Factors influencing ethics of accountants in financial reporting
Recently, studies show that financial reporting fraud is increasing in Malaysia and accountants are involved in the fraud. Financial reporting fraud is an unacceptable behavior and it needs to be combated. Ethics is an important component in the accounting profession. However, the ethics of accou...
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| Main Author: | |
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| Format: | Thesis |
| Language: | English |
| Published: |
2016
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| Subjects: | |
| Online Access: | http://psasir.upm.edu.my/id/eprint/65966/1/GSM%202016%205%20UPM%20IR.pdf |
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| Summary: | Recently, studies show that financial reporting fraud is increasing in Malaysia and
accountants are involved in the fraud. Financial reporting fraud is an unacceptable
behavior and it needs to be combated. Ethics is an important component in the
accounting profession. However, the ethics of accountants are still questionable due to
the increase of ethical failure in financial reporting. The ethical failures have proved
that accountants failed to act ethically in disclosing information’s in their financial
statement. The reasons for accountant’s ethical failures are inappropriate ethical
judgment, pressure from top management, lack of peers support, poor attitude, and
having opportunities to involve in unethical conducts. Accountants are responsible to
protect the public interest and public have the expectation that accountants need to act
with integrity. However, the financial reporting fraud has caused public distrust of the
accountants. This is because accountants have breached their responsibility in
providing truthful financial information to the public. Hence, it is important to increase
the ethics of accountants towards financial reporting. The objective of the research is to
examine the influence of attitude, subjective norm, perceived behavioral control, and
ethical judgment, towards ethical intention of accountants in their financial reporting.
The second objective of the research is to investigate the influence of ethical intention
towards the ethical behavior of accountants in their financial reporting. The third
objective is to determine the whether ethical intention mediate the relationship between
attitude, subjective norm, perceived behavioral control, ethical judgment and ethical
behavior in financial reporting.
Theory of Planned behavior (TPB) is used as an underlying theory in this research.
Questionnaires were used to gather data from a sample of 133 Malaysian accountants,
which indicates 53% of response rate. Using multiple regression analysis, the statistical
technique, data were analyzed and the research hypotheses were tested. The overall
findings of this research have shown that there is a positive relationship between
attitude, perceived behavioral control, ethical judgment, and ethical intention of
accountants in their financial reporting. However, the proposed direct influence of
subjective norm was not supported. The ethical intentions positively influence
accountant’s ethical behavior. The ethical intention fully mediates the relationship between attitude and perceived behavioral control. Besides, ethical intention partially
mediates the ethical judgment and did not mediate the subjective norm. The findings of
this research would be useful to increase accountant’s ethical decision making towards
financial reporting.
Results of the research present practical implications to accounting regulators and
Ministry of Education to maximize the ethical decision making of the accountants by
tapping the factors into their training programs, conferences, and ethics education. This
research also contributes to the body of knowledge on factors influencing accountant’s
ethical intention and their ethical behavior on financial reporting in the area of business
ethics. |
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