MORAL REASONING AND PROFESSIONAL BUSINESS ETHICS IN THE ACCOUNTING PROFESSION
Abstract
Due to limited resources and information asymmetry, the responsibility for tax compliance and compliance with other regulations is in practice often transferred from clients to their accountants. Consequently, the unethical attitudes and behavior of accountants can significantly impact the compliance of clients, through advice on how to operate in accordance with the regulations or advice on how to exploit the existing regulatory framework. The main goal of this paper is to provide a comprehensive overview of existing research questions, methodological approaches and most important findings regarding accountants’ (non)compliance with regulations and ethical and other principles of the accounting profession. Special attention is given to the existing literature findings regarding ethical beliefs and factors affecting the (un)ethical conduct of accounting professionals.
The findings presented in this paper do not allow for an unequivocal determination of the determinants of ethical beliefs and behavior of professional accountants, but they do indicate great importance of adequately focused educational measures, creating adequate incentives to resist pressure to behave unethically, and a high level of familiarity of accountants with the best practices when providing accounting services, for which codes of ethics and their consistent application are of great importance.
References
Abdolmohammadi, М.J., William J. Read, W.J., Scarborough, D.P. (2003). Does Selection–Socialization Help to Explain Accountants' Weak Ethical Reasoning?. Journal of Business Ethics. 42(1), 71–81.
Akadakpo, B., Enofe, A. (2013). Impact of Accounting Ethics on the Practice of Accounting Profession in Nigeria. IOSR Journal of Business and Management. 12(1), 45–51.
Al–Aidaros, A., Ghani A., Idris, K. (2014). The Consistency Between Prescriptive and Deliberative Accountants' Moral Reasoning: Case In Yemen. Intellectual Review of Management and Business Research. 3(4), 1797–1808.
Albrecht, W.S., Hill, N.C., Albrecht, C.C. (2006). FORUME: Ethics, Credibility and Governance. The Ethics Development Model Applied to Declining Ethics in Accounting. Australian Accounting Review. 16(1), 30–40.
Alm, J., McClellan, C. (2012). Tax Morale and Tax Compliance from the Firm’s Perspective. Kyklos. 65(1), 1–17.
Baïada–Hirèche, L., Garmilis, G. (2016). Accounting Professionals' Ethical Judgment and the Institutional Disciplinary Context: A French–US Comparison. Journal of Business Ethics. 139(4), 639–659.
Bampton, R., Cowton C.J. (2013). Taking Stock of Accounting Ethics Scholarship: A Review of the Journal Literature. Journal of Business Ethics. 114, 549–563.
Cardona, R.J., Rezaee, Z., Rivera–Ortiz, W., Vega–Vilca J.C. (2020). Regulatory Enforcement of Accounting Ethics in Puerto Rico. Journal of Business Ethics. 167(1), 63–76.
Carnegie, G.D., Napier, C.J. (2010). Traditional accountants and business professionals: Portraying the accounting profession after Enron. Accounting, Organizations and Society. 35(3), 360–376.
Chan, S.Y.S., Leung, P. (2006). The effects of accounting students' ethical reasoning and personal factors on their ethical sensitivity. Managerial Auditing Journal. 21(4), 436–457.
Clayton, B.M., van Staden C.J. (2015). The Impact of Social Influence Pressure on the Ethical Decision Making of Professional Accountants: Australian and New Zealand Evidence. Australian Accounting Review. 25(4), 372–388.
Clarke, P., Hill, N., Stevens, K. (1996). FOCUS: Ethics in the Accountancy Profession in Ireland. A European Review. 5(3), 151–155.
Clemens, C., Neill J.D., Stovall, O.S. (2009). An Analysis of International Accounting Codes of Conduct. Journal of Business Ethics. 87, 173–183.
Conroy, S.J., Emerson T.L.N., Pons, F. (2010). Ethical Attitudes of Accounting Practitioners: Are Rank and Ethical Attitudes Related?. Journal of Business Ethics. 91, 183–194.
Cruz, C.A., Shafer, W.E., Strawser, J.R. (2000). A Multidimensional Analysis of Tax Practitioners' Ethical Judgments. Journal of Business Ethics. 24(3), 223–244.
Davis, S., DeZoort, T., Kopp, L.S. (2006). The Effect of Obedience Pressure and Perceived Responsibility on Management Accountants’ Creation of Budgetary Slack. Behavioral Research in Accounting. 18(1). 19–35.
Doyle, E., Frecknall Hughes, J., Summers, B. (2013). An Empirical Analysis of the Ethical Reasoning of Tax Practitioners. Journal of Business Ethics. 114(2), 325–339.
Emerson, T.L.N., Conroy, S.J., Stanley, C.W. (2007). Ethical Attitudes: Recent Evidence from a Practitioners' Survey. Journal of Business Ethics. 71(1), 73–87.
Farrell, B.J., Cobbin, D.M. (2000). A content analysis of codes of ethics from fifty–seven national accounting organizations. Business Ethics. 9(3), 180–190.
Federation of European Accountants (FEE). (2016). Ethics: some views from young professional accountants – survey. Ethics and Competencies, 1–28. Доступно на: https://www.ifac.org/system/files/1609_Outcome_of_the_FEE_survey_towards_YP.pdf.
Flanagan, J., Clarke, K. (2007). Beyond a Code of Professional Ethics: A Holistic Model of Ethical Decision–Making for Accountants. Abacus. 43(4), 488–518.
Frankel, M.S. (1989). Professional codes: Why, how, and with what impact?. Journal of Business Ethics. 8(2–3), 109–115.
Jakubowski S.Т., Chao, P., Huh, S.K., Maheshwari, S. (2002). A Cross–Country Comparison of the Codes of Professional Conduct of Certified/Chartered Accountants, Journal of Business Ethics. 35(2), 111–129.
Jaijairam, P. (2017). Ethics in Accounting. Journal of finance and accountancy. 23, 1–13.
Jenkins, J.G., Popova, V., Sheldon, M.D. (2018). In support of public or private interests? An examination of sanctions imposed under the AICPA code of professional conduct. Journal of Business Ethics. 152(2), 523–549.
Lago–Peñas, I., Lago–Peñas, S. (2010). The determinants of tax morale in comparative perspective: Evidence from European countries. European Journal of Political Economy. 26(4), 441–453.
Lang, М, Karmanska, А., Jarvis, R. (2016). Accounting and Ethics: Pressure Experienced by the Professional Accountant. European Federation of Accountants and Auditors for SMEs (EFAA). 1–48. Доступно на:
https://efaa.com/wp–content/uploads/2021/06/20161221_EFAA_Pressure_Survey.pdf.
Luttmer, E.F.P., Singhal, M. (2014). Tax Morale. Journal of Economic Perspectives. 28(4): 149–168.
Martinov–Bennie, N., Mladenović, R. (2015). Investigation of the Impact of an Ethical Framework and an Integrated Ethics Education on Accounting Students’ Ethical Sensitivity and Judgment. Journal of Business Ethics. 127(1), 189–203.
McLean, B., Elkind, P. (2003). The Smartest Guys in the Room: The Amazing Rise and Scandalous Fall of Enron. London: Penguin Books.
Mickiewicz, T., Rebmann, A., Sauka, A. (2019). To Pay or Not to Pay? Business Owners’ Tax Morale: Testing a Neo–Institutional Framework in a Transition Environment. Journal of Business Ethics. 157, 75–93.
Nikoomaram, H., Roodposhti, F.R., Ashlagh, A.T., Lofti F.H., Taghipourian, Y. (2013). The Effects of age, gender, education level and work experience of accountant on ethical decision making by using fuzzy logic. International Research Journal of Applied and Basic Sciences. 4(6), 1559–1571.
O'Leary, C. (2008). An Empirical Analysis of the Positive Impact of Ethics Teaching on Accounting Students. Accounting Education. 18(4–5), 505–520.
Pierce, B., Sweeney, B. (2010). The Relationship between Demographic Variables and Ethical Decision Making of Trainee Accountants. International Journal of Auditing. 14, 79–99.
Ponemon, L.A. (1990). Ethical Judgments in Accounting: A Cognitive–Developmental Perspective. Critical Perspectives on Accounting. 1(2), 191–215.
Ponemon, L. A. (1992). Ethical reasoning and selection–socialization in accounting. Accounting, Organizations and Society. 17(3–4), 239–258.
Radtke, R.R. (2005). Role Morality and Accountants’ Ethically Sensitive Decisions. Advances in Accounting Behavioral Research. 8, 113–138.
Rest, J.R. (1979). Development in Judgment Moral Issues. Minneapolis, MN: University of Minnesota Press.
Satava, D., Caldwell, S., Richards, L. (2006). Ethics and the Auditing Culture: Rethinking the Foundation of Accounting and Auditing. Journal of Business Ethics. 64(3), 271–284.
Shaub, M.K. (1994). An analysis of the association of traditional demographic variables with the moral reasoning of auditing students and auditors. Journal of Accounting Education. 12(1), 1–26.
Sonnerfeldt, A., Loft, A. (2018). The changing face of ethics – Developing a Code of Ethics for Professional Accountants from 1977 to 2006. Accounting History. 1–21.
Todorović, Z. (2018). Application of Ethics in the Accounting Profession with an Overview of the Banking Sector. Journal of Central Banking Theory and Practice. 3, 139–158.
Toma, L.O. (2016). The ethics of tax accounting. Is there a conflict?. MPRA Paper 72168. University Library of Munich, Germany, 1–16. Доступно на: https://mpra.ub.uni–muenchen.de/72168/1/MPRA_paper_72168.pdf
Vyakarnam, S., Srikanthan, S., Fitzsimons, S. (1996). FOCUS: Can Accountants Distinguish their Assets from their Morals?. Business Ethics. 5(3), 156–163.
West, A., Buckby, S. (2020). Ethics Education in the Qualification of Professional Accountants: Insights from Australia and New Zealand. Journal of Business Ethics. 164, 61–80.