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Gadjah Mada International Journal of Business Vol.
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: 107 - 123 Ethical Ideology and Ethical Judgments of Accounting Practitioners in Malaysia Suhaiza Ismail Faculty of Economics and Management Sciences.
International Islamic University Malaysia Nazli A.
Mohd Ghazali Faculty of Economics and Management Sciences.
International Islamic University Malaysia Abstract: The paper intends to explore the ethical ideology and ethical judgments of accounting practitioners in Malaysia.
The objectives of this study are twofold.
First, the paper intends to examine the factors that contribute to the different ethical ideology among Malaysian accounting practitioners.
Second, it aims to investigate the influence of demographic factors and ethical ideology on ethical judgments of accounting practitioners.
The study used ForsythAos .
Ethics Position Questionnaire instrument to examine the ethical ideology of the accountants and adopted ethics vignettes used by Emerson et al.
to assess the ethical judgments of the respondents.
From the statistical analysis, this study found that age and gender have a significant impact on ethical judgment but not on ethical ideology.
In addition, idealism and relativism have a significant influence on ethical judgment, especially in a legally unethical Abstrak: Penelitian ini bertujuan untuk mengeksplorasi ideologi dan pertimbangan etik dari para praktisi akuntansi di Malaysia.
Tujuan dari penelitian ini terbagi menjadi dua.
Pertama, bertujuan untuk meneliti faktor-faktor yang berkontribusi terhadap perbedaan ideologi etik diantara para praktisi akuntansi di Malaysia.
Kedua, bertujuan untuk mengetahui pengaruh faktor demografi dan ideologi etik terhadap pertimbangan etik di antara praktisi akuntansi.
Penelitian ini menggunakan instrument kuesioner Ethics Position Questionnaire Instrument (ForsythAos 1.
untuk menguji ideologi etik para akuntan dan mengadopsi sketsa etik yang digunakan .
alam Emerson dkk.
untuk menguji pertimbangan etik dari para Dari analisis statistik, penelitian ini menemukan bahwa usia dan gender memiliki dampak yang signifikan terhadap pertimbangan etik namun tidak pada ideologi etik.
Selain itu, idealisme dan relativisme memiliki pengaruh signifikan terhadap pertimbangan etik, terutama pada situasi dimana tidak ada etika Keywords: accounting practitioners.
ethical ideology.
ethical judgment.
Malaysia.
Corresponding authors.
E-mail: suhaiza@iium.
ISSN: 1141-1128
http://w.
Ismail and Ghazali Introduction Ethics is crucial in all professions including the accounting profession.
The important role of accountants in ensuring the welfare of various stakeholders requires that accounting practitioners maintain a high ethical standard.
However, the credibility of the accounting profession has, to some extent, been damaged by the various well-publicised corporate scandals that involved accounting practitioners such as Enron and World.
in the United States of America and Parmalat in Europe.
In Malaysia, according to the former president of the Malaysian Institute of Accountants (MIA) there are AoMalaysian Enrons (Abdullah 2.
In particular, the case of an air cargo carrier Transmile Group Bhd whereby the company was alleged for having overstated its revenue by a total of RM522 million for three years from 2005 to Other financial irregularity cases reported to have occurred in recent years in Malaysia that were committed by accountants include Megan Media Holdings Bhd and Wimems Corporation Bhd (Abdullah 2007.
and Othman and Abdul Rahman 2.
The seriousness of ethical issues in the accounting profession in Malaysia is a matter of concern of its accountancy profession regulator .
MIA) as voiced by its president (Abdullah Despite continuous action by responsible professional accounting bodies such as the issuance of the International Education Standards 4 (IES .
on Professional Values.
Ethics and Attitudes by the International Federation of Accountants (IFAC) in 2003 and the introduction of a compulsory ethics module called Professional Ethics, the Association of Chartered Certified Accountants (ACCA) in 2007 (Abu Bakar et al.
in order to restore the public confidence and credibility of the accounting profession, it is crucial to investigate factors affecting ethical attitudes of accounting practitioners.
Furthermore, differences in an individualAos characteristics were claimed to affect a personAos ethical decision making .
ee for example:
Ferrell and Gresham 1985.
Hunt and Vitell Jones 1991.
and Treveno 1.
Similarly, the ethical belief or ideology of an individual has been reported to have an effect on the ethical judgment .
ee for example:
Barnett et al.
1994, 1996.
Kim 2003.
Kleiser et al.
Steenhout and Keenhove 2006.
and Callanan et al.
Hence, the present study intends to investigate the ethical ideology and ethical judgment of accounting practitioners.
Even though a burgeoning body of ethics literature has examined the issues of ethical ideology and ethical judgment .
or instance: Arrington and Reckers 1985.
Hunt and Vitell 1986.
Trevino 1986.
Shaub et al.
Douglas et al.
, most were from developed countries and there is a paucity of published research examining the ethical ideology and ethical judgment in the developing countries, particularly in Malaysia.
Moreover, previous studies were reported to have inconclusive findings on the factors affecting ethical ideology and ethical judgment.
For example.
Forsyth .
0 and 1.
Vitell and Singhapakdi .
and Greenfield et al.
claimed to have found ethical ideology to have a significant effect on ethical decision whilst studies by Marques and Azevedo AePereira .
reported an insignificant result.
Likewise, mixed results were reported by prior studies on the effect of demographic profile on ethical judgment .
or example: Cohen et al.
versus Hartikainen and Tortilla .
and Vitell et al.
versus Roozen et al.
on the effect of gender and age respectively on ethical decisio.
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The objectives of this study are twofold.
First, this present study intends to examine the demographic factors that contribute to the different ethical ideology among accounting practitioners in Malaysia.
Second, this study aims to investigate the influence of demographic factors and ethical ideology on the ethical judgments of Malaysian accounting practitioners.
The remaining part of this paper is structured as follows.
The next section offers reviews of relevant prior literature on the issues of ethical ideology and ethical judgment.
Then, the following section describes the research methodology of this study including the instrument, the sample respondents, the survey procedures and the statistical analysis adopted in conducting this research.
Next, the findings of this study are discussed and finally a concluding section is offered containing implications, limitations of the study and suggestions for future research in the area.
Literature Review and Hypothesis Development Generally, this paper addresses two main relationships: .
the influence of demographic factors on ethical ideology.
the effect of demographic factors and ethical ideology on ethical judgment.
Hence, the review of literature covers these key issues and the hypotheses are presented accordingly.
Ethical Ideology Ethical ideology, also known as ethical orientation or ethical philosophy, refers to a set of beliefs, attitudes, and values that guide individuals in making decisions on ethical is- sues (Forsyth and Nye 1990.
and Barnett et Forsyth .
proposed that differences in ethical ideology between individuals could be explained by two factors.
idealism and relativism.
Idealism refers to the extent to which a person believes that a positive outcome is the result of taking the most ethical action.
Idealists believe that harming others is universally not acceptable and should be avoided, even in cases of situational urgency (Forsyth 1980, 1.
Relativism, however, refers to the extent to which a person rejects universal moral rules in making ethical decisions.
Relativists weigh specific circumstances and personal values more than the relevant moral rules when distinguishing between right and wrong (Forsyth.
Ethical Ideology and Ethical Judgment Ethical ideology is claimed to be an important factor that influences an individualAos ethical judgment (Schlenker and Forsyth 1977.
Forsyth 1980.
Hunt and Vitell Ethical judgment refers to the degree to which a particular behaviour is considered ethical by an individual (Reidenbach and Robin 1.
In making ethical judgment, idealists use idealistic rather than practical criteria (Swaidan et al.
Highly idealistic individuals Aoassume that desirable consequences can, with the AurightAy action, always be obtainedAo (Forsyth 1980: .
In contrast, less idealistic individuals do not believe that their action should always produce positive consequences, since they admit that undesirable consequences may sometimes be necessary to achieve a greater good (Forsyth 1980 and 1.
In relation to relativism, a highly relativist individual declines to rely on moral rules in making decisions on ethical matters Ismail and Ghazali (Forsyth 1.
While less relativistic individuals tend to act in conformity with universal moral principles (Forsyth 1.
Abundant literature has examined the impact of ethical ideology on the ethical judgments of people from various backgrounds including accounting and other business related professions (Arrington and Reckers Trevino 1986.
Shaub et al.
Douglas et al.
Prior evidence suggests that highly idealistic individuals, who believe that it is possible to avoid harm to others if the morally right action is undertaken, have been reported to judge unethical matters more strictly (Forsyth 1980, 1981, and 1.
Whereas, highly relativist individuals who strongly reject absolute rules and law but closely investigate the situational factors that contribute to oneAos action, have a tendency to be more lenient in making ethical decisions (Forsyth 1980, 1981, and 1985.
Vitell and Singhapakdi 1.
This is in agreement with the findings by Arrington and Reckers .
who also claimed that more idealistic .
individuals judged tax evasion as more .
serious, and were more .
likely to view tax compliance as a social norm.
Likewise.
Greenfield et al.
assessed the ethical orientation of business students concerning earnings management decisions and claimed a significant relationship, in which more idealistic .
individuals were less .
likely to engage in earnings management behaviour.
Douglas et al.
found that more idealistic auditors rated questionable actions more negatively and Shaub et al.
reported that highly relativistic auditors were less sensitive to ethical situations.
Other studies that found a significant positive .
relationship between idealism .
and ethical judgment include Barnett et al.
Kim .
Kleiser et al.
Steenhout and Keenhove .
and Callanan et al.
In contrast.
Barnett et al.
claimed to have found a significant negative relationship between idealism and ethical judgment.
more recent study by Marques and AzevedoPereira .
claimed to find no significant relationship between the ethical ideology and ethical judgment of accountants in Portugal.
Despite the mixed findings on the relationship between ethical ideology and ethical judgment, evidence from the majority of prior empirical studies implies that highly idealistic .
ess relativisti.
individuals tend to be more intolerant of ethical situations.
the following hypotheses are offered:
H1: Idealism is positively associated with ethical H2: Relativism is negatively associated with ethical Barnett et al.
, who investigated the effects of ethical ideology on ethical judgment of business students, suggested that ethical ideology is a stronger influential factor in explaining the ethical judgment of individuals when the situation is more unethical.
The finding was supported by Bass et al.
who only found significant differences in ethical judgments due to ethical ideology in the scenario judged most unethical, and also by Douglas et al.
who evaluated the effect of ethical orientation on ethical judgments of 368 accountants from two international accounting firms and found that ethical orientation is related to ethical judgment in high moral intensity situations.
This suggests that ethical ideology can influence ethical decisions depending on the level of severity of the matter.
In other words, looking from legal perspective, as ethical conducts can be judged as either legal or illegal (Emerson and Conroy 2004.
Emerson et al.
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more severe than the legal ethical conduct.
The relationship between ethical ideology and ethical judgment will therefore depend on the legality status of the ethical issue .
severity or seriousness of the ethical Specifically, a more idealistic .
ess relativisti.
person will be less accepting of an ethical situation that is violating the law than if the ethical situation is not legally wrong as illegal conduct will normally result in greater harm or more negative implications (Emerson and Conroy 2004.
Emerson et al.
As the present study considers the influential factors of ethical judgment in two ethically questionable scenarios, which are different in terms of their legality based on the decision of the criminal court, and from the above discussion, the following hypotheses are also tested in this study:
H3: There is an association between ethical ideology and ethical judgment in an illegal ethical situation H4: There is an association between ethical ideology and ethical judgment in a legal ethical situation Factors Influencing Ethical Ideology and Ethical Judgment Prior research in the area of ethics has demonstrated that age, gender and academic qualifications are the potential determinants of ethical ideology and ethical judgment.
Hence, the subsequent review of the literature will cover earlier studies that have attempted to investigate the influence of each of these determinants on ethical ideology and ethical judgment and the relevant hypotheses are proposed.
Gender Based on previous studies, gender is an important determinant in explaining the dif- ferences in ethical ideology and ethical judgment.
Although there were studies that found no significant difference between gender and ethical ideology .
ee for instance: Forsyth et Singhapakdi et al.
Swaidan et Fernando et al.
and Marques and Pereira 2.
, a number of other studies reported a significant relationship between gender and ethical ideology.
Barnett et al.
4 and 1.
and Singhapakdi and Vitell .
found that women were more idealistic and more relativistic than men.
Hartikainen and Tortilla .
claimed that women were more idealistic and less relativistic than men.
Similarly.
Bass et al.
and McHoskey .
reported that women were more idealistic than men, however, neither study found a significant difference in the relationship between gender and the level of relativism.
Although the empirical findings on gender differences of ethical ideology were mixed, to some extent, prior studies tend to concur that women are more idealistic than men.
However, less evidence was found concerning the relationship between gender and relativism.
Hence, the following hypotheses are proposed in this study:
H5: Female accounting practitioners will have a higher level of idealism than male accounting H6: There will be a difference in the relativism level for female and male accounting practitioners Although there has been an abundance of studies that investigated the influence of gender on ethical judgment, the results were A meta analysis by Borkowski and Ugras .
reported that nearly half of the studies yielded a significant result on the relationship between gender and ethical A number of studies reported that women have higher ethical attitudes than men (Akaah 1989.
Cohen et al.
Dawson Ismail and Ghazali Ruegger and King 1992.
Weeks et al.
There were also studies that found no significant differences between the ethical judgments of men and women (Hartikainen and Tortilla 2004.
Radtke 2000.
Serwinek Shafer et al.
Sikula and Kosta Stanga and Turpen 1.
Based on the previous results that claimed that females are stricter than men in their ethical decisions, the hypothesis on the relationship between gender and ethical judgment for this study will be as follows:
H7: Female accounting practitioners will make stricter ethical judgments than male practitioners Age Age is another factor that has been claimed to influence the ethical ideology and ethical judgment of an individual.
Vitell et .
reported a positive relationship between age and idealism, which suggested that older people tend to have greater concern for the welfare of others than self-interest.
Moreover, older people tend to rely more on universal moral principals when making ethical judgments, which suggests a negative relationship between age and relativism (Bass et al.
Fernando et al.
These arguments were supported by Bass et al.
, and Hartikainen and Torstila .
, whose studies claimed that older people are more idealistic and less relativistic than those who are younger.
Hence, the following hypotheses will be tested:
H8: Older accounting practitioners will be more idealistic than younger accounting practitioners claimed that mature individuals have a higher level of ethical judgment than younger individuals.
A number of prior studies including Rawwas and Singhapakdi .
Vitell et al.
and Ruegger and King .
supported this idea in which age is positively related to ethical judgment.
However, there are also studies that found a negative relationship between age and ethical decision making, for instance.
Roozen et al.
and Sankaran and Bui .
, who observed that older people were less ethical than those who were younger.
Consistent with KohlbergAos theory, this present study predicts a positive relationship between age and ethical judgment.
hence, the following hypothesis is proposed:
H10: Older accounting practitioners will have a higher level of ethical judgment than the younger accounting practitioners Academic Qualification Academic qualification is another significant determinant for ethical ideology and ethical judgment.
In terms of its relationship with ethical ideology, while Bass et al.
claimed that education did not significantly affect the ethical ideology, the studies by Ho et al.
and Singhapakdi et al.
found that individuals with a higher education level were less idealistic than individuals with a lower academic qualification.
However, neither study found a significant relationship between academic qualification and the ethical ideology of relativism.
Based on the above findings, it is hypothesized that:
H9: Older accounting practitioners will be less relativistic than younger accounting practitioners H11: Accounting practitioners with a professional qualification will be less idealistic than those without a professional qualification.
Kohlberg .
9, 1.
, in his proposed theory of moral cognitive development.
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relativism to those without an accounting professional qualification.
In the context of the relationship between education and ethical judgment, there were studies supporting the idea that more educated individuals were more ethical (Browning and Zabriskie 1983.
Jones and Gautschi Razzaque and Hwee 2002.
Swaidan However, similar relationship studies, such as Deshpande .
Dubinsky and Ingram .
Kidwell et al.
Merrit .
and Shafer et al.
, found no evidence that education is related to ethical Although there are mixed findings, rationally the higher education an individual has, the better the person will be in making ethically related decisions.
Moreover, as this present study assesses the education level based on whether a person has a professional accounting qualification or not, it is hypothesized that:
H13: Accounting practitioners with a professional qualification will be stricter in making ethical Methodology Research Instruments The questionnaire comprises three sections: demographic information of respondents, ethical position questions and ethical In assessing individual ethical orientation or ideology.
Forsyth .
introduced an instrument called the Ethics Position Questionnaire (EPQ), which was later adopted by many researchers.
This study adapted ForsythAos .
ethics position questionnaire (EPQ) to measure the respondentsAo ethical ideology.
The EPQ consists of 20 items, of which ten items measure ideal1 ism and the remaining ten items are related to relativism.
A five-point Likert scale was used .
being AoAostrongly disagreeAoAo and 5 being AoAostrongly agreeAoA.
to measure agreement with each item.
For each respondent, the idealism and relativism scores were computed by averaging the responses to the items of each construct.
The data reveal CronbachAos alpha values of 0.
77 and 0.
82 for idealism scale and relativism scale respectively which imply that the scales have adequate internal To measure the ethical judgment of the accountants, two vignettes representing questionable ethical situations were used.
The vignettes were adopted from Emerson et al.
however, they were initially developed by Longernecker et al.
Clark .
and Harris .
The first vignette is about underreporting of companyAos income to reduce taxation and the second vignette is on accounting tricks to conceal.
The detailed descriptions of the two vignettes as appear in the questionnaire are as follows:
AoVignette 1:A small business received one-fourth of its gross revenue in the form of The owner reported only one-half of the cash receipts for income tax purposes,Ao and AoVignette 2:A comptroller selected a legal method of financial reporting which concealed some embarrassing financial facts that would otherwise have become public Ao The difference in the two vignettes is that in one of the two questionable ethical situations the ethical action involved is legal (Vignette .
based on the criminal legal standards, while in the other situation (Vignette .
it is an illegal action.
1 The rational for having the two different types of ethical situa- Emerson et al.
offers greater discussion on the legality status of the situations.
Ismail and Ghazali tions is to see if there is difference in the respondentsAo acceptability of the ethical issue due to the legality of the action.
For each vignette, respondents were asked to indicate their level of acceptance of the described questionable ethical action on a seven-point Likert scale ranging from always acceptable .
to never acceptable .
Thus, a higher score implies a lower acceptability to the ethical scenario or a stricter ethical judgment.
Research Sample and Data Collection Procedures A total of 250 questionnaires were distributed to accounting practitioners attached to audit firms registered with the Malaysian Institute of Accountants (MIA).
To facilitate the distribution of the questionnaires, the researchers sought the assistance of students of the researchersAo institution who were undergoing practical training with the registered audit and accounting firms during the questionnaire distribution period.
The respondents were politely approached by these students to request their participation in the survey.
Each potential respondent received a cover letter and a copy of the questionnaire.
The cover letter explained the purpose of the study and assured the confidentiality of answers given by respondents.
It took respondents, on average, 15 minutes to complete the questionnaire.
Two weeks after the distribution of the questionnaires, the students helped to collect the questionnaires from the respondents and passed them to the researchers.
A total of 221 respondents completed the questionnaire, representing a response rate of approximately 88.
4 percent.
Data Analysis The data were analysed using the Statistical Package for the Social Sciences (SPSS) Basically, the descriptive statistics consist of frequency distributions and percentages were tabulated to develop demographic profiles of accounting practitioners in Malaysia.
In addition, a descriptive analysis of the mean score and standard deviation were computed for the Likert-scale questions including the ethical ideology items and the ethical judgment for the vignettes.
In testing the hypotheses, multiple regression models were developed.
In the first two models that were relevant for testing hypotheses H5.
H6.
H8.
H9.
H11 and H12, the mean score of idealism or relativism was the dependent variable for each model while the independent variables were age, gender and professional The two relevant models are as Model 1:
IDEALISM =A A1GENDER
A2AGE
A3PROFFESIONAL
QUALIFICATION Au Model 2:
RELATIVISM = A A1GENDER
A2AGE
A3PROFFESIONAL
QUALIFICATION Au In testing the remaining hypotheses, a set of three regression models were used whereby for each model the score for ethical judgment was the dependent variable, while age, gender, professional qualification, idealism and relativism were the dependent variables.
the three models, two represent the ethical judgment of each vignette and one model for the average ethical judgment score of the two The models are as follows:
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Model 3:
ETHICAL JUDGMENTOVERALL = A
A1GENDER A2AGE
A3PROFFESIONAL QUALIFICATION
A4IDEALISM A5RELATIVISM Au Model 4:
ETHICAL JUDGMENTILLEGAL = A
A1GENDER A2AGE
A3PROFFESIONAL QUALIFICATION
A4IDEALI A5RELATIVISM Au Model 5:
ETHICAL JUDGMENTLEGAL = A
A1GENDER A2AGE
A3PROFFESIONAL QUALIFICATION
A4IDEALISM A5RELATIVISM Au IDEALISM: Mean score of 10 relevant EPQ items measured on a 5 point Likert scale where 1= Strongly disagree.
5= Strongly RELATIVISM: Mean score of 10 relevant EPQ items measured on a 5 point Likert scale where 1= Strongly disagree.
5= Strongly ETHICAL JUDGMENT: Acceptability to ethical situation measured on a 7 point Likert scale where 1 = Always acceptable.
7= Never
PROFESSIONAL QUALIFICATION: 1=
holding an accounting professional qualification.
0 = without an accounting professional Findings and Discussion Descriptive Statistics Table 1 depicts the demographic information of the respondents of this study with the majority of the respondents being female .
4%).
Most of them were less than 30 years old .
%) and, therefore, were new to the accounting career with less than five years of related working experience .
9%).
percent of the respondents were professionally qualified accountants attached to either international or local professional accounting bodies.
In relation to the ethical ideology, the mean score for idealism of the respondents 84 with a standard deviation of 0.
which was slightly higher than the relativism mean score of 3.
51 and standard deviation For the ethical judgment, the mean acceptability score for the illegal vignette was 36 and a standard deviation of 1.
56, while the mean score for the legal vignette was 4.
and a standard deviation of 1.
The average mean score of the two vignettes was 5.
and a standard deviation of 1.
The results indicate overall less acceptability for both situations with even less acceptability for the illegal situation.
GENDER: 1= Male.
2 = Female Effect of Gender.
Age and Professional Qualifications on Ethical Ideology AGE: 1= Less than 20 years.
2= 20-29 years.
3= 30-39 years.
4= 40-49 years.
5= 50-60
Table 2 provides the findings of the two regression models, with idealism or relativism as the dependent variable, while age, gender.
Ismail and Ghazali Table 1.
Demographic Data
Frequency Percent
Male
Female Less than 20 years 20-29 years 30-39 years 40-49 years 50-60 years Total
Professional Affiliation CPA
ACCA
MICPA
CIMA
Others None Total Gender Total Age Total Working Experience in Accounting Field Less than 5 years 5-10 years 11-15 years 15-20 years More than 20 years Total Current Position Executive Senior Executive Manager Senior Manager Partner Missing data Gadjah Mada International Journal of Business - May - August.
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Table 2.
Determinants of Idealism and Relativism Idealism
Relativism Coeff
t-stat
Coeff
t-stat
Constant
431 ***
487 ***
Gender
055 ***
Age
121 ***
Professional qualification Adj R2 F-statistics 13 ** *** significant at 1%, ** significant at 5%, * significant at 10% accounting professional qualification are the independent variables.
The results depict that gender has a positive significant effect on idealism at the 1 percent significance level.
The results suggest that female accounting practitioners are more idealistic than their male counterparts.
The finding lends support to evidence reported by Barnett et al.
4 and 1.
Singhapakdi and Vitell .
Hartikainen and Tortilla .
Bass et al.
and McHoskey .
Hence, hypothesis H5 is supported.
Similarly, the effect of age on idealism was positively significant, which implies that older accounting practitioners were more idealistic than their younger counterparts, which is consistent with the finding claimed by Bass et al.
, and Hartikainen and Tortills .
in their studies.
The finding, therefore, supports hypothesis H8.
The results concerning the effect of gender on relativism, however, were not significant, and therefore not supportive of hypothesis H6, which suggests that there is a difference in the relativism level of Malaysian male and female accounting practitioners.
The results in Table 2 also reveal that professional qualification has no significant influence on either idealism or relativism.
This indicates that regardless of whether or not the accounting practitioners were professionally qualified it did not influence their idealism or relativism The results seem to support Bass et Aos .
finding, however, they were in contrast with the evidence reported by Ho et .
, and Singhapakdi et al.
concerning the relationship between qualification and idealism.
The findings, therefore, do not support hypotheses H11 and H12.
Effect of Gender.
Age.
Professional Qualification and Ethical Ideology on Ethical Judgment Table 3 shows the results of the statistical analysis for the individual vignette as well the overall results on the effect of gender, age, professional qualification, idealism and relativism on the ethical judgment of accounting practitioners.
Based on the overall results, ethical judgment was significantly influenced Ismail and Ghazali by all determinants except for professional The results suggest that female and older accounting practitioners had higher ethical attitudes than the male and younger The results are consistent with the evidence of prior studies concerning the effect of gender (Akaah 1989.
Ruegger and King 1992.
Dawson 1997.
Weeks et al.
and Cohen et al.
and age (Vittel 1986.
Vitell et al.
Ruegger and King 1992.
and Rawwas and Singhapakdi 1.
on ethical judgment.
Hence, hypotheses H7 and H10 are supported.
The results also indicate that more idealistic individuals have higher ethical attitudes than less idealistic individuals.
However, this study also found that less relativistic individuals were less accepting to ethical situations than high relativistic individuals.
The results concerning the positive .
relationship between idealism .
and ethical judgment found in this study are consistent with previous studies, such as by Barnett et .
Doughlas et al.
Kim .
Kleiser et al.
Steenhout and Keenhove .
Greenfield et al.
and Callanan et al.
These findings, therefore, support hypothesis H1 and H2.
However, the results for the individual vignette are mixed.
Although age and professional qualification remain a significant and insignificant influence, respectively, for both vignettes, the results for other factors are inconsistent.
Gender had a significant effect on ethical judgment of the legally ethical vignette but was insignificant for the illegal ethical This suggests that females are more sensitive to ethical issues as they are less accepting to questionable ethical issues regardless of the legality of the issues.
Table 3.
Effects of Determinants on Ethical Judgment
Characteristics of Respondents Illegal
Legal Ethical Vignette Ethical Vignette Overall Coeff
t-stat
Coeff
t-stat
Coeff
t-stat
Constant
688 ***
344 ***
Gender
609 ***
215 ***
Age
446 ***
456 ***
436 ***
Professional Idealism
373 **
766 ***
Relativism 314 ** 544 *** -3.
Adj R2 F-statistics 841 *** 932 *** 221 *** *** significant at 1%, ** significant at 5%, * significant at 10% Table 3.
*** signif Gadjah Mada International Journal of Business - May - August.
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For the effect of ethical ideology on ethical judgment, the individual vignette whereby one vignette is legally ethical and the other is legally unethical, the results for the illegal case show a positive significant result but no significant result was found for the legally ethical situation.
This implies that ethical ideology is a determinant for ethical judgment when the issue is a legally unethical matter.
However, if the situation is ethically questionable but is legal based on the decision of the criminal court, the level of idealism and relativism will have no significant effect on an individualAos ethical judgment.
Thus, the finding supports hypotheses H3 but not hypothesis H4.
Implications.
Limitations and Conclusion The present study investigated the effect of age, gender and professional qualification on the ethical ideology of accounting practitioners in Malaysia.
In addition, the study also examined the effects of demographic determinants and ethical ideology represented by idealism and relativism on ethical judgment in two ethical situations that are different in terms of the legality of the The study revealed several findings of interest to many parties including academicians, accounting practitioners and accounting professional bodies.
First, this present study found that demographic determinants of age and gender significantly influenced the individualAos idealism level and also had a significant effect on ethical judgment.
Specifically, females and older accounting practitioners were more idealistic and less accepting to questionable ethical situations.
However, no significant effect of age and gender was found on the relativism level of accounting practitioners.
Second, the evidence of the present study showed that professional qualification had no significant influence on either the ethical ideology or ethical judgment of accounting practitioners in Malaysia.
Third, this study discovered that idealism and relativism had a significant influence on the ethical judgment of accounting practitioners, particularly in an illegal ethical situation.
Even though the findings of this study revealed that ethical attitude moves directly with age, which supports KohlbergAos theory, awareness and sensitivity to an ethical issue is best if it could be instilled during the very early stage of an individualAos career.
achieve this, the higher education system plays an important role.
As ethical content already exists in most of the accounting modules, enhancing the effectiveness of the content delivery may help internalizing the ethical attitude among future accounting practitioners.
Moreover, inculcating analytical thinking is also crucial in preparing the individuals to face real work life.
As for the professional accounting bodies, even though a professional accounting qualification is essential to being recognized in the profession, the present results illustrate that there is no difference between professionally qualified and non-professionally qualified practitioners in terms of their ethical judgment.
To some extent, although the generalizability of the results is somewhat limited, it informs the accounting professional bodies that despite the present efforts to strengthen the ethical standards among their members the outcomes have yet to be proven.
However, the findings indicate that accounting practitioners in Malaysia behave ethically regardless of whether or not they are professionally qualified.
This study is not without limitations.
First, in relation to the generalizability issue, the present sample does not represent the popu119 Ismail and Ghazali lation of accounting practitioners in Malaysia as only a small number of practitioners were covered in this study relative to a large population of accounting practitioners in Malaysia.
Second, the ethical vignettes used as proxies for ethical judgment do not specifically reflect the daily real work ethical situations faced by the practitioners, and, hence, may not actually reflect the ethical attitude of the respondents in dealing with their daily work.
Therefore, this is a potential area for improvement in future work in order to provide more insightful evidence.
The third limitation of this present study is that it only considers a few factors affecting the ethical ideology and ethical judgment of the respondents.
Future work may want to introduce other factors that may have influenced the ethical ideology and ethical attitudes of accounting practitioners such as socio-economic factors including level of income, education and work position.
In addition, differences in culture could also be a factor to be taken into account as Hofstede .
0 and 1.
claimed that Malaysia has a different culture than the western countries.
Therefore, future work may want to include samples from at least two countries with different cultures .
Malaysia and a western countr.
in assessing culture as a factor affecting ethical ideology and ethical judgment.
Furthermore, future studies may want to consider a longitudinal study to investigate the ethical attitudes of accounting practitioners over time to see if the attitude changes due to certain initiatives that are introduced by responsible parties.
Despite the limitations, this study contributes to the literature by offering some empirical evidence on factors affecting ethical ideology and ethical judgment of accounting practitioners.
The evidence reported in this paper does not only confirm evidence reported in other prior literature which are mostly from the western
countries, but more importantly, this present
study made specific reference to samples from a developing country, which is still currently References