EconPapers    
Economics at your fingertips  
 

Investigating ethical perceptions of short‐term earnings management practices

Leonie Jooste

International Journal of Emerging Markets, 2013, vol. 8, issue 3, 282-299

Abstract: Purpose - The failure of an entity is not necessarily an accounting and financial problem. It may include factors such as earnings management and personal values. The problem with managing earnings is it becomes an ethical practice, regardless of who is or may be affected by the practice or the information that flows from it. Therefore, the purpose of this paper is to survey students and business managers to measure their perceptions about the morality of earnings management actions. Accounting educators should aim to assist students to understand how they may react once confronted with an ethical conflict when in practice. Design/methodology/approach - This paper conducts a survey of undergraduate accounting students and business managers (MBA students) at a reputed international university. Undergraduate students, majoring in accounting and business managers were surveyed to measure their perception of specific earnings‐management actions. The questionnaire includes 20 items relating to ten earnings‐management practices. The respondents were required to rate each question on a five‐point scale ranging from 1, an ethical practice, to 5, totally unethical. The frequency distributions and the mean values were calculated, using a 0.05 difference in the mean values as significant. This paper uses a similar questionnaire as Giacomino and Akers. This questionnaire was originally used by Bruns and Merchant. Findings - The evidence in this paper shows that there is no significant difference between the perceptions of business managers and students regarding the morality of earnings management. Furthermore, the survey indicated that more courses must be offered at universities to address such aspects of ethics and earnings management. Originality/value - This paper indicates that business students need more exposure to and understanding of earnings management. There should be regular reports of fraudulent practices as a result of earnings management by the media and academic journals and greater emphasis should be placed in the accounting curricula on earnings management practices. However, difficult, it should be integrated into business courses or a separate business ethics course or an accounting course taught by accounting and ethics academia. Furthermore, Giacomino and Akers suggest that the “real‐world” aspects of earnings management practices be enhanced and that experienced business professionals become an integral part of accounting courses. By using experienced professionals during lectures and making discussions of earning more realistic, there is an expectation that the differences between students and business managers may be reduced.

Keywords: Accounting education; Universities; Curricula; Earnings management; Ethics; Personal values; Students; Bruns and Merchant study; Business managers (search for similar items in EconPapers)
Date: 2013
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (text/html)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (application/pdf)
Access to full text is restricted to subscribers

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eme:ijoemp:17468801311330338

DOI: 10.1108/17468801311330338

Access Statistics for this article

International Journal of Emerging Markets is currently edited by Prof Ilan Alon

More articles in International Journal of Emerging Markets from Emerald Group Publishing Limited
Bibliographic data for series maintained by Emerald Support ().

 
Page updated 2025-03-19
Handle: RePEc:eme:ijoemp:17468801311330338