Teaching ethics in the accounting and tax curriculum using Milgram's agentic shift theory

Forty-five years ago, psychologist Stanley Milgram conducted a series of famous experiments on obedience and authority that tested individuals' willingness to administer electric shocks to a test subject under the direction of an authority figure. This paper discusses how Milgram's work on human psychological tendencies can be used to address subordination of judgment and other ethical issues in financial accounting and reporting, including accounting for income taxes. The teaching approach described relies on readings, videos, and mini-cases to give students an appreciation for the role of organizational influences on ethical decision making in today's accounting world. This teaching approach is innovative in its use of social psychological theories to address accounting ethical dilemmas, and its incorporation of contemporary international financial reporting standards and tax reporting issues into the ethics debate.