-Whitney U Test was

used to test differences between two independent groups as part of the hypothesis

testing.

The various hypotheses developed and tested are summarised in TABLE 7.57 below:

TABLE 7.57: Summary of hypotheses developed and tested

HYPOTHESIS DESCRIPTION OF HYPOTHESIS

Hypothesis 1 There is no difference between prospective male and female CAs in the

perceptual need for competency and professional skills in a period of change.

Hypothesis 2 There is no difference in the perceptions of values, ethics and attitudes for

prospective male and female CAs.

Hypothesis 3 There is no difference in the perceptions of training, education and LLL for

prospective male and female CAs.





Hypothesis 6 There is no difference between male and female CAs in the perception of LLL.



Hypothesis 8 There is no difference between male and female respondents in the perceived

core values within the CA profession.

Hypothesis 9 There is no difference between male and female respondents in the perception of

aspects of the education and training of prospective CAs at RAU.

SOURCE: Empirical analysis

Additional aspects of the results that need highlighting are:

Empirical analysis

CHAPTER 7 331

in addition to acquiring the required theoretical knowledge and skills in order to

be regarded as competent, today's CAs need other skills;

competency also includes various professional values, ethics and attitudes;

the education and training of CAs should:

o provide a foundation of various professional skills and ethical values;

o cultivate a culture of LLL;

o be seen as a process rather than a course;

prospective CAs also need to be skilled in the use of CPD by way of a SDL or PBL

approach;

CAs will be able to focus on continued learning throughout their career if they

have learnt how to engage in SDL as part of their basic undergraduate education

and training; and

these basic education and training programmes should follow an integrated

approach with regard to professional ethics, values and attitudes involving more

than a mere transfer of knowledge.

CAs will be able to focus on continued learning throughout their careers if they have

learnt how to do this as part of their undergraduate education programme. This part of

the education of CAs should cultivate a culture of LLL.

---o0o---

332

CHAPTER 8 Attitudes of undergraduate students

toward continuous professional development of ethics: an analysis

8.1 INTRODUCTION

n Chapter 7, the various groups of variables (or items) included as part of the

empirical analysis of this thesis were statistically analysed, based on the objectives

provided in Chapter 1 of this study. It was also stated that this has to be done to

ensure that one understands how to utilise CPD of ethics amongst prospective CAs. A

further reason for the empirical study was to be certain that students grasp the issues

of CPD and ethics within a holistic context. This chapter now forms the culmination of

the whole study: an analysis of the attitudes of undergraduate accounting students to

the utilisation of CPD of ethics.

The chapter commences with an analysis of the attitudes and perceptions of

undergraduate students toward CPD of ethics by focusing on the six groups of variables

specifically analysed in Chapter 7 of this study. At the end of each of the six analyses,

some summary comments are given. This chapter then continues by way of providing

some thoughts on utilising CPD of ethics amongst prospective CAs.

The chapter concludes with some summary comments.

I

Attitudes of undergraduate students toward continuous

professional development of ethics: an analysis

CHAPTER 8 333

8.2 ATTITUDES OF UNDERGRADUATE STUDENTS TO CONTINUOUS PROFESSIONAL DEVELOPMENT OF ETHICS

As outlined in Chapter 1, the objectives of this study were to:


perceptions;


framework of a CA and his/her undergraduate education;


(iv) analyse certain aspects of the education and training of CAs at RAU.

Within the empirical analysis conducted in Chapter 7, six different groups of variables,

listed below, were identified and used to test students’ attitudes to and perceptions of

these. These variables were:

the CA and his/her profession (Section B1 – 25 items labelled as U1 – U25);

the CPD of CAs (Section B2 – 14 items labelled as V1 – V14);

aspects of LLL of CAs (Section B3 – 9 items labelled as W1 – W9);

aspects of ethics education related to CAs (Section B4 – 11 items labelled as X1

– X11);

the core values CAs should demonstrate within their profession (Section B5 – 8

items labelled as Y1 – Y8); and

the education of CAs at RAU (Section B6 – 10 items labelled as Z1 – Z10).

Flowing from this was the development and testing of various hypotheses, which were:

H1: There is no difference between prospective male and female CAs in a

period of change in the perceived need for competency and professional

skills.



CHAPTER 8 334

H2: There is no difference in the perceptions of values, ethics and attitudes


H3: There is no difference in the perceptions of training, education and LLL



perception of the education and pursuance of CPD.




perception of LLL.




perceived core values within the CA profession.


perception of aspects of the education and training of prospective CAs at

RAU.

In FIGURE 8.1 (on the following page), the information contained in FIGURE 7.19 (in

Chapter 7) was taken and further adapted to include more specific information about

each of the variables. The information highlighted in FIGURE 8.1 includes inter alia

the various factors extracted as well as the hypotheses applicable to each of the

variables.

In TABLES 8.1 – 8.6 (which follow) a summary of the various items from the analysis

of all the variables in Section B of the questionnaire is provided. This includes the

various factors as well as the results of the hypotheses developed and tested,

highlighted by the specific variable taken from FIGURE 8.1.



CHAPTER 8 335

The CAprofession*

U1 – U25

The CAprofession*

U1 – U25







4

2

5

3

* Factor analysis



1

Y6 Y7 Y5

Y8

Y3Y4Y1

Y2U9

F2: Ethcs

U4 U7

U6U20

U12

F3: EdcTrn

U1 U3

U2U10 U13

V10

F1: LrnCPD

V14 V9

V12V5 V11

V13

V8

F2: CrtCPD

V7

V1V3W5 W2 W7

W1

W3

W8W9

W4

W6

X5

F1: EthcEduc

X3 X4

X6X8 X1

X7

U22

F1: CmpSkll

U21 U23

U5U25 U17

Educationof CAs

Z1 – Z10

Educationof CAs

Z1 – Z106

Z8 Z10 Z1

Z2

Z5Z7Z3

Z9

Z4


prospective CAs

H8

H1H2

H3

H4 H5

H6

H7

H9

FIGURE 8.1: Utilising CPD of ethics amongst prospective CAs

SOURCE: FIGURE 7.19

The following interpretation of the empirical analysis done in Chapter 7 is grouped

according to the four objectives of the study and will be discussed as such.



CHAPTER 8 336

8.3 DEMARCATE THE CA AND THE PROFESSION BY WAY OF UNDERGRADUATE STUDENTS’ PERCEPTIONS

8.3.1 The chartered accountant and his/her profession


TABLE 8.1 provides a summary of the

results from the hypotheses (H1 – H3)

developed and tested for Section B1 of

the questionnaire.

In this section of the analysis, it was

possible to extract three specific factors

dealing with the CA and its profession,

namely general competency and skills (CmpSkll); values, ethics and attitudes (Ethcs);

and training, education and LLL (EdcTrn).

8.3.1.2 General competency and skills

In terms of respondents’ perceptions of and attitudes to the need for competency and

professional skills for CAs in a period of change, there seems to be agreement between

males and females on its importance.

At the top of the list was the fact that, in addition to acquiring the relevant theoretical

knowledge and skills, today’s CA needs other professional skills and that the general

education and training of CAs should provide a foundation for these various skills.

8.3.1.3 Values, ethics and attitudes

Unlike general competency and skills (in section 8.3.1.2) for CAs, male and female

respondents differed significantly when it came to the perceptions of values, ethics and

attitudes for CAs.



CHAPTER 8 337

TABLE 8.1: Summary results: Section B1 – The chartered accountant and his/her profession ( )

ITEMS INCLUDED IN STATISTICAL ANALYSIS

FACTORS EXTRACTED

STATISTICAL RESULTS OF

FACTOR ANALYSIS

HYPOTHESES DEVELOPED

STATISTICAL RESULTS OF HYPOTHESES

TESTS

U5 CAs should continually adapt to change.

U17 Competency is a critical issue in the CA’s profession.

U21 In addition to acquiring theoretical knowledge and skills, today's CAs need other skills.

U22 The education of CAs should enable them to adapt to change.

U23 The education of CAs should provide a foundation of various professional skills.

U25 CAs are continuously challenged to maintain competence.

Factor 1:

CmpSkll

Competency and

professional skills of

CAs are necessary in a

period of change

n 491

α 0.779

KMO 0.895

p (< 0.05) 0.000

% variance 28.075

H0:

There is no difference between prospective male and female CAs in a period of change in the perceived need for competency and professional skills.

H1:

There is a difference between prospective male and female CAs in a period of change in the perceived need for competency and professional skills.

H1*

Accept H0

p > 0.05

(p = 0.999)

U4 CAs should have high ethical standards.

U6 The education of CAs should provide a foundation of ethical values.

U7 CAs have an ethical obligation to their clients, employers and stakeholders.

U9 CAs should act in accordance with applicable professional ethical standards.

U20 The competency of CAs also includes their professional values, ethics and attitudes.

Factor 2:

Ethcs

Professional values,

ethics and attitudes

linked to CAs

n 491

α 0.727

KMO 0.895

p (< 0.05) 0.000

% variance 6.749

H0:

There is no difference in the perceptions of values, ethics and attitudes for prospective male and female CAs.

H1:

There is a difference in the perceptions of values, ethics and attitudes for prospective male and female CAs.

H2*

Do not accept H0

p < 0.05

(p = 0.022)



CHAPTER 8 338

TABLE 8.1: Summary results: Section B1 – The chartered accountant and his/her profession ( )


FACTORS EXTRACTED


FACTOR ANALYSIS



TESTS

U1 CAs should learn continuously.

U2 Training programmes for CAs should follow an integrated approach with regard to professional ethics, values and attitudes.

U3 A CA will be able to focus on continued learning throughout his/her career if he/she has learnt how to do this as part of his/her basic training.

U10 A training programme for CAs should be more than a mere transfer of knowledge.

U12 The education of CAs should cultivate a culture of LLL.

U13 The credibility of a CA depends on his/her ethical approach to the work he/she does.

Factor 3:

EdcTrn

Training, education

and LLL of CAs

n 491

α 0.738

KMO 0.895

p (< 0.05) 0.000

% variance 5.535

H0:

There is no difference in the perceptions of training, education and LLL for prospective male and female CAs.

H1:

There is a difference in the perceptions of training, education and LLL for prospective male and female CAs.

H3*

Do not accept H0

p < 0.05

(p = 0.021)

SOURCE: Chapter 7; FIGURE 8.1

* = t-test



CHAPTER 8 339

On the whole, female respondents felt more strongly about all ethical issues regarding

CAs, including CAs’ ethical standards and obligations. This culminated in the view that

the undergraduate education of CAs should provide a foundation of holistic ethical

values.

8.3.1.4 Training, education and lifelong learning

When taking the aspects of values, ethics and attitudes (discussed in section 8.3.1.3

above) further, statistical outcomes are again reaffirmed when the training, education

and LLL of CAs were focused on. Again, female respondents felt more strongly about

these issues and for this reason there was a statistically significant difference in the

perceptions of males and females when it came to training, education and LLL for CAs.

Aspects that respondents highlighted were that an education programme for CAs should

be more than a mere transfer of knowledge: these programmes should follow an

integrated approach with regard to professional ethics, values and attitudes.

8.3.1.5 Some summarising remarks

If today’s CAs need skills other than mere theoretical knowledge, the general education

of CAs should provide a foundation for these, including a foundation of ethical values

provided in such a manner that it cultivates a culture of LLL coupled with CPD. This

foundation should focus more on the exact requirements for being an ethical CA. As

pointed out in Chapter 4, a discussion of ethics should focus on the theories on which

ethics are built, with an emphasis on descriptive ethics, perspective ethics and meta-

ethics. It should also allow the learner to investigate the individual and combined

concepts of morals, ethics and values in an integrated approach. This may then be

highlighted in the view of general and professional ethics by also looking at the issue of

the CA profession itself.

By integrating knowledge and skills across topics and disciplines, it may be possible to

address multifaceted and complex situations typical of professional life, but at the same

time also stimulate undergraduate learners to value learning more when learning is

integrated with the demands of their everyday life, as was pointed out in Chapter 3 of



CHAPTER 8 340

the study. These demands may include the importance of already being skilled in CPD

and LLL at an undergraduate level through the use of SDL and PBL.

8.4 DETERMINE UNDERGRADUATE STUDENTS’ PERCEPTIONS OF CPD, LLL AND ETHICS WITHIN THE FRAMEWORK OF A CA AND HIS/HER UNDERGRADUATE EDUCATION

8.4.1 The continuous professional development of chartered

accountants


TABLE 8.2 provides a summary of the results

from the hypotheses (H4 & H5) developed and

tested for Section B2 of the questionnaire.

In this section of the analysis it was possible to

extract two specific factors dealing with the CPD

of a CA, which included education and

pursuance of CPD (LrnCPD); and the importance of CPD (CrtCPD).

8.4.1.2 Education and pursuance of CPD

On the whole, male and female respondents felt equally strongly about the perceptions

of the education and pursuance of CPD skills for CAs.

Although CPD is aimed at the post-qualification maintenance of professional

competence, CPD should be seen as an extension of the education and learning process

that led to the initial CA qualification. Emphasising the skills surrounding CPD at an

undergraduate level may mean providing a solid foundation for ultimate LLL (as was

pointed out in section 8.3.1.5).



CHAPTER 8 341

TABLE 8.2: Summary results: Section B2 – The continuous professional development of chartered accountants ( )


FACTORS EXTRACTED


FACTOR ANALYSIS



TESTS

V5 The benefits derived from CPD programmes depend on the attitude of the CA.

V9 CPD refers to learning activities following qualification.

V10 The emphasis of CPD means a foundation for LLL.

V11 CPD implies further training in professional values, ethics and attitudes.

V12 CPD is aimed at the post-qualification maintenance of professional competence.

V13 A training programme for CAs should provide students with the necessary skills to learn by themselves and at their own pace.

V14 CPD should be seen as an extension of the education process that leads to the initial qualification as a CA.

Factor 1:

LrnCPD

Educating for and

learning of the CPD of

CAs

n 491

α 0.760

KMO 0.880

p (< 0.05) 0.000

% variance 33.880

H0:

There is no difference between prospective male and female CAs in the perception of the education and pursuance of CPD.

H1:

There is a difference between prospective male and female CAs in the perception of the education and pursuance of CPD.

H4*

Accept H0

p > 0.05

(p = 0.703)



CHAPTER 8 342

TABLE 8.2: Summary results: Section B2 – The continuous professional development of chartered accountants ( )


FACTORS EXTRACTED


FACTOR ANALYSIS



TESTS

V1 The CPD of CAs is critical.

V3 CPD provides an assurance of professional service.

V7 CPD must be a requirement for all CAs in order to maintain the public’s confidence in the profession.

V8 CPD should be a condition of a CA’s continued membership of a professional body.

Factor 2:

CrtCPD

Critical importance of

CPD for CAs

n 491

α 0.710

KMO 0.880

p (< 0.05) 0.000

% variance 8.990

H0:

There is no difference between prospective male and female CAs in the perception of the critical importance of CPD.

H1:

There is a difference between prospective male and female CAs in the perception of the critical importance of CPD.

H5*

Do not accept H0

p < 0.05

(p = 0.034)


* = t-test



CHAPTER 8 343

Respondents also emphasised that for them CPD implies training in professional values,

ethics and attitudes that are unique to the life and work of a CA (also see section

8.4.1.3 below).

It is important to note, however, that respondents agreed very strongly that the

benefits derived from CPD programmes depend on the attitude of the CA. This may

therefore strengthen the notion that an integrated knowledge and skills programme

across topics and disciplines may stimulate undergraduate learners to value LLL and

CPD more when learning is integrated with the typical (ethical) demands of a CA.

8.4.1.3 Importance of continuous professional development

Unlike the learning and teaching of CPD skills mentioned in section 8.4.1.2, male and

female respondents did not perceive the critical importance of CPD equally: female

respondents felt stronger about it.

Amongst other things, CPD (of ethics) for CAs is critical and is a requirement for all CAs

in order to maintain public confidence in the profession. As pointed out in Chapter 3,

all CAs have an ethical obligation of due care to their clients, employers and relevant

stakeholders and need to demonstrate their ability to discharge this responsibility in a

competent manner.


Respondents are not against the use of CPD and feel that it should be a condition of a

CA’s continued membership of a professional body such as SAICA. By inference they

therefore agree that SAICA may refer a member to its Professional Conduct Committee

if a member fails to comply with its CPD requirement.

It is bothersome, however, that some respondents perceived that CPD may provide an

assurance of professional service, which is not the case. As was stated in Chapter 3

(see section 3.2.2.1), SAICA explicitly states that it cannot provide the assurance that

all members will provide high quality professional service all the time if they have

engaged in CPD and that CPD per se cannot and will not avert corporate collapses. As



CHAPTER 8 344

the CA operates in a rapidly changing environment, there is a consequent important

need to adapt the strategic plans for organisations relying on the CA’s professional

competence, highlighting the need for CPD.

8.4.2 Lifelong learning of chartered accountants


TABLE 8.3 provides a summary of the results from

the hypothesis (H6) developed and tested for

Section B3 of the questionnaire.

Due to the non-factorability of the various items in

Section B3 of the questionnaire, individual items were tested for statistical difference

between male and female responses. As there was no general trend of p < 0.05

throughout, the results meant that male and female respondents did not feel different

about issues of LLL and the CA to a statistically significant degree.

8.4.2.2 Perceived core aspects of lifelong learning

Obvious and expected perceptions indicated by respondents were that LLL implies a

desire to go beyond the minimum as well as a continuous refinement of professional

knowledge, skills, values, ethics and attitudes, as was pointed out in section 7.5.1.

The analysis of the various items pertaining to LLL pointed to the aspirations expressed

by respondents in terms of LLL. These holistic aspirations included issues such as the

incorporation of better professional judgement; the desire and ability to adapt and

develop skills that included the professional values, ethics and attitudes associated with

CPD; the desire and ability to continue to learn; and an incorporation of professional

ethical values in one’s ultimate performance as a CA.



CHAPTER 8 345

TABLE 8.3: Summary results: Section B3 – Lifelong learning of chartered accountants ( )


FACTORS EXTRACTED


FACTOR ANALYSIS



TESTS

W1 LLL implies a desire and ability to continue to learn.

W2 LLL implies a continuous refinement of professional knowledge, skills, values, ethics and attitudes.

W3 LLL implies a desire and ability to adapt and develop skills.

W4 LLL implies a thorough foundation of professional values, ethics and attitudes associated with CPD.

W5 LLL implies a desire to go beyond the minimum.

W6 LLL implies a thorough foundation of professional values, ethics and attitudes in an undergraduate environment.

W7 LLL implies a desire to incorporate better professional judgement.

W8 LLL implies a desire to incorporate professional ethical values in performance.

W9 LLL implies a continuous acquisition of ethics as one works in practice after qualification.

No factors were

extracted

Not applicable H0:

There is no difference between prospective male and female CAs in the perception of LLL.

H1:

There is a difference between prospective male and female CAs in the perception of LLL. H6*

Accept H0

p > 0.05**


* = Mann-Whitney U test, 95% confidence level; ** = only one individual item had a p-value < 0.05



CHAPTER 8 346


If, as was perceived by the respondents, LLL implies a thorough foundation of

professional values, ethics and attitudes in an undergraduate environment, it implies

that these values and attitudes should be a crucial and measurable component of the

undergraduate education of a CA. It is important to note that the teaching of

professional values and ethics at an undergraduate level should be seen as a process

rather than a course (to be discussed in section 8.6.1).

The importance of providing prospective CAs with the necessary skills in CPD at an

undergraduate level is therefore again highlighted. LLL may imply a continuous

acquisition of ethics following qualification, during a CA’s time of practice.

8.4.3 Aspects of ethics education related to chartered

accountants


TABLE 8.4 provides a summary of the results from the

hypothesis (H7) developed and tested for Section B4 of

the questionnaire.

In this section of the study it was possible to extract one

specific factor by way of factor analysis dealing with

aspects of ethics education pertaining to a CA

(EthcEduc).

8.4.3.2 Aspects of ethics education

The empirical analysis revealed that there was a statistically significant difference

between male and female respondents in the perception of the advantages of ethics

education. As was the case in all the previous variables, female respondents once

again felt more strongly about it than male respondents.



CHAPTER 8 347

TABLE 8.4: Summary results: Section B4 – Aspects of ethics education related to chartered accountants ( )


FACTORS EXTRACTED


FACTOR ANALYSIS



TESTS

X1 Ethics education heightens a student’s awareness of ethical issues in professional practice.


X4 Ethics education provides a basic understanding of the morals of the profession.


X6 Ethics education provides students with the necessary skills required in practice.


X8 Ethics education provides a competitive advantage for CAs.

Factor 1:

EthcEduc

The advantages

attained by

prospective CAs

through ethics

education

n 491

α 0.835

KMO 0.841

p (< 0.05) 0.000

% variance 57.073

H0:

There is no difference between prospective male and female CAs in the perception of the advantages of ethics education.

H1:

There is a difference between prospective male and female CAs in the perception of the advantages of ethics education.

H7*

Do not accept H0

p < 0.05

(p = 0.003)


* = t-test



CHAPTER 8 348

Respondents felt that ethics education heightens a student’s awareness of ethical issues

in professional practice, strengthens a student’s moral reasoning skills, and enhances a

student’s ability to judge a situation.


Ethics education provides students with the necessary skills required in practice. These

skills may refer to the skills mentioned in section 8.4.2.2, namely professional values,

ethics and attitudes associated with CPD and LLL.

An item that was not included in the analysis was one stating that Ethics education is

the responsibility of the tertiary institution, not the company and its management. (For

more information refer back to sections 7.6.1 and 7.6.2.4.) There was great

consistency in this response from all respondents. They all felt that ethics education is

not merely the responsibility of a higher education institution or the CA firm where the

prospective CA is placed: it is also the CA’s own responsibility to keep abreast of

changes in professional values, ethics and attitudes by way of CPD.

8.5 INVESTIGATE THE PERCEIVED CORE VALUES WITHIN THE CA PROFESSION

8.5.1 Perceived core values within the chartered accountant

profession


TABLE 8.5 provides a summary of the results from

the hypothesis (H8) developed and tested for Section

B5 of the questionnaire. Due to the non-factorability

of the various items in Section B5 of the

questionnaire, individual items were tested for

statistical difference between male and female responses.



CHAPTER 8 349

TABLE 8.5: Summary results: Section B5 – Perceived core values within the chartered accountant profession ( )


FACTORS EXTRACTED


FACTOR ANALYSIS



TESTS

H8* Do not accept H0

p < 0.05***

Y1 How important is it for a CA to learn the skill of CPD?

Y2 How important is it for a CA to be a life-long learner?

Y3 How important is it for a CA to have professional competence?

Y4 How important is it for a CA to have high ethical standards?

Y5 How important is it for a CA to show integrity?

Y6 How important is it for a CA to be trustworthy?

Y7 How important is it for a CA to be reliable? Y8 How important is it for a CA to be objective?

No factors were

extracted

Not applicable H0:

There is no difference between male and female respondents in the perceived core values within the CA profession.

H1:

There is a difference between male and female respondents in the perceived core values within the CA profession. H8**

Do not accept H0

p < 0.05***


* = t-test; ** = Mann-Whitney U test, 95% confidence level

*** = all the individual items had p-values < 0.05



CHAPTER 8 350

As there was no general trend of p < 0.05 throughout, the results meant that male and

female respondents did not feel different about certain perceived core values within the

CA profession to a statistically significant degree.


As respondents differed in their perceptions about aspects of CPD and LLL, one is led to

speculate that the important fundamental aspects of CPD and LLL, as highlighted by

SAICA in Chapter 3, need to be inculcated at a very early stage of education and

training. If education programmes of prospective CAs start this process during the pre-

qualification education phase (i.e. at the undergraduate level) and continue after

qualification, prospective CAs may understand the importance of, and know how to

utilise, the skill of CPD before entering public practice, where there will be an obligatory

engagement with these skills.

8.6 ANALYSE CERTAIN ASPECTS OF THE EDUCATION AND TRAINING OF CAs AT RAU

8.6.1 Aspects of the education and training of chartered

accountants at RAU


TABLE 8.6 provides a summary of the results from the

hypotheses developed and tested for Section B6 of

the questionnaire.

Due to the non-factorability of the various items in

Section B6 of the questionnaire, individual items were tested for statistical difference

between male and female responses. As there was no general trend of p < 0.05

throughout, the results meant that male and female respondents did not feel different

about aspects of the education and training of prospective CAs at RAU to a statistically

significant degree.



CHAPTER 8 351

TABLE 8.6: Summary results: Section B6 – Aspects of the education and training of chartered accountants at RAU ( )


FACTORS EXTRACTED


FACTOR ANALYSIS



TESTS

Z1 The professional values, ethics and attitudes highlighted by professional bodies are apparent in the academic programmes at RAU.

Z2 RAU focuses on courses, which include aspects of professional ethics and values applicable to CAs.

Z3 At RAU, emphasis is placed on the development of professional values, ethics and attitudes in the training of CAs.

Z4 RAU focuses on discipline-specific courses, covering various applicable international issues pertaining to the role of the CA.

Z5 At RAU, emphasis is placed on the development of the necessary skills for CPD of CAs.

Z7 At RAU, emphasis is placed on the professional values, ethics and attitudes for CPD of CAs.

Z8 RAU uses educators who are skilled in the professional values, ethics and attitudes pertaining to CAs.

No factors were

extracted

Not applicable H0:

There is no difference between male and female respondents in the perception of aspects of the education and training of prospective CAs at RAU.

H1:

There is a difference between male and female respondents in the perception of aspects of the education and training of prospective CAs at RAU.

H9* Accept H0

p > 0.05**



CHAPTER 8 352

TABLE 8.6: Summary results: Section B6 – Aspects of the education and training of chartered accountants at RAU ( )


FACTORS EXTRACTED


FACTOR ANALYSIS



TESTS

Z9 A definite focus on recent professional ethical conundrums, corporate collapses and mounting stakeholder pressure is evident in the courses offered at RAU.

Z10 RAU focuses on courses that enhance the value-added approach of CAs.


* = Mann-Whitney U test, 95% confidence level; ** = only one individual item had a p-value < 0.05



CHAPTER 8 353

8.6.1.2 Aspects of education of chartered accountants at RAU

Based on the empirical analysis, there was no statistically significantly difference

between males and females in their perceptions of aspects of the education and

training of prospective CAs at RAU.

It was however clear from the descriptive analysis of the individual items (see section

7.8.2) that respondents agreed that professional values, ethics and attitudes pertaining

to CAs are evident from the courses and academic programmes offered at RAU and that

these are presented by educators skilled in the professional values, ethics and attitudes

pertaining to CAs (see section 7.8.2.1).

In section 7.8.2.3 one noticed that respondents clearly stated that there is not a

definite focus in the courses on recent professional ethical conundrums, corporate

collapses and mounting stakeholder pressure as well as applicable international issues

pertaining to CAs.

Even though respondents felt that enough emphasis is placed on the professional

values, ethics and attitudes for CPD of CAs, they pointed out that more emphasis

should be placed on the development of these professional values, ethics and attitudes

for CPD of CAs.


The analysis shows that respondents agreed that RAU focuses on courses that enhance

the value-added approach of CAs. This confirms the notion expressed in section 8.4.1.2

that an integrated knowledge and skills programme across topics and disciplines may

stimulate undergraduate learners to value LLL and CPD more when learning is

integrated with the demands of a CA. One does however have to qualify this statement

by pointing out that the transfer of knowledge and skills associated with LLL and CPD is

not enough if students are not encouraged to develop these during their undergraduate

studies.



CHAPTER 8 354

8.7 SUMMARY

In previous chapters of this study, the importance of the utilisation of CPD of ethics

amongst prospective CAs was shown, based on detailed literature research. It is

important to realise, however, that before any ‘utilisation’ can take place, one should

test the prospective CAs’ (i.e. students’) perceptions and attitude of CPD and ethics

within the education framework of a CA.

An empirical analysis was then done by way of a questionnaire based on the objectives

of the study set out in Chapter 1. The various independent variables addressed within

the questionnaire related to:

the CA and his/her profession;

the CPD of CAs;

aspects of LLL of CAs;

aspects of ethics education related to CAs;

the core values CAs should demonstrate within their profession; and

the education of CAs at RAU.

Although validity and reliability were not measured through repeated testing of the

instrument, the following issues were observed in the study:

in all tests (where applicable), the Cronbach-alpha coefficient of reliability was

taken into consideration and had to be at least 0,7 or higher (α ≥ 0.7) to be

reliable;

in order to test for content validity, experts and specialists in the fields of study

and statistics were used to validate the tool;

to check for criterion-related validity, various correlation techniques were used in

the analysis of the data; and

as construct validity was of crucial importance in this study, factor analysis was

utilised to determine construct validity.

---o0o---

355

CHAPTER 9 Summary, conclusion and recommendations

9.1 INTRODUCTION

he focus of this study was to determine whether it is possible to utilise CPD of

ethics amongst prospective CAs by assessing their various perspectives.

As accounting educators at higher education institutions have an obligation to respond

to the various changes faced by the accounting profession worldwide, their teaching

should provide learners with a variety of strategies to learn more effectively.

In the education of prospective CAs (i.e. at the undergraduate level), teaching methods

should provide students not only with a basic grounding in the knowledge, skills,

professional values and ethics essential for professional competency but also with the

tools for learning and development after qualification (e.g. CPD and LLL). This means

providing a foundation for LLL, which implies that learners should have the desire and

ability to continue to learn, to adapt and develop new knowledge, skills and

technologies, to move flexibly between occupations, and to take responsibility for

personal performance.

Even though CPD and LLL are seen as a post-qualification aspect, the initial CPD and

LLL of ethics will be strengthened if the process of LLL and CPD for CAs commences

early in their higher education.

T

Summary, conclusion and recommendations

CHAPTER 9 356

9.2 SUMMARY OF THE THESIS

9.2.1 Chapter 1 – Objectives of this study

This study aimed to investigate the utilisation of the CPD of ethics amongst prospective

CAs. The objectives of this study were, by way of an empirical survey, to:


perceptions;


framework of a CA and his/her undergraduate education;


(iv) analyse certain aspects of the education and training of CAs at RAU.

All of the above were researched within the:

international framework of education and training of CAs set by IFAC;

education and training legal framework of the country;

vision and standards of SAQA and the NQF; and

framework for training of CAs set by SAICA and the PAAB.

9.2.2 Chapter 2 – Demarcating an educational framework for the

training of chartered accountants nationally and

internationally

Chapter 2 provided a demarcation of an educational framework for the training of CAs

nationally and internationally. It commenced with an overview of the South African

educational landscape, and ultimately focused on issues pertaining to higher education

and the training and education of CAs in South Africa in terms of the NQF.

This was followed by a historical overview of the CA profession in South Africa,

including a view into the future with the proposed changes prescribed by the newly


CHAPTER 9 357

enacted Auditing Profession Act and the restructuring of the accounting profession in

South Africa.

In an assessment of the state of accounting education, a focus on the dynamic nature

of the accounting profession and the link to the education and training of accountants

worldwide were provided. This included the education and practical experience needs

of prospective CAs; their dynamic profession; the importance of LLL and CPD; and the

importance of competence assessment throughout their education and training phase.

The goal of accounting education (and training) must be to produce competent

professional accountants who, over their lifetimes, make a positive contribution to the

profession and to the society in which they work.

As regards the education and training of CAs, an overview of the international

Education Standards as prescribed by IFAC and SAICA were discussed with specific

reference to the role of the PAAB and the interaction with IFAC. CPD refers to learning

activities that develop and maintain capabilities to enable CAs to perform competently

within their professional environments. It does not stand alone as just another one of

the IFAC Standards but is an integrated approach within the education and training of

CAs. CPD must be seen as an extension of the education process that leads to

qualification as a CA.

9.2.3 Chapter 3 – Continuous professional development through

self-directed learning

Even though CPD is something that CAs will only engage in once they have qualified

(i.e. after the ‘education’ phase), it is important that prospective CAs become au fait

with the skills involved in practising CPD. As was pointed out in Chapter 2, the goal of

accounting education is to produce competent CAs capable of making a positive

contribution over their lifetimes to the profession and society in which they work.

Professional undergraduate education programmes share the goal of preparing

competent graduates who will successfully make the transition to the world of

Chartered Accountancy.


CHAPTER 9 358

Undergraduate accounting education programmes should perhaps be designed to

expose prospective CAs to the strategies that can assist them to develop the abilities to

become self-directed in continuing to learn after qualification, as society demands

continued professional accountability for competence in an era of exponential

knowledge proliferation and technological change. Maintaining this professional

competence in the face of the ever-increasing changes accountants encounter on a

daily basis makes it essential that they develop and maintain an attitude of learning to

learn using CPD.

Supporting LLL requires a suite of complementary approaches including intelligent

teaching systems, design environments, performance support systems, on-demand

learning, coached simulation systems, intelligent help and advisory systems, and

collaborative systems. This chapter focused on the most important approach in support

of LLL, namely supported SDL.

As an introduction the chapter provided a holistic overview of CPD. It also linked CPD

for a (prospective) CA by looking at the links between competence, LLL and SDL. This

chapter provided more than an overview as it also investigated current theories of

learning and provided a historical perspective on SDL. As a conclusion, a South African

perspective on all of this was provided, linking them back to an approach that can be

utilised by prospective CAs at an undergraduate level.

9.2.4 Chapter 4 – A holistic critique of ethics

Ethics and ethical behaviour is receiving greater attention these days as it points to the

importance of maintaining a civil society. Ethical behaviour, however, requires a

consideration of more than a few rules of conduct and some regulatory activities. No

professional code of ethics or regulatory framework can anticipate all the situations that

may arise which require personal judgements about ethical behaviour.

Accordingly, this chapter commenced with a detailed discussion of ethics, focusing on

the theories on which ethics is built. It then went on to investigate the individual and

combined concepts of morals, ethics and values, which included an examination of the


CHAPTER 9 359

integration of these. This was followed by a detailed discussion of the concepts of

general and professional ethics in which the issue of a profession was also looked at.

The chapter then culminated in an investigation of the narrower concept known as

‘business ethics’ (which was discussed in greater detail in Chapter 5) and professional

ethics applicable to CAs.

9.2.5 Chapter 5 – Ethics education

Ethics education has been at the forefront for many years now. But has it made a

difference? Chapter 5 began by asking whether ethics can be taught. It also stated

that the teaching of ethics and business ethics should be seen as the same concept in

terms of this study. The chapter then went on to investigate the various perspectives

of teaching business ethics nationally and abroad, and discussed the teaching of ethics

where the focus is placed on the teaching of business ethics at an undergraduate level.

Various approaches were investigated, and the definition of ethics and the various

theories surrounding it were always taken into account.

The chapter concluded by discussing the criticism of the teaching of business ethics

from a South African perspective as the approaches that were given may not

necessarily work within a South African context.

9.2.6 Chapter 6 – Research methodology

Chapter 6 provided the background to the research methodology that was used in this

study.

This chapter initially provided the reader with some thoughts on research design,

incorporating issues such as qualitative and quantitative research. The quality of

measurement was also discussed, and the issues of reliability and validity specific to this

study were also looked at. The chapter furthermore provided an overview of the design

of the survey instrument, which was then also investigated within the ambit of the

empirical study in Chapter 7.


CHAPTER 9 360

Discussions surrounding issues such as the questionnaire layout, the issue of pre-

testing, sampling approach, administration, data analysis, research ethics and

confidentiality were also provided.

9.2.7 Chapter 7 – Empirical analysis

Chapter 7 continued with a detailed and logical analysis of all the sections of the

questionnaire used in the empirical study.

9.2.8 Chapter 8 – Attitudes of undergraduate students toward

continuous professional development of ethics

Chapter 8 took the findings of the empirical study done in Chapter 7 and interpreted

these in order to determine the attitudes and perceptions of prospective CAs toward

CPD of ethics at an undergraduate level.

9.3 FINDINGS OF THE STUDY

The following is a summary of these findings based on the objectives set for the study

in Chapter 1. These findings are merely summarised here as part of the documentation

of the summary of the study. These have been discussed in great detail in Chapter 8 of

this study.

9.3.1 Demarcate the CA and the profession by way of

undergraduate students’ perceptions

In terms of the CA and his/her profession, it was noted that CAs:

should be regarded as professionals once they have completed the required

basic training;

are continuously challenged to maintain competence;

should act in accordance with applicable professional ethical standards;

should have an ethical obligation to their clients, employers and stakeholders;

should strive to have high ethical standards;

should learn continuously, and their education should encourage a culture of


CHAPTER 9 361

LLL;

will be able to focus on continuous learning throughout their career if they have

learnt how to do this as part of their basic training; and

need more than just a mere transfer of knowledge in a basic education

programme.

9.3.2 Determine undergraduate students’ perceptions of CPD, LLL

and ethics within the framework of a CA and his/her

undergraduate education

In terms of the CPD for CAs it was noted that:

CPD implies further training in professional values, ethics and attitudes;

the benefits derived from CPD programmes depend on the personal attitude of

the CA;

a training programme for CAs should provide students with the necessary skills

to learn by themselves and at their own pace;

CPD for CAs is critical, as it may provide an assurance of professional service;

and

CPD should be a condition of a CA’s continued membership of a professional

body but also to ensure a maintained public confidence in the profession.

In terms of the LLL of CAs it was noted that LLL implies a desire to:

go beyond the minimum by continuing to learn and develop additional skills;

incorporate better professional judgement but also continuously refine

professional knowledge, skills, values, ethics and attitudes; and

incorporate professional ethical values in performance and also a continuous

acquisition of ethics as one works in practice after qualification.

In terms of the ethics education of CAs it was noted that ethics education:

enhances a student’s ability to judge a situation and strengthens a student’s


CHAPTER 9 362

moral reasoning skills;

provides students with the necessary skills required in practice as well as a basic

understanding of the morals of the profession; and

provides a competitive advantage for CAs, as it heightens a student’s awareness

of ethical issues in professional practice.

9.3.3 Investigate the perceived core values within the CA

profession

Based on the perceptions from respondents, it became clear that there are certain core

values that a CA needs within the profession. He/she needs to:

be trustworthy;

be reliable;

show integrity;

be objective;

have professional competence; and

have high ethical standards.

9.3.4 Analyse certain aspects of the education and training of CAs

at RAU

In section 7.8.2 it was mentioned that in only one out of the ten statements posed as

part of the section aspects of the education and training of chartered

accountants at RAU did the majority of respondents indicate a response of ‘strongly

agree’. In the others, more than half of the responses only ‘agreed’.

In section 9.5 some specific recommendations on this issue will be given.

Nonetheless, based on the perceptions from respondents, it is clear that in terms of the

education and training of CAs at RAU, emphasis is placed on the:

development of the necessary skills for CPD of CAs;

professional values, ethics and attitudes for CPD of CAs; and


CHAPTER 9 363

development of professional values, ethics and attitudes in the training of CAs.

9.4 CONCLUSIONS

As was initially shown in this study, the goal of accounting education is to produce

competent CAs capable of making a positive contribution over their lifetimes to the

profession and society in which they work. Professional undergraduate education

programmes share the responsibility of preparing competent graduates who will

successfully make the transition to the world of Chartered Accountancy. To maintain

this professional competence, however, it is essential that CAs develop and maintain an

attitude of ‘learning to learn’ using CPD in striving towards an attitude of LLL.

The empirical study in Chapter 7 clearly showed that undergraduate students’

perceptions of CPD, LLL and ethics tend to be commensurate with the developmental

outcomes mentioned in Chapter 1. They agreed that they should be able to:

reflect on and explore a variety of strategies to learn more effectively in their

undergraduate education phase to become a CA;

participate as responsible citizens in the life of local, national and global

communities by having an in-depth understanding and applicative knowledge of

the professional values, ethics and attitudes pertaining to a CA; and

be culturally and aesthetically sensitive across a range of social contexts,

including within the education they receive as prospective CAs.

Additional aspects of the results from this study that need highlighting are:

in addition to acquiring the required theoretical knowledge and skills in order to

be regarded as competent, today's CAs need other skills;

competency includes various professional values, ethics and attitudes;

the education and training of CAs should:

o provide a foundation of various professional skills and ethical values;

o encourage a culture of LLL;


CHAPTER 9 364

o be seen as a process rather than a course;

education and training should:

o entail prospective CAs being skilled in the use of CPD by way of a SDL or

PBL approach;

o enable CAs to focus on continued learning throughout their career if they

have learnt how to engage in SDL as part of their basic undergraduate

education; and

o follow an integrated approach with regard to professional ethics, values

and attitudes involving more than a mere transfer of knowledge.

9.5 RECOMMENDATIONS

As was discussed in Chapter 3, learning is often defined and measured in terms of

knowledge of facts, concepts or principles. This ‘transfer of knowledge’ should

therefore focus on a process where students are provided with the capacity to continue

to learn outside the formal education environment by way of SDL.

In the descriptive analysis of data taken from Section B6 of the questionnaire,

students only ‘agreed’ that at RAU an emphasis is placed on the development of

professional values, ethics and attitudes in the training of CAs and furthermore an

emphasis on professional values, ethics and attitudes for CPD of CAs.

Educators involved in the undergraduate education of prospective CAs at the UJ can

play an ever more important role in assisting and supporting the eventual CPD process,

by way of:

allowing prospective CAs to be better self-directed learners by providing

opportunities for self-direction in group activities; and

providing assistance to individual self-directed learners in attempting the CPD of

ethics.


CHAPTER 9 365

As was pointed out in section 5.5.6 of this study, current realities at the UJ, which

include the current infrastructure and excessive student numbers, do not allow for the

effective use of group activities or providing individual assistance to students, for

example.

For the greatest lasting effect, teaching prospective CAs in the steps of SDL in

completing a CPD activity should be done as frequently as possible in the

undergraduate education programmes of CAs, but it could also be incorporated into

specific CPD events. Examples may include:

providing workshops on searching the literature effectively in order to gain the

required knowledge and skill;

explicitly demonstrating critical appraisal during CPD lectures; and

using problem-based assessment that requires CPD participants to apply the

acquired knowledge in practice. Some regularly used CPD formats may already

emphasise learner control (which was discussed in section 3.3.4) – for example,

case-based learning, traineeships, practice audit and review and the use of

learning portfolios.

All prospective CAs should incorporate some or all of the components of self-direction

with the preparation to participate in CPD. The SDL or PBL construct is primarily based

on the individual learner’s attitudes and values, while it must still be acknowledged that

the objectives of LLL are related to the individual learner’s responsibility and work-force

development, and also that individual learners’ differences have to be taken into

account (see sections 3.3.5.4 and 3.3.8).

As was shown in section 3.2.2.1, SAICA also feels that higher education institutions

should encourage the development of LLL by, inter alia, making learners take

responsibility for their own learning and become active participants in the learning

process.


CHAPTER 9 366

An encouragement to use SDL may be that CPD participation can reward and

encourage learners through accreditation of these learner-managed activities. Section

5.4.7.4 stated that an active learning experience may be perceived as interesting and

even exciting by students. An active learning approach may also encourage students to

be active participants in the whole learning process (section 3.2.1).

Educators can furthermore encourage CPD and LLL by creating a climate of inquiry and

reflection as part of the teaching and learning process. They can assist students to

clarify their questions, locate resources and evaluate the information acquired.

Educators can role-model their own SDL/LLL and can provide feedback that encourages

self-direction.

Allowing undergraduate students to engage in activities that promote CPD and LLL

through SDL may mean that the UJ will be able to focus more on courses that include

aspects of professional ethics and values applicable to CAs, thereby providing the

undergraduate student with an enhanced value-added approach to learning and

learning to learn.

CAs will be able to focus on the continued acquiring of aspects of ethics throughout

their career if they have learnt how to do this as part of their undergraduate education

programme. Section 5.5.2 accepted that the required ‘technical detail’ needs to be

taught to undergraduate students as part of the CA curriculum. Incorporating and

integrating business ethics into the CA curriculum is fundamental. However, as was

pointed out, this should not be viewed as an ‘add on’ to an already-crowded curriculum

whereby a superficial overview of aspects of professional values, ethics and attitudes

are merely ‘included’ but not ‘incorporated’ into the curriculum. This therefore also

means that the teaching of business ethics should, by default, be done by academics

within the Department of Accounting and not necessarily by someone with extensive

knowledge of ethics – the focus here should be on business ethics and not just ethics

per se.


CHAPTER 9 367

9.6 SCOPE FOR FURTHER RESEARCH

This study was exploratory in nature, and this therefore implies that many of the

findings have to be explored further. Very often the study found that undergraduate

students had very peculiar perceptions of CPD, LLL and ethics. It may be of interest for

these perceptions to be researched in terms of the underlying phenomena present.

The questionnaire that was developed for this study may also be taken forward and

used in a longitudinal study of perceptions amongst undergraduate students towards

CPD, LLL and ethics.

A further aspect that needs urgent attention is research amongst auditing lecturers at

higher education institutions and their understanding of the need to teach ethics and

the best way to do it.

---o0o---

368

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413

APPENDIX A

APPENDIX A 414

Please note that certain terms have been highlighted for cross-referencing purposes.

TABLE A1: Glossary of terms

Assessment All forms of tests of professional competence, whether in writing or

otherwise, including examinations, carried out at any time throughout the

learning process.

Candidate Any individual who is enrolled for assessment as part of a professional

accountancy education program.

A candidate is an individual who is undergoing, or about to undergo, a formal assessment

as part of accountancy education. The term refers to an individual who is still in the

process of demonstrating the capabilities or competences required for a particular purpose

(e.g. professional examination). The assessment may relate to either a programme for

qualifying as a professional (chartered) accountant or a post-qualifying education

programme. The term does not relate to an individual at the stage following completion

of an education programme (i.e., it excludes those who have completed the requirements

for membership of a professional body and are in the process of applying for

membership).

Capabilities The professional knowledge; professional skills; and professional values,

ethics, and attitudes required to demonstrate competence.

Capabilities are the attributes held by individuals that enable them to perform their roles,

whereas competence refers to the actual demonstration of performance. The possession

of capabilities gives an indication that an individual has the ability to perform competently

in the workplace. Capabilities include content knowledge; technical and functional skills;

behavioural skills; intellectual abilities (including professional judgement); and professional

values, ethics, and attitudes. They are sometimes referred to, in other literature, as

competencies, capacities, abilities, key skills, core skills, fundamental skills and values,

attitudes, distinguishing characteristics, pervasive qualities, and individual attributes.

Competence Being able to perform a work role to a defined standard, with reference

to real working environments.

Competence refers to the demonstrated ability to perform relevant roles or tasks to the

required standard. Whereas capability refers to the attributes held by individuals that give

them the potential to perform, competence refers to the actual demonstration of

performance. Competence may be assessed by a variety of means, including workplace

performance, workplace simulations, written and oral tests of various types, and self-

assessment.

APPENDIX A 415

Continuing

Professional

Development

(CPD)

Learning activities for developing and maintaining the capabilities of

professional accountants to perform competently within their

professional environments.

Continuing (or continuous) professional development is aimed at the post-qualification

development and maintenance of professional competence. It involves the development

of capabilities through either formal and verifiable learning programmes (sometimes

referred to as “continuing professional education”) – CPE or informal learning activity.

Development 1. The acquisition of capabilities, which contribute to competence.

2. The state at which capabilities have been acquired.

Development, as a process, refers to the growth of capabilities, which contribute to

competence, however achieved. Individuals may develop their abilities through a wide

range of processes such as learning, including education and training; experience;

reflection; observation or receipt of information; or through natural growth over time.

Development may also refer to the final stage of growth at which an individual is

considered to be fully developed, as a result of the development process. However, it is

recognised that, with the need for continual learning, the process of developing one’s

capabilities and the subsequent reaching of a targeted stage of development are not fixed

or permanent states.

Education A systematic process aimed at developing knowledge, skills, and other

capabilities within individuals. It includes “training.”

Education is a systematic learning process whereby individuals develop capabilities

considered desirable by society. Education is usually characterised by the growth of an

individual’s mental and practical abilities, as well as maturing in attitude, resulting in his or

her enhanced ability to function and contribute to society, in either specific or non-specific

contexts. While often conducted in academic environments, education also includes

systematic learning processes in other environments, such as on-the-job and off-the-job

training. Education is, by its nature, somewhat planned and structured and therefore

excludes casual, unsystematic learning and developmental processes.

Good practice Those elements considered essential to the education and development

of professional accountants and performed at a standard necessary to

the achievement of competence.

“Good practice” relates not only to the range of content and processes of education and

development programmes, but also to the level or standard at which they are performed

(i.e., the depth and quality of the programmes). The IFAC Education Committee is

conscious of the wide diversity of culture; language; and educational, legal, and social

APPENDIX A 416

systems in the countries of the member bodies and of the variety of functions performed

by accountants. Different factors within these environments may cause variation in the

ability of member bodies to adopt some aspects of “good practice.” Nevertheless, member

bodies should continuously aspire to “good practice” and achieve it wherever possible.

Higher

education

Education beyond secondary school level, usually at universities or

colleges.

Primary and secondary education refers to the mainly compulsory element of schooling

required by the governments of many countries. “Higher” education refers to a third

order of education, which succeeds secondary education and for which a secondary

education qualification (or equivalent) is often a prerequisite. It is at a higher level than

“higher secondary” or “upper secondary” education and is sometimes referred to as

“tertiary education.”

Information

technology

Hardware and software products, information system operations and

management processes, and the human resources and skills required to

apply those products and processes to the task of information production

and information system development, management and control.

Learning A broad range of processes whereby an individual acquires capabilities.

Learning can be achieved by systematic and relatively formal processes such as education

(including training) or processes such as day-to-day work experience, reading published

material, observation, and reflection, for which the process of acquiring capabilities tends

to be less systematic and relatively informal.

Post-

qualification

The period after qualification as an individual member of an IFAC

member body such as SAICA.

The term “post-qualification” is usually associated with activities and requirements relating

to the professional development of those who have already obtained a professional

qualification. It is often associated with activities relating to the maintenance or further

development of professional competence. While “post-qualification” refers to the period

after qualifying as a professional accountant, the term is not restricted to formal

qualifications obtained after qualifying as a professional accountant.

Practical

experience

Work experience undertaken by a trainee or a qualified professional

accountant that is relevant to the work of professional accountants.

The programme of experience enables the individual’s development of

professional competence (including professional behaviour) in the

workplace and provides a means whereby individuals can demonstrate

the achievement of professional competence in the workplace.

APPENDIX A 417

Pre-

qualification

The period before qualification as an individual member of an IFAC

member body.

The term “pre-qualification” is usually associated with activities and requirements relating

to the development of those who have not yet obtained a professional qualification.

Professional

accountant

A person who is a member of an IFAC member body. For the purposes

of this study, only chartered accountants will be used as an example.

Professional

accountancy

education

Education that builds on general education and imparts professional

knowledge, professional skills, and professional values, ethics, and

attitudes. It may or may not take place in an academic environment.

Professional

knowledge

Those topics that make up the subject of accountancy as well as other

business disciplines that together, constitutes the essential body of

knowledge for professional accountants.

Professional

skills

The various types of abilities required to apply professional knowledge,

and professional values, ethics, and attitudes appropriately and effectively

in a professional context.

Professional accountants are required to possess a range of skills, including technical and

functional skills, organisational and business management skills, personal skills,

interpersonal and communication skills, a variety of intellectual skills, and skills in forming

professional judgements.

Professional

values, ethics

and attitudes

The professional behaviour and characteristics that identify professional

accountants as members of a profession. They include the principles of

conduct (i.e., ethical principles) generally associated with, and considered

essential in defining the distinctive characteristics of, professional

behaviour.

Professional values, ethics, and attitudes include a commitment to technical competence,

ethical behaviour (e.g., independence, objectivity, confidentiality, and integrity),

professional manner (e.g., due care, timeliness, courteousness, respect, responsibility,

and reliability), pursuit of excellence (e.g., commitment to continual improvement and

lifelong learning), and social responsibility (e.g., awareness and consideration of the public

interest).

Qualification Qualification as a professional accountant means, at a given point in time,

an individual is considered to have met, and continues to meet, the

requirements for recognition as a professional accountant.

APPENDIX A 418

Qualification is the formal recognition of an individual as having attained a professional

designation, or having been admitted to a class of professional membership, that signifies

that the individual is a professional accountant. Qualification implies that the individual

has been assessed as competent in terms of meeting the requirements prescribed for

obtaining professional accountant status. While the term “qualification” can be applied to

various stages of professional development and classes of membership, its usage in IFAC

Education Committee documents (unless otherwise indicated) relates to the benchmark

for recognition as a professional accountant.

Student An individual following a course of study, including a trainee.

In the context of professional education, a student is an individual undertaking a course or

programme of study deemed necessary for the education of professional accountants,

whether general or professional in nature.

Trainee An individual undertaking pre-qualification work experience and training

within the workplace.

A trainee is an individual who is undertaking a practical experience or workplace training

programme for qualification as a professional accountant.

Training Pre- and post-qualification educational activities, within the context of the

workplace, aimed at bringing a student or professional accountant to an

agreed level of professional competence.

Training includes workplace-based education and experience activities for developing an

individual’s competence to perform tasks relevant to the role of the professional

accountant. Training may be undertaken while an individual performs actual tasks (on-

the-job training) or indirectly through instruction or workplace simulation (off-the-job

training). Training is conducted within the context of the workplace, with reference to the

specific roles or tasks performed by professional accountants. It can include any activity

purposefully designed to improve the ability of an individual to fulfil the practical

experience requirements for qualification as a professional accountant.

SOURCE: IFAC, 2003a: 14-24

* Terms are highlighted for cross-referencing purposes

---o0o---

419

APPENDIX B

APPENDIX B 420

DEPARTMENT OF ACCOUNTANCY

Project Ω

EMPIRICAL STUDY FOR RESEARCH PURPOSES

For many years RAU has been at the forefront in the training of chartered accountants and it is

committed to ensuring the continued high standards of education in the training and education of

chartered accountants. Much research is still needed to understand and improve the way potential

chartered accountants are educated and trained.

Over the past years learning has also not been confined to a classroom and textbooks. In order to

ensure that all chartered accounting students experience a practical approach to their course,

Project Omega has been incorporated into the course curriculum. Project Omega requires

students to “learn” in a way other than by studying for an examination or a test.

This questionnaire has been designed to elicit students’ opinions about certain aspects of learning

as well as ethics within the profession. As Project Omega can be classified as a form of

experiential learning, the questionnaire will also deals with some aspects of ethics and learning.

This questionnaire forms part of a research project being done by RAU in conjunction with the

South African Institute of Chartered Accountants (SAICA) and focuses on ethics, learning and

continuous professional development. The researcher is a senior lecturer in the Department of

Accountancy and the data collected with this questionnaire will be used for the completion of a

doctoral thesis on the issue of ethics and continuous professional development.

After the completion of Project Omega, you will be asked to complete a follow-up questionnaire.

Details of this part of the research will be given at a later stage.

APPENDIX B 421

INSTRUCTIONS

Please complete this questionnaire as honestly and truthfully as you can. We are

interested in your opinion and hence there is no correct or wrong answer to any

opinion-related question.

The personal information requested from respondents at the beginning of the

questionnaire is required for statistical and comparative purposes ONLY. No

information of any nature will be divulged to anybody other than the researcher.

Your input is very important to us!

All questions, where applicable, relate to the various courses (i.e. Accounting,

Auditing, Financial Management and Tax) included in the first semester of all

B.Com (Accounting) third-year students.

APPENDIX B 422

SECTION A 1. What is your student number?

(This information will only be used to facilitate comparisons. Your response will be treated confidentially.)

2. What is your gender? (Please mark with

an .) Male (M) Female (F)

3. In which year did you matriculate?

I took the subject at

4. For each of the following subjects, indicate (using an ) whether you took the subject at higher or standard grade or not at all. If you took the subject, indicate the final symbol you obtained in matric in the space provided.

I did not take the subject.

HG SG

Symbol obtained

Accounting 11 21 31 41

Mathematics 12 22 32 42

Afrikaans First Language 13 23 33 43

Afrikaans Second Language 14 24 34 44

English First Language 15 25 35 45

English Second Language 16

26 36

46

5. In which year did you commence with your

under-graduate studies?

Grade 12 1

Post-school diploma 2

Post-school certificate 3

Undergraduate degree 4

6. What is currently your highest educational qualification? (Please mark with an .)

Post-graduate degree 5

APPENDIX B 423

SECTION B

The following questions relate to some general statements regarding chartered

accountants and its profession. Consider each of the following statements and then

indicate the extent to which you agree / disagree with the statement. Judge each statement

using the following 4-point scale where Strongly agree = 1; Agree = 2; Disagree = 3; and

Strongly disagree = 4.

STATEMENT

Str

on

gly

ag

ree

Ag

ree

Dis

ag

ree

Str

on

gly

d

isag

ree

7. Chartered accountants should learn continuously. 1 2 3 4

8. Training programmes for chartered accountants should follow an

integrated approach with regard to professional ethics, values and

attitudes.

1 2 3 4

9. A chartered accountant will be able to focus on continued learning

throughout his/her career if he/she learnt how to do this as part of

his/her training.

1 2 3 4

10. Chartered accountants should have high ethical standards. 1 2 3 4

11. Chartered accountants should continually adapt to change. 1 2 3 4

12. The education of chartered accountants should provide a foundation of

ethical values.

1 2 3 4

13. Chartered accountants have an ethical obligation to their clients,

employers and stakeholders.

1 2 3 4

14. Chartered accountants are regarded as professionals once they have

completed the required basic training.

1 2 3 4

15. Chartered accountants should act in accordance with applicable

professional ethical standards.

1 2 3 4

16. A training programme for chartered accountants should be more than a

mere transfer of knowledge.

1 2 3 4

17. A professional chartered accountant is the same as an ethical chartered

accountant.

1 2 3 4

18. The education of chartered accountants should cultivate a culture of life-

long learning.

1 2 3 4

19. The credibility of chartered accountants depends on an ethical approach

to the work they do.

1 2 3 4

20. Chartered accountants only need sufficient theoretical knowledge for

qualification purposes.

1 2 3 4

21. The teaching of professional values and ethics at an under-graduate

level should be seen as a process rather than a course.

1 2 3 4

22. The education of chartered accountants should provide a basic

foundation of knowledge.

1 2 3 4

23. Competency is a critical issue in the chartered accountant’s profession. 1 2 3 4

24. Chartered accountants are trusted professionals. 1 2 3 4

APPENDIX B 424

STATEMENT

Str

on

gly

ag

ree

Ag

ree

Dis

ag

ree

Str

on

gly

d

isag

ree

25. The education of chartered accountants should only entail relevant

theoretical knowledge at a given point in time.

1 2 3 4

26. The competency of chartered accountants also includes their

professional values, ethics and attitudes.

1 2 3 4

27. In addition to acquiring theoretical knowledge and skills, today's

chartered accountants need other skills.

1 2 3 4

28. The education of chartered accountants should enable them to adapt to

change.

1 2 3 4

29. The education of chartered accountants should provide a foundation of

various professional skills.

1 2 3 4

30. Chartered accountants enable organisations to shape their financial

future.

1 2 3 4

31. Chartered accountants are continuously challenged to maintain

competence.

1 2 3 4

APPENDIX B 425

The following questions relate to aspects of continuous professional development of

chartered accountants. Consider each of the following statements and then indicate the

extent to which you agree / disagree with the statement. Judge each statement using the

following 4-point scale where Strongly agree = 1; Agree = 2; Disagree = 3; and Strongly

disagree = 4.

STATEMENT

Str

on

gly

ag

ree

Ag

ree

Dis

ag

ree

Str

on

gly

d

isag

ree

32. The continuous professional development of chartered accountants is

critical.

1 2 3 4

33. Recent corporate collapses (e.g. Enron) can be attributed to the

unethical behaviour of chartered accountants.

1 2 3 4

34. Continuous professional development provides an assurance of

professional service.

1 2 3 4

35. The continuous professional development of chartered accountants will

avert corporate collapses.

1 2 3 4

36. The benefits derived from continuous professional development

programmes depend on the attitude of the chartered accountant.

1 2 3 4

37. Continuous professional development means realigning one’s

professional values and attitudes.

1 2 3 4

38. Continuous professional development must be a requirement for all

chartered accountants in order to maintain the public’s confidence in

the profession.

1 2 3 4

39. Continuous professional development should be a condition of a

chartered accountant’s continued membership to a professional body.

1 2 3 4

40. Continuous professional development refers to learning activities

following qualification.

1 2 3 4

41. The emphasis of continuous professional development means a

foundation for lifelong learning.

1 2 3 4

42. Continuous professional development implies further training in

professional values, ethics and attitudes.

1 2 3 4

43. Continuous professional development is aimed at the post-qualification

maintenance of professional competence.

1 2 3 4

44. A training programme for chartered accountants should provide

students with the necessary skills to learn by themselves and at their

own pace.

1 2 3 4

45. Continuous professional development should be seen as an extension of

the education process that led to the initial qualification as a chartered

accountant.

1 2 3 4

APPENDIX B 426

The following questions relate to aspects of lifelong learning of chartered accountants.

Consider each of the following statements and then indicate the extent to which you agree /

disagree with the statement. Judge each statement using the following 4-point scale where

Strongly agree = 1; Agree = 2; Disagree = 3; and Strongly disagree = 4.

STATEMENT

Str

on

gly

ag

ree

Ag

ree

Dis

ag

ree

Str

on

gly

d

isag

ree

Lifelong learning implies a …

46. desire and ability to continue to learn. 1 2 3 4

47. continuous refinement of professional knowledge, skills, values, ethics

and attitudes.

1 2 3 4

48. desire and ability to adapt and develop skills. 1 2 3 4

49. thorough foundation of professional values, ethics and attitudes

associated with continuous professional development.

1 2 3 4

50. desire to go beyond the minimum. 1 2 3 4

51. thorough foundation of professional values, ethics and attitudes in an

under-graduate environment.

1 2 3 4

52. desire to incorporate better professional judgement. 1 2 3 4

53. desire to incorporate professional ethical values in performance. 1 2 3 4

54. continuous acquisition of ethics as one works in practice after

qualification.

1 2 3 4

APPENDIX B 427

The following questions concern aspects of ethics related to chartered accountants.

Consider each of the following statements and then indicate the extent to which you agree /

disagree with the statement. Judge each statement using the following 4-point scale where

Strongly agree = 1; Agree = 2; Disagree = 3; and Strongly disagree = 4.

STATEMENT

Str

on

gly

ag

ree

Ag

ree

Dis

ag

ree

Str

on

gly

d

isag

ree

55. Ethics education heightens a student’s awareness of ethical issues

in professional practice.

1 2 3 4

56. Ethics is a gut feel that everybody is born with. 1 2 3 4

57. Ethics education strengthens a student’s moral reasoning skills. 1 2 3 4

58. Ethics education provides a basic understanding of the morals of

the profession.

1 2 3 4

59. Ethics education enhances a student’s ability to judge a situation. 1 2 3 4

60. Ethics education provides students with the necessary skills

required in practice.

1 2 3 4

61. Ethics education is a “moral conversion process”. 1 2 3 4

62. Ethics education provides a competitive advantage for chartered

accountants.

1 2 3 4

63. Ethics education is the responsibility of the tertiary institution, not

the company and its management.

1 2 3 4

64. Professional ethics is a contradiction. 1 2 3 4

65. There is no need for ethics education in the under-graduate training

of chartered accountants.

1 2 3 4

APPENDIX B 428

Chartered accountants should demonstrate/have certain core values within their profession.

How important do you believe each of the following core values is? Indicate your answer

using the scale provided where Not important = 1; Somewhat important = 2; Important = 3;

and Very important = 4.

STATEMENT No

t im

po

rtan

t

So

mew

hat

imp

ort

an

t

Imp

ort

an

t

Very

im

po

rtan

t

How important is it for a chartered accountant to …

66. learn the skills of continuous professional development? 1 2 3 4

67. be a life-long learner? 1 2 3 4

68. have professional competence? 1 2 3 4

69. have ethical standards? 1 2 3 4

70. show integrity? 1 2 3 4

71. be trustworthy? 1 2 3 4

72. be reliable? 1 2 3 4

73. be objective? 1 2 3 4

APPENDIX B 429

The following questions relate to aspects of the education of chartered accountants at

the Rand Afrikaans University. Consider each of the following statements and then

indicate the extent to which you agree / disagree with the statement. Judge each statement

using the following 4-point scale where Strongly agree = 1; Agree = 2; Disagree = 3; and

Strongly disagree = 4.

STATEMENT

Str

on

gly

ag

ree

Ag

ree

Dis

ag

ree

Str

on

gly

d

isag

ree

74. The professional values, ethics and attitudes highlighted by

professional bodies are apparent in the academic programmes at RAU.

1 2 3 4

75. RAU focuses on courses, which include aspects of professional ethics

and values applicable to chartered accountants.

1 2 3 4

76. At RAU, emphasis is placed on the development of professional

values, ethics and attitudes in the training of chartered accountants.

1 2 3 4

77. RAU focuses on discipline-specific courses, covering various applicable

international issues pertaining to the role of the chartered accountant.

1 2 3 4

78. At RAU, emphasis is placed on the development of the necessary skills

for continuous professional development of chartered accountants.

1 2 3 4

79. RAU offers courses that provide skills necessary in the application

computer software.

1 2 3 4

80. At RAU, emphasis is placed on the professional values, ethics and

attitudes for continuous professional development of chartered

accountants.

1 2 3 4

81. RAU uses educators who are skilled in the professional values, ethics

and attitudes pertaining to chartered accountants.

1 2 3 4

82. A definite focus on recent professional ethical conundrums, corporate

collapses and mounting stakeholder pressure is evident in the courses

offered at RAU.

1 2 3 4

83. RAU focuses on courses to enhance the value-added approach of

chartered accountants.

1 2 3 4

THANK YOU FOR PARTICIPATING!

430

APPENDIX C

APPENDIX C 431

TABLE C1: Student profile distributed by gender

Frequency

( f )

Percent

(%)

Valid Percent

(%)

Cumulative

Percent (%)

Male 241 49.1 49.1 49.1

Female 250 50.9 50.9 100.0

Valid

TOTAL 491 100.0 100.0

SOURCE: SPSS Output

TABLE C2: Year of matriculation according to respondents

Frequency

( f )

Percent

(%)

Valid Percent

(%)

Cumulative

Percent (%)

Valid 1972 1 0.2 0.2 0.2

1986 1 0.2 0.2 0.4

1989 3 0.6 0.6 1.0

1991 1 0.2 0.2 1.2

1992 4 0.8 0.8 2.0

1994 2 0.4 0.4 2.5

1995 3 0.6 0.6 3.1

1996 7 1.4 1.4 4.5

1997 10 2.0 2.0 6.5

1998 12 2.4 2.5 9.0

1999 44 9.0 9.0 18.0

2000 100 20.4 20.4 38.4

2001 301 61.3 61.6 100.0

Total 489 99.6 100.0

Missing 2 0.4

TOTAL 491 100.0

SOURCE: SPSS Output

APPENDIX C 432

TABLE C3: Year matriculated * Gender Cross-tabulation

Gender

Male Female Total

1972 1 0 1

1986 1 0 1

1989 1 2 3

1991 1 0 1

1992 1 3 4

1994 1 1 2

1995 3 0 3

1996 3 4 7

1997 5 5 10

1998 6 6 12

1999 24 20 44

2000 51 49 100

Year matriculated

2001 142 159 301

Total 240 249 489

SOURCE: SPSS Output

(n = 489; two respondents did not provide this information)

TABLE C4: Educational qualification * Gender Cross-tabulation

Gender

Male Female Total

Grade 12 219 223 442

Post-school diploma 10 9 19

Post-school certificate 2 2 4

Under-graduate degree 9 16 25

Educational

qualification

Post-graduate degree 1 0 1

Total 241 250 491

SOURCE: SPSS Output

---o0o---

433

APPENDIX D

APPENDIX D 434

TABLE D1a: Descriptive statistics – Section B, Area 1

(Item 7 [U1] – Item 19 [U13])

U1 U2 U3 U4 U5 U6 U7 U8 U9 U10 U11 U12 U13

Valid 490 490 490 491 491 491 491 491 491 491 491 491 491 N

Missing 1 1 1 0 0 0 0 0 0 0 0 0 0

Range 3 2 3 2 3 3 2 3 1 3 3 3 2

Minimum 1 1 1 1 1 1 1 1 1 1 1 1 1

Maximum 4 3 4 3 4 4 3 4 2 4 4 4 3

Mean 1.42 1.49 1.60 1.17 1.39 1.46 1.19 1.62 1.24 1.38 2.12 1.70 1.51

Median 1.00 1.00 2.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 2.00 2.00 1.00

Mode 1 1 1(a) 1 1 1 1 1 1 1 2 2 1

Standard deviation .557 .516 .629 .395 .517 .589 .406 .720 .430 .568 .931 .585 .597

Variance .310 .267 .395 .156 .268 .347 .165 .518 .185 .323 .868 .342 .356

Skewness 1.095 .236 .694 2.029 .837 .988 1.879 .847 1.193 1.298 .402 .301 .700

Standard error of

skewness .110 .110 .110 .110 .110 .110 .110 .110 .110 .110 .110 .110 .110

Kurtosis 1.414 -1.523 .232 3.009 .005 .620 2.334 -.118 -.579 1.429 -.753 .081 -.471

Standard error of

kurtosis .220 .220 .220 .220 .220 .220 .220 .220 .220 .220 .220 .220 .220

SOURCE: SPSS Output

* (a) Multiple modes exist; the smallest value is shown.

APPENDIX D 435

TABLE D1b: Descriptive statistics – Section B, Area 1

(Item 20 [U14] – Item 31 [U25])

U14 U15 U16 U17 U18 U19 U20 U21 U22 U23 U24 U25

Valid 490 491 488 490 491 490 491 491 491 489 490 490 N

Missing 1 0 3 1 0 1 0 0 0 2 1 1

Range 3 3 3 2 3 3 3 2 2 2 3 3

Minimum 1 1 1 1 1 1 1 1 1 1 1 1

Maximum 4 4 4 3 4 4 4 3 3 3 4 4

Mean 2.96 1.74 1.80 1.38 1.55 2.81 1.54 1.38 1.45 1.45 1.58 1.50

Median 3.00 2.00 2.00 1.00 1.00 3.00 2.00 1.00 1.00 1.00 2.00 1.00

Mode 3 2 2 1 1 3 1 1 1 1 2 1

Standard deviation .885 .642 .658 .530 .679 .774 .557 .519 .530 .519 .589 .573

Variance .784 .413 .434 .280 .461 .598 .310 .269 .281 .269 .346 .328

Skewness -.595 .482 .580 .958 1.052 -.449 .455 .842 .514 .406 .504 .745

Standard error of

skewness .110 .110 .111 .110 .110 .110 .110 .110 .110 .110 .110 .110

Kurtosis -.310 .188 .736 -.200 .666 .022 -.388 -.543 -1.036 -1.327 -.306 .307

Standard error of

kurtosis .220 .220 .221 .220 .220 .220 .220 .220 .220 .220 .220 .220

SOURCE: SPSS Output

APPENDIX D 436

TABLE D2: Frequency distribution – Section B, Area 1 [U]

VALID RESPONSES

Strongly agree (1)

Agree (2)

Disagree (3)

Strongly disagree (4) M

ISSI

NG

R

ESP

ON

SE

TOTAL STATEMENT

f % V % C % f % V % C % f % V % C % f % V % C % f f %

U1 Chartered accountants should learn continuously. 296 60.3 60.4 60.4 184 37.5 37.6 98.0 7 1.4 1.4 99.4 3 .6 .6 100.0 1 491 100.0

U2 Training programmes for chartered accountants should follow an integrated approach with regard to professional ethics, values and attitudes.

256 52.1 52.2 52.2 230 46.8 46.9 99.2 4 .8 .8 100.0 1 491 100.0

U3 A chartered accountant will be able to focus on continued learning throughout his/her career if he/she learnt how to do this as part of his/her training.

229 46.6 46.7 46.7 229 46.6 46.7 93.5 29 5.9 5.9 99.4 3 .6 .6 100.0 1 491 100.0

U4 Chartered accountants should have high ethical standards.

409 83.3 83.3 83.3 79 16.1 16.1 99.4 3 .6 .6 100.0 491 100.0

U5 Chartered accountants should continually adapt to change.

304 61.9 61.9 61.9 182 37.1 37.1 99.0 4 .8 .8 99.8 1 .2 .2 100.0 491 100.0

U6 The education of chartered accountants should provide a foundation of ethical values.

286 58.2 58.2 58.2 185 37.7 37.7 95.9 18 3.7 3.7 99.6 2 .4 .4 100.0 491 100.0

APPENDIX D 437

VALID RESPONSES

Strongly agree (1)

Agree (2)

Disagree (3)


ISSI

NG

R

ESP

ON

SE

TOTAL STATEMENT

f % V % C % f % V % C % f % V % C % f % V % C % f f %

U7 Chartered accountants have an ethical obligation to their clients, employers and stakeholders.

402 81.9 81.9 81.9 86 17.5 17.5 99.4 3 .6 .6 100.0 491 100.0

U8 Chartered accountants are regarded as professionals once they have completed the required basic training.

252 51.3 51.3 51.3 178 36.3 36.3 87.6 57 11.6 11.6 99.2 4 .8 .8 100.0 491 100.0

U9 Chartered accountants should act in accordance with applicable professional ethical standards.

371 75.6 75.6 75.6 120 24.4 24.4 100.0 491 100.0

U10 A training programme for chartered accountants should be more than a mere transfer of knowledge.

321 65.4 65.4 65.4 153 31.2 31.2 96.5 15 3.1 3.1 99.6 2 .4 .4 100.0 491 100.0

U11 A professional chartered accountant is the same as an ethical chartered accountant.

145 29.5 29.5 29.5 185 37.7 37.7 67.2 119 24.2 24.2 91.4 42 8.6 8.6 100.0 491 100.0

U12 The education of chartered accountants should cultivate a culture of life-long learning.

179 36.5 36.5 36.5 284 57.8 57.8 94.3 26 5.3 5.3 99.6 2 .4 .4 100.0 491 100.0

APPENDIX D 438

VALID RESPONSES

Strongly agree (1)

Agree (2)

Disagree (3)


ISSI

NG

R

ESP

ON

SE

TOTAL STATEMENT

f % V % C % f % V % C % f % V % C % f % V % C % f f %

U13 The credibility of chartered accountants depends on an ethical approach to the work they do.

265 54.0 54.0 54.0 200 40.7 40.7 94.7 26 5.3 5.3 100.0 491 100.0

U14 Chartered accountants only need sufficient theoretical knowledge for qualification purposes.

38 7.7 7.8 7.8 88 17.9 18.0 25.7 220 44.8 44.9 70.6 144 29.3 29.4 100.0 1 491 100.0

U15 The teaching of professional values and ethics at an under-graduate level should be seen as a process rather than a course.

177 36.0 36.0 36.0 268 54.6 54.6 90.6 42 8.6 8.6 99.2 4 .8 .8 100.0 491 100.0

U16 The education of chartered accountants should provide a basic foundation of knowledge.

155 31.6 31.8 31.8 282 57.4 57.8 89.5 44 8.8 8.8 98.4 8 1.6 1.6 100.0 3 491 100.0

U17 Competency is a critical issue in the chartered accountants’ profession.

316 64.4 64.5 64.5 163 33.2 33.3 97.8 11 2.2 2.2 100.0 1 491 100.0

U18 Chartered accountants are trusted professionals. 270 55.0 55.0 55.0 179 36.5 36.5 91.4 37 7.5 7.5 99.0 5 1.0 1.0 100.0 491 100.0

U19 The education of chartered accountants should only entail relevant theoretical knowledge at a given point in time.

30 6.1 6.1 6.1 113 23.0 23.1 29.2 269 54.8 54.9 84.1 78 15.9 15.9 100.0 1 491 100.0

APPENDIX D 439

VALID RESPONSES

Strongly agree (1)

Agree (2)

Disagree (3)


ISSI

NG

R

ESP

ON

SE

TOTAL STATEMENT

f % V % C % f % V % C % f % V % C % f % V % C % f f %

U20 The competency of chartered accountants also includes their professional values, ethics and attitudes.

241 49.1 49.1 49.1 237 48.3 48.3 97.4 12 2.4 2.4 99.8 1 .2 .2 100.0 491 100.0

U21 In addition to acquiring theoretical knowledge and skills, today's chartered accountants need other skills.

312 63.5 63.5 63.5 171 34.8 34.8 98.4 8 1.6 1.6 100.0 491 100.0

U22 The education of chartered accountants should enable them to adapt to change.

276 56.2 56.2 56.2 207 42.2 42.2 98.4 8 1.6 1.6 100.0 491 100.0

U23 The education of chartered accountants should provide a foundation of various professional skills.

272 55.4 55.6 55.6 212 43.2 43.4 99.0 5 1.0 1.0 100.0 2 491 100.0

U24 Chartered accountants enable organisations to shape their financial future.

230 46.8 46.9 46.9 237 48.3 48.4 95.3 22 4.5 4.5 99.8 1 .2 .2 100.0 1 491 100.0

U25 Chartered accountants are continuously challenged to maintain competence.

261 53.2 53.3 53.3 214 43.6 43.7 96.9 13 2.6 2.7 99.6 2 .4 .4 100.0 1 491 100.0

SOURCE: SPSS Output

* f = frequency % = Percentage

V % = Valid percentage C % - Cumulative percentage

APPENDIX D 440

TABLE D3: Anti-Image Matrices (Anti-Image Correlation – Factor Analysis 2)

Items U1 U2 U3 U4 U5 U6 U7 U8 U9 U10 U11 U12 U13 U15 U16 U17 U18 U20 U21 U22 U23 U24 U25

U1 .859(a) -.231 -.145 .032 -.141 .087 -.053 .011 -.023 .008 -.005 -.267 .035 -.049 .090 -.047 .047 .035 -.006 -.018 .015 .055 -.012

U2 -.231 .914(a) -.115 -.035 .026 -.200 .036 .001 -.136 .000 -.085 -.010 -.072 -.047 -.028 .024 -.029 -.154 -.028 .078 -.094 -.011 -.104

U3 -.145 -.115 .898(a) -.143 .029 -.151 .021 -.069 .106 -.034 -.038 -.101 -.168 -.010 -.050 -.025 .083 .136 -.027 -.024 -.139 -.122 .009

U4 .032 -.035 -.143 .860(a) -.129 -.120 -.237 .040 -.218 -.051 .002 -.024 -.026 .003 .105 .043 -.163 -.101 -.068 .072 .085 -.028 .079

U5 -.141 .026 .029 -.129 .925(a) -.056 -.042 .037 .048 -.070 .016 -.076 -.056 -.028 .038 -.117 -.103 -.049 .087 -.216 -.082 -.019 -.057

U6 .087 -.200 -.151 -.120 -.056 .912(a) -.091 -.001 -.093 -.072 .052 -.037 -.034 .006 -.063 .026 -.040 -.094 .041 -.067 -.055 .136 .019

U7 -.053 .036 .021 -.237 -.042 -.091 .906(a) -.016 -.257 -.046 .068 -.033 .003 .040 -.059 -.067 .002 -.073 -.082 .009 -.048 .001 -.004

U8 .011 .001 -.069 .040 .037 -.001 -.016 .856(a) -.194 .015 -.133 -.041 .043 -.032 -.033 -.009 -.072 -.033 .018 .043 -.002 -.115 -.027

U9 -.023 -.136 .106 -.218 .048 -.093 -.257 -.194 .861(a) -.045 .014 .088 -.150 -.031 -.035 -.101 .039 .011 .093 -.063 -.046 .017 -.023

U10 .008 .000 -.034 -.051 -.070 -.072 -.046 .015 -.045 .930(a) -.062 -.114 .024 -.027 -.023 .031 .043 -.001 -.060 .004 -.006 .048 -.138

U11 -.005 -.085 -.038 .002 .016 .052 .068 -.133 .014 -.062 .818(a) -.127 -.096 .118 -.056 .079 -.141 -.047 .042 -.045 -.002 -.001 -.029

U12 -.267 -.010 -.101 -.024 -.076 -.037 -.033 -.041 .088 -.114 -.127 .916(a) -.180 -.039 -.058 -.004 .004 -.067 -.033 -.106 .000 .007 .012

U13 .035 -.072 -.168 -.026 -.056 -.034 .003 .043 -.150 .024 -.096 -.180 .912(a) -.155 .017 -.111 .004 -.063 .050 .048 .037 -.055 -.029

U15 -.049 -.047 -.010 .003 -.028 .006 .040 -.032 -.031 -.027 .118 -.039 -.155 .880(a) -.221 -.016 .053 -.117 -.128 .001 .045 .006 -.065

U16 .090 -.028 -.050 .105 .038 -.063 -.059 -.033 -.035 -.023 -.056 -.058 .017 -.221 .879(a) -.037 -.079 .016 .020 -.078 -.069 -.031 .027

U17 -.047 .024 -.025 .043 -.117 .026 -.067 -.009 -.101 .031 .079 -.004 -.111 -.016 -.037 .896(a) -.149 -.023 -.132 -.139 .038 .127 -.162

U18 .047 -.029 .083 -.163 -.103 -.040 .002 -.072 .039 .043 -.141 .004 .004 .053 -.079 -.149 .857(a) .023 -.007 .000 -.014 -.169 -.036

U20 .035 -.154 .136 -.101 -.049 -.094 -.073 -.033 .011 -.001 -.047 -.067 -.063 -.117 .016 -.023 .023 .934(a) -.054 -.046 -.052 -.047 -.052

U21 -.006 -.028 -.027 -.068 .087 .041 -.082 .018 .093 -.060 .042 -.033 .050 -.128 .020 -.132 -.007 -.054 .901(a) -.230 -.150 -.101 .002

U22 -.018 .078 -.024 .072 -.216 -.067 .009 .043 -.063 .004 -.045 -.106 .048 .001 -.078 -.139 .000 -.046 -.230 .886(a) -.351 -.140 .021

U23 .015 -.094 -.139 .085 -.082 -.055 -.048 -.002 -.046 -.006 -.002 .000 .037 .045 -.069 .038 -.014 -.052 -.150 -.351 .910(a) -.095 -.095

U24 .055 -.011 -.122 -.028 -.019 .136 .001 -.115 .017 .048 -.001 .007 -.055 .006 -.031 .127 -.169 -.047 -.101 -.140 -.095 .860(a) -.267

U25 -.012 -.104 .009 .079 -.057 .019 -.004 -.027 -.023 -.138 -.029 .012 -.029 -.065 .027 -.162 -.036 -.052 .002 .021 -.095 -.267 .902(a)

SOURCE: SPSS Output

* (a) Measures of Sampling Adequacy (MSA)

APPENDIX D 441

TABLE D4: Descriptive analysis of factor scores: Section B, Area 1 [U]

Factor 1: CmpSkll

Factor 2: Ethcs

Factor 3: EdcTrn

Valid 491 491 491 N

Missing 0 0 0

Mean 1.4268 1.3210 1.5173

Standard deviation .36502 .33336 .37944

Variance .133 .111 .144

Skewness .365 1.003 .401

Standard error of Skewness .110 .110 .110

Kurtosis -1.169 .306 -.344

Standard error of Kurtosis .220 .220 .220

SOURCE: SPSS Output

---o0o---

442

APPENDIX E

APPENDIX E 443

TABLE E1: Descriptive statistics – Section B, Area 2

(Item 32 [V1] – Item 45 [V14])

V1 V2 V3 V4 V5 V6 V7 V8 V9 V10 V11 V12 V13 V14

N Valid 491 490 489 489 490 491 490 490 489 489 487 488 489 487

Missing 0 1 2 2 1 0 1 1 2 2 4 3 2 4

Range 2 3 3 3 3 3 3 3 3 3 3 3 3 2

Minimum 1 1 1 1 1 1 1 1 1 1 1 1 1 1

Maximum 3 4 4 4 4 4 4 4 4 4 4 4 4 3

Mean 1.41 1.79 1.71 2.16 1.58 1.90 1.57 1.70 1.76 1.72 1.83 1.63 1.88 1.69

Median 1.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00

Mode 1 2 2 2 2 2 2 2 2 2 2 2 2 2

Standard deviation .512 .773 .622 .731 .595 .668 .554 .670 .578 .557 .656 .580 .765 .574

Variance .262 .597 .387 .535 .355 .447 .307 .448 .334 .310 .430 .336 .586 .330

Skewness .606 .733 .397 .189 .653 .408 .339 .644 .263 .231 .500 .461 .401 .137

Standard error of

skewness .110 .110 .110 .110 .110 .110 .110 .110 .110 .110 .111 .111 .110 .111

Kurtosis -1.104 .059 -.122 -.265 .433 .279 -.439 .211 .571 .694 .554 .438 -.636 -.610

Standard error of

kurtosis .220 .220 .220 .220 .220 .220 .220 .220 .220 .220 .221 .221 .220 .221

SOURCE: SPSS Output

APPENDIX E 444

TABLE E2: Frequency distribution – Section B, Area 2 [V]

VALID RESPONSES

Strongly agree (1)

Agree (2)

Disagree (3)


ISSI

NG

R

ESP

ON

SE

TOTAL STATEMENT

f % V % C % f % V % C % f % V % C % f % V % C % f f %

V1 The continuous professional development of chartered accountants is critical.

296 60.3 60.3 60.3 190 38.7 38.7 99.0 5 1.0 1.0 100.0 491 100.0

V2 Recent corporate collapses (e.g. Enron) can be attributed to the unethical behaviour of chartered accountants.

196 39.9 40.0 40.0 215 43.8 43.9 83.9 66 13.4 13.5 97.3 13 2.6 2.7 100.0 1 491 100.0

V3 Continuous professional development provides an assurance of professional service.

184 37.5 37.6 37.6 265 54.0 54.2 91.8 38 7.7 7.8 99.6 2 0.4 0.4 100.0 2 491 100.0

V4 The continuous professional development of chartered accountants will avert corporate collapses.

84 17.1 17.2 17.2 258 52.5 52.8 69.9 133 27.1 27.2 97.1 14 2.9 2.9 100.0 2 491 100.0

V5 The benefits derived from continuous professional development programmes depend on the attitude of the chartered accountant.

230 46.8 46.9 46.9 239 48.7 48.8 95.7 18 3.7 3.7 99.4 3 0.6 0.6 100.0 1 491 100.0

APPENDIX E 445

VALID RESPONSES

Strongly agree (1)

Agree (2)

Disagree (3)


ISSI

NG

R

ESP

ON

SE

TOTAL STATEMENT

f % V % C % f % V % C % f % V % C % f % V % C % f f %

V6 Continuous professional development means realigning one’s professional values and attitudes.

130 26.5 26.5 26.5 288 58.7 58.7 85.1 66 13.4 13.4 98.6 7 1.4 1.4 100.0 491 100.0

V7 Continuous professional development must be a requirement for all chartered accountants in order to maintain the public’s confidence in the profession.

225 45.8 45.9 45.9 252 51.3 51.4 97.3 12 2.4 2.4 99.8 1 0.2 0.2 100.0 1 491 100.0

V8 Continuous professional development should be a condition of a chartered accountant’s continued membership of a professional body.

201 40.9 41.0 41.0 241 49.1 49.2 90.2 43 8.8 8.8 99.0 5 1.0 1.0 100.0 1 491 100.0

V9 Continuous professional development refers to learning activities following qualification.

151 30.8 30.9 30.9 307 62.5 62.8 93.7 28 5.7 5.7 99.4 3 0.6 0.6 100.0 2 491 100.0

V10 The emphasis of continuous professional development means a foundation for lifelong learning.

162 33.0 33.1 33.1 307 62.5 62.8 95.9 17 3.5 3.5 99.4 3 0.6 0.6 100.0 2 491 100.0

APPENDIX E 446

VALID RESPONSES

Strongly agree (1)

Agree (2)

Disagree (3)


ISSI

NG

R

ESP

ON

SE

TOTAL STATEMENT

f % V % C % f % V % C % f % V % C % f % V % C % f f %

V11 Continuous professional development implies further training in professional values, ethics and attitudes.

146 29.7 30.0 30.0 285 58.0 58.5 88.5 49 10.0 10.1 98.6 7 1.4 1.4 100.0 4 491 100.0

V12 Continuous professional development is aimed at the post-qualification maintenance of professional competence.

202 41.1 41.4 41.4 267 54.4 54.7 96.1 16 3.3 3.3 99.4 3 0.6 0.6 100.0 3 491 100.0

V13 A training programme for chartered accountants should provide students with the necessary skills to learn by themselves and at their own pace.

169 34.4 34.6 34.6 217 44.2 44.4 78.9 96 19.6 19.6 98.6 7 1.4 1.4 100.0 2 491 100.0

V14 Continuous professional development should be seen as an extension of the education process that led to the initial qualification as a chartered accountant.

179 36.5 36.8 36.8 280 57.0 57.5 94.3 28 5.7 5.7 100.0 4 491 100.0

SOURCE: SPSS Output

* f = frequency

% = Percentage

V % = Valid percentage

C % - Cumulative percentage

APPENDIX E 447

TABLE E3: Descriptive analysis of factor scores: Section B, Area 2 [V]

Factor 1: LrnCPD

Factor 2: CrtCPD

Valid 490 491 N

Missing 1 0

Mean 1.7257 1.5959

Standard deviation .39642 .43244

Variance .157 .187

Skewness -.141 .239

Standard error of Skewness .110 .110

Kurtosis -.428 -.733

Standard error of Kurtosis .220 .220

SOURCE: SPSS Output

---o0o---

448

APPENDIX F

APPENDIX F 449

TABLE F1: Descriptive statistics – Section B, Area 3

(Item 46 [W1] – Item 54 [W9])

W1 W2 W3 W4 W5 W6 W7 W8 W9

N Valid 490 489 491 487 491 487 490 490 491

Missing 1 2 0 4 0 4 1 1 0

Range 3 3 3 2 3 3 3 3 3

Minimum 1 1 1 1 1 1 1 1 1

Maximum 4 4 4 3 4 4 4 4 4

Mean 1.63 1.53 1.54 1.66 1.52 1.79 1.53 1.64 1.65

Median 2.00 2.00 2.00 2.00 1.00 2.00 2.00 2.00 2.00

Mode 2 2 1(a) 2 1 2 1 2 2

Standard deviation .653 .539 .557 .567 .627 .651 .561 .624 .641

Variance .426 .290 .310 .321 .393 .423 .315 .390 .410

Skewness .777 .339 .440 .153 .957 .379 .499 .536 .649

Standard error of

skewness .110 .110 .110 .111 .110 .111 .110 .110 .110

Kurtosis .522 -.555 -.397 -.709 .583 -.115 -.345 -.101 .312

Standard error of

kurtosis .220 .220 .220 .221 .220 .221 .220 .220 .220

SOURCE: SPSS Output

* (a) Multiple modes exist; the smallest value is shown.

APPENDIX F 450

TABLE F2: Frequency distribution – Section B, Area 3 [W]

VALID RESPONSES

Strongly agree (1)

Agree (2)

Disagree (3)


ISSI

NG

R

ESP

ON

SE

TOTAL STATEMENT

f % V % C % f % V % C % f % V % C % f % V % C % f f %

W1 Lifelong learning implies a desire and ability to continue to learn.

224 45.6 45.7 45.7 229 46.6 46.7 92.7 32 6.5 6.5 99.0 5 1.0 1.0 100.0 1 491 100.0

W2 Lifelong learning implies a continuous refinement of professional knowledge, skills, values, ethics and attitudes.

237 48.3 48.5 48.5 244 49.7 49.9 98.4 7 1.4 1.4 99.8 1 0.2 0.2 100.0 2 491 100.0

W3 Lifelong learning implies a desire and ability to adapt and develop skills.

239 48.7 48.7 48.7 239 48.7 48.7 97.4 12 2.4 2.4 99.8 1 0.2 0.2 100.0 1 491 100.0

W4 Lifelong learning implies a thorough foundation of professional values, ethics and attitudes associated with continuous professional development.

191 38.9 39.2 39.2 273 55.6 56.1 95.3 23 4.7 4.7 100.0 4 491 100.0

W5 Lifelong learning implies a desire to go beyond the minimum.

269 54.8 54.8 54.8 193 39.3 39.3 94.1 26 5.3 5.3 99.4 3 0.6 0.6 100.0 491 100.0

W6 Lifelong learning implies a thorough foundation of professional values, ethics and attitudes in an under-graduate environment.

163 33.2 33.5 33.5 268 54.6 55.0 88.5 53 10.8 10.9 99.4 3 0.6 0.6 100.0 4 491 100.0

APPENDIX F 451

VALID RESPONSES

Strongly agree (1)

Agree (2)

Disagree (3)


ISSI

NG

R

ESP

ON

SE

TOTAL STATEMENT

f % V % C % f % V % C % f % V % C % f % V % C % f f %

W7 Lifelong learning implies a desire to incorporate better professional judgement.

244 49.7 49.8 49.8 232 47.3 47.3 97.1 13 2.6 2.7 99.8 1 0.2 0.2 100.0 1 491 100.0

W8 Lifelong learning implies a desire to incorporate professional ethical values in performance.

212 43.2 43.3 43.3 243 49.5 49.6 92.9 33 6.7 6.7 99.6 2 0.4 0.4 100.0 1 491 100.0

W9 Lifelong learning implies a continuous acquirement of ethics as one works in practice after qualification.

211 43.0 43.0 43.0 243 49.5 49.5 92.5 33 6.7 6.7 99.2 4 0.8 0.8 100.0 491 100.0

SOURCE: SPSS Output

* f = frequency

% = Percentage



---o0o---

452

APPENDIX G

APPENDIX G 453

TABLE G1: Descriptive statistics – Section B, Area 4

(Item 55 [X1] – Item 65 [X11])

X1 X2 X3 X4 X5 X6 X7 X8 X9 X10 X11

N Valid 488 489 488 489 489 489 486 489 489 482 489

Missing 3 2 3 2 2 2 5 2 2 9 2

Range 3 3 3 3 3 3 3 3 3 3 3

Minimum 1 1 1 1 1 1 1 1 1 1 1

Maximum 4 4 4 4 4 4 4 4 4 4 4

Mean 1.55 2.40 1.74 1.69 1.69 1.97 2.07 1.98 2.82 2.99 3.30

Median 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 3.00 3.00 3.00

Mode 1 2 2 2 2 2 2 2 3 3 4

Median .589 .905 .640 .564 .621 .753 .737 .757 .877 .795 .774

Mode .346 .819 .410 .318 .385 .567 .543 .573 .769 .632 .599

Standard

deviation .650 .077 .573 .363 .474 .449 .286 .468 -.438 -.576 -.971

Variance .111 .110 .111 .110 .110 .110 .111 .110 .110 .111 .110

Skewness .145 -.780 .666 .979 .157 -.090 -.208 -.059 -.434 .065 .548

Standard error

of skewness .221 .220 .221 .220 .220 .220 .221 .220 .220 .222 .220

Kurtosis .121 -.794 .685 .894 .520 -.119 -.179 -.077 -.461 .025 .465

Standard error

of kurtosis .219 .219 .219 .219 .219 .219 .220 .219 .219 .220 .219

SOURCE: SPSS Output

APPENDIX G 454

TABLE G2: Frequency distribution – Section B, Area 4 [X]

VALID RESPONSES

Strongly agree (1)

Agree (2)

Disagree (3)


ISSI

NG

R

ESP

ON

SE

TOTAL STATEMENT

f % V % C % f % V % C % f % V % C % f % V % C % f f %

X1 Ethics education heightens a student’s awareness of ethical issues in professional practice.

241 49.1 49.4 49.4 227 46.2 46.5 95.9 18 3.7 3.7 99.6 2 0.4 0.4 100.0 3 491 100.0

X2 Ethics is a gut feel that everybody is born with. 83 16.9 17.0 17.0 183 37.3 37.4 54.4 165 33.6 33.7 88.1 58 11.8 11.9 100.0 2 491 100.0


173 35.2 35.5 35.5 274 55.8 56.1 91.6 35 7.1 7.2 98.8 6 1.2 1.2 100.0 3 491 100.0

X4 Ethics education provides a basic understanding of the morals of the profession.

174 35.4 35.6 35.6 298 60.7 60.9 96.5 13 2.6 2.7 99.2 4 0.8 0.8 100.0 2 491 100.0


189 38.5 38.7 38.7 264 53.8 54.0 92.6 33 6.7 6.7 99.4 3 0.6 0.6 100.0 2 491 100.0

X6 Ethics education provides students with the necessary skills required in practice.

131 26.7 26.8 26.8 254 51.7 51.9 78.7 90 18.3 18.4 97.1 14 2.9 2.9 100.0 2 491 100.0


102 20.8 21.0 21.0 259 52.7 53.3 74.3 112 22.8 23.0 97.3 13 2.6 2.7 100.0 5 491 100.0

APPENDIX G 455

VALID RESPONSES

Strongly agree (1)

Agree (2)

Disagree (3)


ISSI

NG

R

ESP

ON

SE

TOTAL STATEMENT

f % V % C % f % V % C % f % V % C % f % V % C % f f %

X8 Ethics education provides a competitive advantage for chartered accountants.

131 26.7 26.8 26.8 254 51.7 51.9 78.7 89 18.1 18.2 96.9 15 3.1 3.1 100. 2 491 100.0

X9 Ethics education is the responsibility of the tertiary institution, not the company and its management.

44 9.0 9.0 9.0 109 22.2 22.3 31.3 229 46.6 46.8 78.1 107 21.8 21.9 100.0 2 491 100.0

X10 Professional ethics is a contradiction. 24 4.9 5.0 5.0 83 16.9 17.2 22.2 250 50.9 51.9 74.1 125 25.5 25.9 100.0 9 491 100.0

X11 There is no need for ethics education in the under-graduate training of chartered accountants.

15 3.1 3.1 3.1 50 10.2 10.2 13.3 198 40.3 40.5 53.8 226 46.0 46.2 100.0 2 491 100.0

SOURCE: SPSS Output

* f = frequency

% = Percentage



APPENDIX G 456

TABLE G3: Anti-Image Matrices (Anti-Image Correlation – Factor

Analysis)

Items X1 X2 X3 X4 X5 X6 X7 X8 X9 X10

X1 .859(a) .141 -.187 -.283 .000 -.123 -.010 -.120 .053 -.002

X2 .141 .496(a) -.073 -.128 .017 -.002 .071 .010 -.163 -.025

X3 -.187 -.073 .889(a) -.221 -.203 -.170 -.081 -.115 .016 .035

X4 -.283 -.128 -.221 .821(a) -.337 -.011 -.086 .097 -.009 .036

X5 .000 .017 -.203 -.337 .846(a) -.283 -.004 -.160 .054 .028

X6 -.123 -.002 -.170 -.011 -.283 .871(a) -.219 -.133 -.156 -.053

X7 -.010 .071 -.081 -.086 -.004 -.219 .890(a) -.150 -.054 -.105

X8 -.120 .010 -.115 .097 -.160 -.133 -.150 .878(a) -.155 -.025

X9 .053 -.163 .016 -.009 .054 -.156 -.054 -.155 .687(a) -.327

X10 -.002 -.025 .035 .036 .028 -.053 -.105 -.025 -.327 .659(a)

SOURCE: SPSS Output

* (a) Measures of Sampling Adequacy(MSA)

APPENDIX G 457

TABLE G4: Descriptive analysis of factor scores: Section B, Area 4 [X]

Factor 1: EthcEduc

Valid 489 N

Missing 2

Mean 1.8134

Standard deviation .47452

Variance .225

Skewness .278

Standard error of Skewness .110

Kurtosis .590

Standard error of Kurtosis .220

SOURCE: SPSS Output

---o0o---

458

APPENDIX H

APPENDIX H 459

TABLE H1: Descriptive statistics – Section B, Area 5

(Item 66 [Y1] – Item 73 [Y8])

Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8

N Valid 491 490 491 491 491 491 491 491

Missing 0 1 0 0 0 0 0 0

Range 3 3 3 3 3 3 3 3

Minimum 1 1 1 1 1 1 1 1

Maximum 4 4 4 4 4 4 4 4

Mean 1.66 1.82 1.44 1.44 1.39 1.35 1.37 1.39

Median 1.00 2.00 1.00 1.00 1.00 1.00 1.00 1.00

Mode 1 2 1 1 1 1 1 1

Standard deviation .798 .826 .794 .822 .803 .779 .796 .802

Variance .637 .685 .630 .675 .645 .606 .634 .643

Skewness 1.220 .915 2.056 2.058 2.276 2.460 2.345 2.232

Standard error of skewness .110 .110 .110 .110 .110 .110 .110 .110

Kurtosis 1.164 .424 3.715 3.487 4.374 5.263 4.709 4.203

Standard error of kurtosis .220 .220 .220 .220 .220 .220 .220 .220

SOURCE: SPSS Output

APPENDIX H 460

TABLE H2: Frequency distribution – Section B, Area 4 [Y]

VALID RESPONSES

Very important (1)

Important (2)

Somewhat important

(3)

Not important (4) M

ISSI

NG

R

ESP

ON

SE

TOTAL STATEMENT

f % V % C % f % V % C % f % V % C % f % V % C % f f %

Y1 How important is it for a chartered accountant to learn the skill of continuous professional development?

246 50.1 50.1 50.1 188 38.3 38.3 88.4 35 7.1 7.1 95.5 22 4.5 4.5 100.0 491 100.0

Y2 How important is it for a chartered accountant to be a life-long learner?

194 39.5 39.6 39.6 217 44.2 44.3 83.9 53 10.8 10.8 94.7 26 5.3 5.3 100.0 1 491 100.0

Y3 How important is it for a chartered accountant to have professional competence?

343 69.9 69.9 69.9 110 22.4 22.4 92.3 10 2.0 2.0 94.3 28 5.7 5.7 100.0 491 100.0

Y4 How important is it for a chartered accountant to have high ethical standards?

351 71.5 71.5 71.5 97 19.8 19.8 91.2 12 2.4 2.4 93.7 31 6.3 6.3 100.0 491 100.0

Y5 How important is it for a chartered accountant to show integrity?

372 75.8 75.8 75.8 79 16.1 16.1 91.9 10 2.0 2.0 93.9 30 6.1 6.1 100.0 491 100.0

Y6 How important is it for a chartered accountant to be trustworthy?

386 78.6 78.6 78.6 68 13.8 13.8 92.5 9 1.8 1.8 94.3 28 5.7 5.7 100.0 491 100

APPENDIX H 461

VALID RESPONSES

Very important (1)

Important (2)

Somewhat important

(3)

Not important (4) M

ISSI

NG

R

ESP

ON

SE

TOTAL STATEMENT

f % V % C % f % V % C % f % V % C % f % V % C % f f %

Y7 How important is it for a chartered accountant to be reliable?

376 76.6 76.6 76.6 77 15.7 15.7 92.3 8 1.6 1.6 93.9 30 6.1 6.1 100.0 491 100.0

Y8 How important is it for a chartered accountant to be objective?

369 75.2 75.2 75.2 81 16.5 16.5 91.6 12 2.4 2.4 94.1 29 5.9 5.9 100.0 491 100.0

SOURCE: SPSS Output

* f = frequency

% = Percentage



---o0o---

462

APPENDIX I

APPENDIX I 463

TABLE I1: Descriptive statistics – Section B, Area 6

(Item 74 [Z1] – Item 83 [Z10])

Z1 Z2 Z3 Z4 Z5 Z6 Z7 Z8 Z9 Z10

N Valid 491 487 489 487 488 489 489 488 488 488

Missing 0 4 2 4 3 2 2 3 3 3

Range 3 3 3 3 3 3 3 3 3 3

Minimum 1 1 1 1 1 1 1 1 1 1

Maximum 4 4 4 4 4 4 4 4 4 4

Mean 1.72 1.77 1.87 1.91 1.81 1.98 1.86 1.55 1.95 1.68

Median 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00

Mode 2 2 2 2 2 2 2 1 2 2

Standard

deviation .584 .569 .635 .665 .611 .730 .576 .575 .695 .583

Variance .341 .324 .403 .442 .374 .533 .332 .330 .483 .340

Skewness .328 .098 .210 .232 .235 .533 .269 .589 .356 .312

Standard

error of

skewness

.110 .111 .110 .111 .111 .110 .110 .111 .111 .111

Kurtosis .450 -.017 -.180 -.288 .014 .333 1.015 .136 .013 .083

Standard

error of

kurtosis

.220 .221 .220 .221 .221 .220 .220 .221 .221 .221

SOURCE: SPSS Output

APPENDIX I 464

TABLE I2: Frequency distribution – Section B, Area 6 [Z]

VALID RESPONSES

Strongly agree (1)

Agree (2)

Disagree (3)


ISSI

NG

R

ESP

ON

SE

TOTAL STATEMENT

f % V % C % f % V % C % f % V % C % f % V % C % f f %

Z1 The professional values, ethics and attitudes highlighted by professional bodies are apparent in the academic programmes at RAU.

169 34.4 34.4 34.4 294 59.9 59.9 94.3 25 5.1 5.1 99.4 3 0.6 0.6 100.0 491 100.0

Z2 RAU focuses on courses, which include aspects of professional ethics and values applicable to chartered accountants.

148 30.1 30.4 30.4 306 62.3 62.8 93.2 32 6.5 6.6 99.8 1 0.2 0.2 100.0 4 491 100.0

Z3 At RAU, emphasis is placed on the development of professional values, ethics and attitudes in the training of chartered accountants.

132 26.9 27.0 27.0 290 59.1 59.3 86.3 65 13.2 13.3 99.6 2 0.4 0.4 100.0 2 491 100.0

Z4 RAU focuses on discipline-specific courses, covering various applicable international issues pertaining to the role of the chartered accountant.

129 26.3 26.5 26.5 277 56.4 56.9 83.4 78 15.9 16.0 99.4 3 0.6 0.6 100.0 4 491 100.0

APPENDIX I 465

VALID RESPONSES

Strongly agree (1)

Agree (2)

Disagree (3)


ISSI

NG

R

ESP

ON

SE

TOTAL STATEMENT

f % V % C % f % V % C % f % V % C % f % V % C % f f %

Z5 At RAU, emphasis is placed on the development of the necessary skills for continuous professional development of chartered accountants.

143 29.1 29.3 29.3 295 60.1 60.5 89.8 48 9.8 9.8 99.6 2 0.4 0.4 100.0 3 491 100.0

Z6 RAU offers courses that provide skills necessary in the application of computer software.

118 24.0 24.1 24.1 277 56.4 56.6 80.8 78 15.9 16.0 96.7 16 3.3 3.3 100.0 2 491 100.0

Z7 At RAU, emphasis is placed on the professional values, ethics and attitudes for continuous professional development of chartered accountants.

117 23.8 23.9 23.9 329 67.0 67.3 91.2 39 7.9 8.0 99.2 4 0.8 0.8 100.0 2 491 100.0

Z8 RAU uses educators who are skilled in the professional values, ethics and attitudes pertaining to chartered accountants.

238 48.5 48.8 48.8 234 47.7 48.0 96.7 14 2.9 2.9 99.6 2 0.4 0.4 100.0 3 491 100.0

Z9 A definite focus on recent professional ethical conundrums, corporate collapses and mounting stakeholder pressure is evident in the courses offered at RAU.

121 24.6 24.8 24.8 276 56.2 56.6 81.4 83 16.9 17.0 98.4 8 1.6 1.6 100.0 3 491 100.0

APPENDIX I 466

VALID RESPONSES

Strongly agree (1)

Agree (2)

Disagree (3)


ISSI

NG

R

ESP

ON

SE

TOTAL STATEMENT

f % V % C % f % V % C % f % V % C % f % V % C % f f %

Z10 RAU focuses on courses that enhance the value-added approach of chartered accountants.

182 37.1 37.3 37.3 280 57.0 57.4 94.7 24 4.9 4.9 99.6 2 0.4 0.4 100.0 3 491 100.0

SOURCE: SPSS Output

* f = frequency



% = Percentage

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Utilising continued professional development of ethics ...

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