Financial Reporting and Ethics - The Institute of Chartered ...

FINANCIAL REPORTING AND ETHICS6.11 THEORY OF MORAL DEVELOPMENTMoral development has been an issue of research interest in education andpsychology for more than sixty years. Theory of moral development purposesto educate candidates on how people develop their moral values. Otherwiseknown as the cognitive moral development process, it describes the stagesthrough which people progress in their development of moral thought. Theprocess has been found to be a crucial element in ethical decision makingprocess. The psychologist, Lawrence Kohlberg developed the six-stage model.6.11.1 Kohlberg’s Stages of Moral DevelopmentKohlberg (1969) proposed that moral reasoning is a direct result of anindividual’s progress through a series of six stages of moraldevelopment that are nested within three overarching levels: the preconventionlevel, the convention level and the post-convention level.(a)Level 1: Pre-conventional MoralityStage 1: Obedience and PunishmentThis is the earliest stage of moral development which isespecially common in young children, although adults are notimmune to the expression of this type of reasoning. At this stage,children perceive rules as immutable, fixed and absolute. Theybelieve that obeying the rules is crucial as it is the only way bywhich punishment can be avoided.Stage 2: Individualism and ExchangeAt this moral development stage, children manifest individualpoints of consideration. They judge actions and return on howthey meet individual needs. For example, in the Heinz dilemma,children held fervently that the most reasoned point of actionwas whichever best served the needs of Heinz. They further heldthat reciprocity has a place however only if it serves one’s owninterests.(b)Level 2: Conventional MoralityStage 3: Interpersonal RelationshipsThis is often referred to as the “good boy - good girl” orientation.The moral development stage focuses on living up to roles andsocial expectations, most especially as “persons to count on.”Emphasis is on conformity, being ‘nice.’138