Investigating the Effect of the Components of Ethical Programs of Companies on Reducing the Unethical Behaviors of Accountants

Subject Areas : Financial and Behavioral Researches in Accounting

Aliakbar Pourfalah Faraghe ¹ , Mehdi Sarikhani ²

1 - Department of Accounting, Safashahr Branch, Islamic Azad University, Safashahr, Iran
2 - Assistant Professor of Accounting, Safashahr Branch, Islamic Azad University, Safashahr, Iran.

Received: 2023-04-23 Accepted : 2023-05-26 Published : 2023-06-22

Keywords: Code of ethics, Unethical behaviors of accountants, Components of ethical programs, Ethics training,

Abstract :

The purpose of this study is to investigate the effect of the components of ethical programs of companies on reducing the unethical behavior of accountants. Therefore, the impact of the components of punishment, monitoring, internal reporting, code of ethics, ethics support service and ethics training on the unethical behavior of accountants was investigated. The statistical population of this research is accountants and financial employees of manufacturing companies in Isfahan province in 2022, and the data collection tool is questionnaire. Structural equation method with partial least squares approach was used to test research hypotheses and SmartPLS 3 software was used for data analysis. The results show that the components of monitoring, punishment, code of ethics, ethics support service and ethics training have negative and significant effect on reducing the unethical behavior of accountants, and the effect of the internal reporting component on reducing the unethical behavior of accountants is negative but insignificant. Also, the difference between the components of ethical programs of companies on reducing the unethical behavior among subgroups of female and male accountants was investigated, indicating a significant difference in the relationship between ethics support service and unethical behavior between female and male accountants. The results of this research show that in general, companies can reduce unethical behavior in accountants by implementing ethical programs.

References:

Adelopo, I., & Meier, F. (2022). UK professional accounting bodies (PAB): Members’ unethical behaviors and exclusion. Journal of Corporate Accounting & Finance, 33(3), 47-64.

Andreoli, N., & Lefkowitz, J. (2009). Individual and organizational antecedents of misconduct in organizations. Journal of Business Ethics, 85(3), 309–332.

Arjmandniya, A. A., Hejazi, R., Boghosian, A., & Etemadi Eidgahi, S. (2019). Investigating the Effect of Constructing Social Accounts on Accountants' Unethical Behavior: With Mediating Role of Moral Disengagement and Guilt. Journal of Value & Behavioral Accounting, 4(7), 63-102. (In Persian)

Ariely, D., & Mann, H. (2013). A bird’s eye view of unethical behavior: commentary on Trautmann et al. (2013). Perspectives on Psychological Science, 8(5), 498-500.

Basyouni, S. S., & Chahine, E. F. (2011). Fear of punishment and causes of feelings of guilt in samples of Egyptian and Saudi preschool children. Procedia-Social and Behavioral Sciences, 30, 1022-1026.

Boda, Z., & Zsolnai, L. (2016). The failure of business ethics. Society and Business review, 11(1), 93-104.

Buchan, H. F. (2005). Ethical decision making in the public accounting profession: An extension of Ajzen’s theory of planned behavior. Journal of Business Ethics, 61, 165-181.

Global Economic Crime Survey. (2020). Fighting fraud: A never‑ending battle. https://www.pwc.com/hu/hu/kiadvanyok/assets/pdf/PwC_Global_Economic_Crime_and_Fraud_Survey_2020.pdf

Goel, S. (2019). Ethical Accounting: The Driver in Recovering Markets. Eurasian Business Perspectives: Proceedings of the 22nd Eurasia Business and Economics Society Conference (pp. 95-106). Springer International Publishing.

Hair, J. F., Hult, G. T. M., Ringle, C. M., & Sarstedt, M. (2022). A Primer on Partial Least Squares Structural Equation Modeling (PLS-SEM). 3rd Edition. Thousand Oaks: Sage.

Hofeditz, M., Nienaber, A. M., Dysvik, A., & Schewe, G. (2017). “Want to” versus “Have to”: Intrinsic and extrinsic motivators as predictors of compliance behavior intention. Human Resource Management, 56(1), 25–49.

Holmes, K., Marriott, L., & Randal, J. (2012). Ethics and experiments in accounting: A contribution to the debate on measuring ethical behaviour. Pacific Accounting Review, 24 (1), 80-100.

Husain, R., Paul, J., & Koles, B. (2022). The role of brand experience, brand resonance and brand trust in luxury consumption. Journal of Retailing and Consumer Services, 66, 102895.

Jannat, T., Alam, S. S., Ho, Y. H., Omar, N. A., & Lin, C. Y. (2021). Can corporate ethics programs reduce unethical behavior? Threat appraisal or coping appraisal. Journal of Business Ethics, 1-17.

Kaptein, M. (2015). The efectiveness of ethics programs: The role of scope, composition, and sequence. Journal of Business Ethics, 132, 415–431.

Karimabadi, M., Jahangirnia, H., Hajiha, Z., & Gholamijamkarani, R. (2022). Evaluating the Criteria of Professional Conduct in the Independent Audit Quality Profession, Financial Accounting and Auditing Researches, 14(55), 79-101. (In Persian)

Khajavi, S., Etemadi Eidadi, S., & Ghadirian Arani, M. (2020). Islamic ethics: a framework for the compilation of professional accounting practices. Journal Accounting and Social Interests, 10(3), 1-29. (In Persian)

Khozein, A., & Momeni Yanesari, A. (2019). The Investigation on Effect of Negative News Frequency on decreasing in Ethical Behavior of Accountants. Journal of Value & Behavioral Accounting, 3(6), 137-164. (In Persian)

Lin, X., Clay, P. F., Hajli, N., & Dadgar, M. (2018). Investigating the impacts of organizational factors on employees’ unethical behavior within organization in the context of Chinese firms. Journal of Business Ethics, 150, 779-791.

Matthews, L. (2017). Applying multigroup analysis in PLS-SEM: A step-by-step process. Partial least squares path modeling: Basic concepts, methodological issues and applications, 219-243.

Mehrani, S., Saghafi, A., Mousakhani, M., & Sepasi, S. (2011). Factors Affecting Iranian Certified Public Accountant's Ethical Decision Making, Journal of Ethics in Science and Technology, 6(3), 6-12. (In Persian)

Mohammadi, Y. M., & Heyrani, F. (2022). Investigating The Effect of Interaction of Job Type, Gender and Apparent Attractiveness of Auditors on Judging and Understanding Immoral Behaviors, Journal of Financial and Behavioral Researches in Accounting, 1(3), 23-46. (In Persian)

Mubako, G., Bagchi, K., Udo, G., & Marinovic, M. (2021). Personal values and ethical behavior in accounting students. Journal of business ethics, 174, 161-176.

Namazi, M., & Ebrahimi, F. (2016). Modeling and identifying effective factors affecting the intention of reporting financial fraudulent by accountant. Empirical Studies in Financial Accounting, 13(49), 1-28. (In Persian)

Nekmahmud, M., Ramkissoon, H., & Fekete-Farkas, M. (2022). Green purchase and sustainable consumption: A comparative study between European and non-European tourists. Tourism Management Perspectives, 43, 100980.

Nikbakht, M. R., Mehregan, M. R., Safari, H., & Masoudi, J. (2019). The Impact of Developing Ethical Behavior on Improving Professional Accountants' Behavior. Journal of Management Accounting and Auditing Knowledge, 8(29), 187-202. (In Persian)

Oboh, C. S., Ajibolade, S. O., & Otusanya, O. J. (2020). Ethical decision-making among professional accountants in Nigeria: the influence of ethical ideology, work sector, and types of professional membership. Journal of Financial Reporting and Accounting, 18(2), 389-422.

Rezalouei, A., & Mahdavi, G. (2020). Investigating the Impact of Conformity and Obedience Pressures on Financial Managers' Unethical Decision Making with Emphasis on the Moderating Role of Individual Characteristics. Journal of Value & Behavioral Accounting, 5(9), 81-115. (In Persian)

Remišová, A., Lašáková, A., & Kirchmayer, Z. (2019). Influence of formal ethics program components on managerial ethical behavior. Journal of Business Ethics, 160, 151-166.

Royaee, R., & Bayat, A., (2011). Ethics Training in Accounting: Investigating the Impact of Ethical Motivation on Ethical Behavior, Accounting Research, 3(9), 74-87. (In Persian)

Sadler, E., & Barac, K. (2005). A study of the ethical views of final year South African accounting students, using vignettes as examples. Meditari Accountancy Research, 13(2), 107-128.

Salmanpanah, N., & Talebnia, Gh., (2013). Factors affecting Iranian CPA's ethical judgment, Management accounting, 6(18), 87-96. (In Persian)

Sarikhani, M., Izadinia, N., & Daei-Karimzadeh, S. (2019). Investigating the Whistle-blowing Intentions Using the Theory of Planned Behavior and Moderating Role of Moral Intensity. Financial Accounting Knowledge, 6(1), 75-105. (In Persian)

Shad, S., Zeinali, M., Mohammadi, A., & Nahandi, Y. B. (2021). The Psychological Role of WorkPlace and Organizational Socialization in Improving Auditors' Ethics by Reducing Deviant Behaviors, Journal of Financial and Behavioral Researches in Accounting, 1(1), 87-106. (In Persian)

Tahmasebi, P., & Raznahan, F. (2020). The Impact of Ethical Plans on Job Satisfaction through Perceived Corporate Social Responsibility and Organizational Ethical Environment. Management and Development Process, 33(2), 98-73. (In Persian)

Treviño, L. K., Den Nieuwenboer, N. A., & Kish-Gephart, J. J. (2014). (Un) ethical behavior in organizations. Annual review of psychology, 65, 635-660.

Warren, D. E., Gaspar, J. P., & Laufer, W. S. (2014). Is formal ethics training merely cosmetic? A study of ethics training and ethical organizational culture. Business Ethics Quarterly, 24(1), 85-117.

Weber, J., & Wasieleski, D. M. (2013). Corporate ethics and compliance programs: A report, analysis and critique. Journal of business ethics, 112, 609-626.

Williford, K., & Small, D. (2013). Establishing an effective compliance program: An overview to protecting your organization. Association of corporate counsel.