Bases and Grounds of Accountant’s Ethical Evaluation of Fraud: Religion, Philosophy and Environment Viewpoints

Document Type : Research Paper

Author

Assistant Prof., Department of Accounting, Yazd Branch, Islamic Azad University, Yazd, Iran.

Abstract

Objective: Companies have various organizational structures and individuals without very strong ethical orientation may succumb to the unethical practices which causes fraud in such workplaces. The aim of this study is to investigate the environmental, philosophical, and religious factors of accountant’s ethical evaluation of fraudin accounting profession.
Methods: In this study, religiosity in three dimensions of personal, social life, and morality has been investigated. Additionally, environmental conditions in two aspects of intrinsic and extrinsic factors and philosophical views of machiavellianism and utilitarianism have been chosenand their effects on ethical evaluation of fraud in four dimensions have been examined.The research data to test hypotheses is collected from 300 questionnaires filled by accountants in spring of 2020and analyzed by structural equation modeling using LISREL software.
Results: The findings show inverse effect of religiosity in morality on fraudin companies, while religiosity in social andpersonal life have no significant effect. Besides that, machiavellianism and utilitarianism views have positive and significant effects on ethical evaluation of fraud in accounting, moreover, intrinsicand extrinsic grounds of accountants ’ethical evaluation have no significant effect.
Conclusion: The evidence confirms that religiosity in morality and philosophical bases have positive effects on ethical evaluation of fraud while intrinsicand extrinsic grounds have no significant effect, so it can be concluded that to reduce and prevent fraud, factors affecting the individuality of accountants such asreligiosity in morality and philosophy are very important and should be considered.

Keywords


 
Aaken, D., & Buchner, F. (2020). Religion and CSR: a systematic literature review. Journal of Business Economics, 90, 917–945.
Adams, C.A. (2004). The Ethical, Social and Environmental Reporting-Performance Portrayal Gap. Accounting, Auditingand Accountability Journal, 17(5), 731-757.
Ahinful, G., Addo, Sh., Boateng Felix, O., & Danquah Boakye, J. (2017). Accounting Ethics and the Professional Accountant: The Case of Ghana. International Journal of Applied Economics, Finance and Accounting, 1(1), 30-36.
Al Aidaros, H., Shamsudin, F., & Idris, K. (2013). Ethics and Ethical Theories from an Islamic Perspective. International Journal of Islamic Thought, 4, 1-13.
Atefi, M. & Barzegar, E. (2017). The Nature of Monetary Ethics and Accounting Students’ Ethical Perception: The Role of Individual Characteristics. Journal of Accounting and Auditing Review, 23(4), 507-526. (in Persian)
Dahling, J.J., Whitaker, B.G., & Levy, P.E. (2009). The development and validation of a new machiavellianism scale.Journal of Management, 35(2), 219-257.
Dianati, Z., Rezapoor Parvaresh, R. (2015). Relation between Corporate Ethics, Social Responsibility, Machiavellianism and Tax Avoidance. Ethics in science and Technology, 9 (4), 1-12. (in Persian)
Esmaili Kia, GH., Najafnia, S., & Oshani, M. (2019). Investigating the Relationship between External Corporate Governance Mechanisms and Financial Fraud, Focusing on Cognitive Evaluation Theory Insights on Agency Theory Prescriptions. Journal of Accounting and Auditing Review, 26(2), 169-192. (in Persian)
Hashemi, S. & Hariri, A. (2018). The Analysis of Benford's Law Ability to Identify and Predict Financial Fraud Detection. Journal of Accounting and Auditing Review, 24(2), 283-302. (in Persian)
Hunt, S.D., & Vitell, S.J. (2006). The general theory of marketing ethics: a revision and three questions. Journal ofMacromarketing, 26, 1-11.
Imhoff, J. E.A. (2003). Accounting quality, auditing and corporate governance. Accounting Horizons, 117–128.
Jenkins, J. (2003). Ethics and religion. (Heinemann Advanced Religious Studies). 2nd edition. Oxford: Heinemann Educational Publishers.
Kurniawan, A., & Anjarwati, A. (2020). Does love of money, Machiavellian, religiosity, socioeconomic status, and understanding of the accountant's code of ethics affect the ethical perception of accounting students. Advances in Economics, Business and Management Research, 123, 33-37.
Lau, T. (2010). The good, the bad and the ugly: The shifting ethical stance of Malaysian consumers. Intangible Capital, 6(2), 236-257.
Lawshe, C.H. (1975). A quantitative approach to content validity. Phrsonnhl Psychology, 28, 563-575.
Low, M., Davey, H., & Hooper, K. (2008). Accounting scandals, ethical dilemmas and educational challenges. CriticalPerspectives on Accounting, 19, 222-254.
Maranjory, M., Vakilifard, H., & Pour Zamani, Z. (2017). Tendency toward Machiavellianism Behavior & the Auditors’ Attitude toward Unethical Marketing Methods. Ethics in science and Technology, 12(3), 99-108. (in Persian)
McGee, R., Benk, S., & Yüzbaşı, B. (2015). Religion and Ethical Attitudes toward Accepting a Bribe:A Comparative Study. Religions, 6, 1168–1181.
Moshashaei, S., Hashemi, S., & Foroughi, D. (2018). The Effect of Auditors’ Individual Differences on Their Professional Commitment: The Mediation Effect of Ethical Climate Fit. Accounting and Auditing Review, 25(3), 415-432. (in Persian)
Namazi, M., & Ebrahimi, F. (2017). Modeling and Identifying Effective Factors Affecting the Intention of Reporting Financial Fraudulent by Accountant. Empirical Studies in Financial Accounting, 12(49), 1-48. (in Persian)
Nikomaram, H., Jalili, A., & Rahnamay Roodposhti, F. (2012). Conceptual Model for Behavioral Accounting. Journal of Management Accounting and Auditing Knowledge, 1(1), 55-72. (in Persian)
Rahimi Kakolaki, M., Banitalebi Dehkordi, B., & Peikfalak, J. (2017). Effective Factors on Performing Professional Ethics by Accounts. Ethics in science and Technology, 12 (1), 75-87. (in Persian)
Royaei, R., Taleb Nia, Gh., Hassas Yegane, Y., & Jalili, S. (2013). Relationship Between Personal Moral Philosophy and Demographic Characteristics with Audit Quality Reduction Behaviors. Management Accounting, 6(16), 15-26. (in Persian)
Sadeghian, M., Banimahd, B., Jahangir Nia, H., & Gholami Jamkarani, R. (2019). Journal of Accounting and Auditing Review, 26(3), 413- 434. (in Persian)
Safari, Z., Banimahd, B., & Mousavi Kashi, Z. (2018). Machiavellianism and Auditor's Individual Effectiveness. Journal of Management Accounting and Auditing Knowledge, 7(26), 105-120. (in Persian)
Singhapakdi, A., Marta, J.K., Rallapalli, K.C., & Rao, C.P. (2000). Toward an understanding of religiousness and marketing ethics: An empirical study. Journal of Business Ethics, 27, 305-319.
Tashdidi, E., & Sepasi, S. (2019). Designing a Model for Preventing and Controlling Fraud based on Grounded Theory. Quarterly financial accounting journal, 10 (40), 29-50.
(in Persian)
Toker Gökçe, A. (2015). Relating teachers' whistleblowing tendency and personal features: Machiavellianism, religiosity, and utilitarianism. Educational Research, 25(4).
Toker Gokce, A. (2017). Development of the Ethical Evaluation Questionnaire: A Machiavellian, Utilitarian, and Religious Viewpoint. European Journal of Educational Research, 6(1), 79 - 92.
Toker-Gokce, A. (2013). Relationship between whistle-blowing and job satisfaction and organizational loyalty at schools in Turkey. Educational Research and Reviews. 8(14), 1186-1197.
Toker-Gokce, A. (2016). The effect of teachers’ spirituality and ethical ideology on their preference of reporting wrongdoings at schools. International Education Studies, 9(5), 85-95.
Torres, M. B. (2001). Character and decision-making (Doctoral dissertation). IESE: University of Navarra. Pamplona, Spain, Retrieved from www.iese.edu/research/pdfs/T_103.pdf.
Tutino, M., & Merlo, M. (2019). Accounting Fraud: A Literature Review, Risk Governance and Control. Financial Markets & Institutions, 9(1), 8-25.
Utami, I., Yosephine, W.A. & Nafsiah, M. (2019). Fraud Intention and Machiavellianism: An Experimental Study of Fraud Triangle. International Journal of Financial Research, 10(5).
West, A. (2017). The ethics of professional accountants: An Aristotelian perspective. Accounting, Auditing andAccountability Journal, 30(2), 1-28.
Woiceshyn, J. (2011). A model for ethical decision making in business: Reasoning, intuition, and rational moral principles. Journal Business Ethics, 104, 311–323.