Reducing Accounting Aggressiveness with General Ethical Norms and Decision Structure

Kelly, Khim and Murphy, · Pamela R.,(2019), Reducing Accounting Aggressiveness with General Ethical Norms and Decision Structure. , Journal of Business Ethics, UNSPECIFIED

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We examine the impact of activated (salient) versus non-activated ethical norms on the aggressiveness of accounting decisions, in the presence of self-interest favoring aggressiveness. Using a case in which the accounting rules are ambiguous, we ask professional accountants to make an accounting decision as though they were in their own organization; we measure the ethical norms of their organization at the end of the experiment. Based on the focus theory of normative conduct, we argue that the general ethical norms of the participants’ organizations are activated when the decision structure is such that the participant receives a recommendation from a subordinate, whereas those norms are not activated when the participant is making the decision alone. We fnd that higher ethical norms decrease aggressiveness when the decision maker receives a recommendation, whereas higher ethical norms have no impact on aggressiveness when the decision maker makes the decision alone. Our results demonstrate that general ethical norms, known to impact decisions having clear ethical content, can also curb accounting aggressiveness when these norms are activated. Furthermore, frm practices such as decision structure can activate norms. These fndings are of interest to practitioners and regulators who seek to temper aggressive accounting.
Keywords : Norms · Ethical norms · Aggressive accounting · Accounting decision-making, UNSPECIFIED
Journal or Publication Title: Journal of Business Ethics
Item Type: Article
Subjects: Akuntansi
Depositing User: Eriana Ringgowati
Date Deposited: 16 Dec 2019 03:31
Last Modified: 16 Dec 2019 06:24

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