مجله دانش حسابداری (Dec 2020)
Explaining the Ethical and Unethical Behaviors of Earnings Management Using Advanced Structural Models
Abstract
Objective: Stakeholders such as shareholders, legal entities, investors, and the financial services industry are often praised for their vital role in society. This issue occurs while others believe that the financial industry needs to strengthen the corporate strategy system to increase organizational capabilities and economic growth. A third group believes that those are involved in the financial industry can bring far-reaching benefits to society by reducing injustice in the distribution of poverty and income. Many researchers consider ethics as an important factor in dealing with behavioral anomalies. The purpose of this study is to explain the ethical and unethical behaviors of earnings management using advanced structural models. Method: The present study is of semi-experimental and semi-applied type and is performed by the qualitative or judgmental method in different stages. The field research was conducted after a random selection of 403 financial managers of the Tehran Stock Exchange. Results: Analysis of relationships between variables based on the method of structural equations showed that ethical pressure, organizational ethical beliefs, the culture of aversion to power, and ethical justification affect profit management behavior. Conclusion: The analysis of opinions consistency showed that there is a consensus about the ethical and immoral behaviors of earnings management between types of public opinions, regardless of gender, age, experience, marital status, and level of education and the public unanimously exposes the high importance of earnings management behaviors. Some compelling factors made it clear. After diagnostic tests consisting of the evaluation of normality of the distribution of variables, homogeneity of variances, confirmatory factor analysis, and validation of the estimation of the structural equation model, we used advanced structural equation models, path analysis, and regression estimation to interpret the direct relationship between directional behavior and the effective factors of moderating variables in these relationships. Finally, the coefficient of determination was estimated to validate the relationships and the t-student statistic was used to measure the significance of these relationships. Summarizing the relationships among variables showed that ethical pressures have positive impacts on the formation of one's moral beliefs and one's level of moral justification. Ethical justification has a positive impact on earnings management behaviors. The level of one's moral beliefs has a positive effect on his or her moral justification. Organizational culture for individual empowerment has a positive effect on ethical beliefs, ethical justification, and ultimately, on profit management behaviors. A person's moral beliefs exacerbate the relationship between the moral pressure on the individual and his or her level of moral justification. Finally, one's escapist culture exacerbates the relationship between ethical pressures on the individual and the emergence of profit management behaviors.
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