Self interest among CPAs may influence their moral reasoning

In 1990, the Federal Trade Commission (FTC) issued a consent order to the A merican Institute of Certified Public Accountants (AICPA). The order decree d the AICPA to lessen its longstanding ethics code which had until then ban ned the receipts of commissions, referral fees and contingent fees. The FTC alleged that the AICPA banned receipt of the fees as an attempt to restrai n trade (FTC, 1990). In the present study, we sought to determine if CPAs' preference for bans on commissions, referral fees and contingent fees is re lated to their moral reasoning whereby CPAs perceive the bans to serve as a means of resolving ethical issues. While determining this matter cannot pr ove whether the bans did or did not actually result in restrained trade, it can offer insight into the perceived ethical importance to CPAs of the ove rturned rules. Based on a random sample of AICPA members and using Rest's D efining Issues Test (DIT) to measure moral reasoning, we did not find a CPA 's moral reasoning to be related to his/her preference for ethics rules whi ch ban commissions, referral fees or contingent fees. However, our results did indicate that most CPAs prefer banning commissions, referral fees and c ontingent fees, with those CPAs holding a higher financial stake in public accounting, namely partners, favoring banning referral fees and contingent fees significantly less than CPAs with a lesser stake. Further, we noted a significant negative relationship between financial stake and moral reasoni ng. These results seem to suggest that self-interest among CPAs may influen ce their moral reasoning. Further study is needed to examine the relationsh ip between self-interest of CPAs and their moral reasoning. If self-interes t clouds moral judgments made by CPAs, capital markets are in danger. Rende ring an independent audit opinion must exclude self-interest.