Asian Journal of Academic Research
2014 Vol.1 Issue 1
Ethics in Management Accounting
By
Mahdieh Kamran
Department of Management and Social Sciences, North Tehran Branch,
Islamic Azad University, Tehran, Iran.
Abstract
In knowledge-based economy accounting information in general and costs information in particular have become
increasingly important. Those who work in management accounting and finance professionals constantly face with
ethical dilemma. Failure to comply with the requirements of professional ethics can affect the quality of accounting
information, and because compared with financial accounting, management accounting enjoys a higher degree of
freedom in structuring the providing information, management accountants must define standards of professional
ethics due to the information provided. Meanwhile, professional associations have developed ethical guidelines to
support management accounts in resolving ethical dilemma faced with. Universities, among other factors play
important role in the development of codes of professional conduct by management accounting.
Keywords: ethics, management accounting, cost, information .
1. Introduction
Management accounting is an internal business process responsible for organizing financial information
in order to allocate the costs of goods and services, to provide operational budget and to anticipate
production and sale. Under current economic conditions, the economy of any country is a part of the
global economy and information related to the cost of production is a growing concern, however. Hence,
institutions should introduce quality products to market regarding reasonable costs to hereby guarantee
their future economic development. Today, there are two global accounting systems:
 Convergence or Integrated system
 Dualism or non-integrated system
Integrated accounting system requires the presence of a responsible spirit able to simultaneously meet the
needs of external information in addition to local information needs.
Non-integrated accounting system known as the Romanian system, proposes two distinct types of
accounting. In other words, financial accounting and management accounting are independent of each
other in terms of operation while interdependent in terms of information. Reports resulting in
management accounting unlike annual reports, which are prepared in financial accounting process in
accordance with standards, do not follow any standard features. Therefore, budgets, combination charts,
reports, and cash flows have been affected by users’ information needs and the nature of the organization
activities in terms of structure and content in addition to other situations. Financial accounting in this
system is expressed as voluntary, while management accounting is considered as creative. Hence,
management accountants play a critical role in the preparation of this information. So if management
accountants do not act ethically, it can be harmful to the society and lead to a loss of public confidence
and market performance credit.
In our country, the part of professional ethics being considered and reflected in papers that mainly
oversees the work of auditors and audit firms. But, indeed acting in accordance with professional ethics is
equally important as for management accountants and in more general words those accountants to
provide professional services in the business process as well as auditors (Fakharian, 2004). This paper
reviews the information obtained from the management accounting, necessity of morals and ethics and
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Mahdieh Kamran
the active role of management accountants to promote ethics in the organizations. Also, expressed ethical
theories and models of decision-making, is trying to highlight the role of ethical standards and
professional and educational institutions in explaining ethics. This paper summarizes the extant literature
to provide practitioners in the management accounting profession, students, and faculty members and
standards approvals with an overall picture. Whereas, presenting the morality relevant areas, also could
be useful for researchers.
Ethics in Management Accounting
The recent financial scandals such as Enron, on the one hand, has led to considering the role of
management accountants in facilitating these frauds and on the other hand has caused Highlighted their
vital role on undertaking reforms to calm the financial markets regarding the reliability of financial
statements (Shaub et al., 2005), in another word, management accountants at the forefront of financial
operations of an organization play the role of decision making for managers. Management accountants in
an organization have been trusted to draw the image of shopping trends, inventory levels and expected
costs of supplies as well as labor wages. These figures can be distorted if they do not act ethically. Since
purchasing units refer to the distorted accounting reports, therefore it leads to a lack of resources needed
to produce or complete orders or incorrect decisions about the development of new markets or adding
production lines. Thus, the gravity of ethics in management accounting reduces the potential success or
failure of business (Vitez, 2009), numerous studies exist on how information systems can be manipulated
by management accountant employees (Hopwood, 1972; Merchant, 1990). Management accountants are
responsible for proper execution and implementation of internal control and adequate remuneration
systems. Recognizing the relationship between management control systems and ethical behavior, they
will be able to implement such a control system that does encourage employees to achieve organizational
goals not to apply non-descendants in the interests of their own (awasthi and Staeelin, 1995). Thus,
management accountants play active role in promoting ethical environments in the organization. Hence,
ethical standards and understanding the factors influencing management accountants’ conduct will be
critical for violating professional standards. Results of a study in 2003 states that employed individuals
have been relying on a combination of legal and practical oriented moral philosophy with justice and
direct spirit of law being ignored (Premeaux, 2006).
Theories of Ethics
There are two levels of ethics: theoretical ethics and applied ethics Business ethics is a main branch of
applied ethics focuses on how to apply ethical standards on organizations and conducts (Velasques,
1998). Ethical conduct is not complying with the law since individuals and organizations are able to act
legally while their action is unethical. Ethical conduct is rooted from a set of values and standards based
on ethics theories and serves as a benchmark in the absence of law to cover every decision (IMA, 2008).
Every normative ethics theory recommends a set of ethical role to provide individuals with amoral
standard measures in decision makings (Ferrel & Gresham, 1985; Webber, 1990; Alder et al., 2008).
Normative ethical theories, each are focused on different features and characteristics of ethical principles.
Theoretically, concepts and structural features are common to all of them included in a three-component
structure of moral standards, general ethical principles and specific moral judgments (Harris, 1997). A
moral standard provides a measure of general ethical principles that focus on the overall level of action
that these general morals and ethics in turn will produce particular judgments and specific ethical
principles. These theories, alone or in combination, can provide a theoretical basis for setting standards of
professional ethics and ethical decision-making models that guide ethical action in the field of
organizational ethics and education at universities.
Moral relativism - the theories are relatively unknown classification with obvious differences in theories
offering radical approaches. Common feature among them is that they all focus on the situation (personal,
national, social, religious or cultural) means that there are no universal standards of right and wrong. Thus
there are no absolute universal moral principles.
34
Ethics in Management Accounting
Cultural relativism – lack of universal standards is because of the fact that there are different standards
of right and wrong that arise from the dominant view of a certain culture.
Individual relativism - lack of universal standards is because of the fact that individuals have different
standards of right and wrong due to their personal opinions.
Goodness theories - these theories define action correctness in terms of moral goodness. Goodness can
be defined in different ways, such as fun, useful and appropriate. The good is considered to be the most
important and that is what most distinguishes these three theories.
Objective - profit-oriented theories and self-interested
The main focus of objective oriented approaches is on outcomes of an action. This view evaluates a
conduct based on the outcome. Nothing is inherently good or bad and the good and bad of every action
are subject to the results of doing it.
The most common objective oriented theories are self-interested and profit oriented ones, both focus on
consequences of an action; except that in self-interested the designated person outcomes determines if an
act is moral or immoral(Gulcan). In other words, the goal is to maximize the goodness for moral agent
(Reidenbach & Robin, 1990). While in the profit-oriented theory, outcomes to others are an act of moral
criteria. Two dominant self interest theories are psychological egoism and ethical egoism. Psychological
egoism is a descriptive theory of human conduct that believes people are naturally programmed to
behave in their own interests. Ethical egoism is the normative ethical theory indicating that people should
“exclusively” act upon their personal interest (Reidenbach & Robin, 1990; Jones et al., 2007).
The most popular outcome orientation is profit-orientation which follows maximizing welfare benefits,
sometimes called the profit. Bentham (1789) established the theory based on his understanding of human
nature. Human always tries to avoid pain and to seek pleasure. These conducts are referring to the fact
that is the joy and pleasure is good.
According to the ethical code of conduct, profit-orientation is a moral act if produces the greatest net
benefits for society as a whole (social benefits minus social costs) (Bentham, 1789; Mill, 1957; Brandt,
1979; Rachels, 1999; Velasquez, 1998; Schumann, 2001; Cavanagh, 1981), in one sentence, "the greatest
good for the greatest number. “This requires decision makers to estimate the effect of each option on all
parties involved and chose the option with the maximum satisfaction (Cavanagh, 1981; Velasquez, 1998).
Critics in response to profit-orientated individuals state that all values are not measurable, and they
believe monetary measures cannot measure everything. There are two different types of profitorientation:
Practical profit-orientation: When a person takes a decision, it is best to provide the most goodness
regardless of law and socially acceptable behavior. Here, the individuality of the people is ignored, and to
maximize the welfare individual’s interests will be victimized for the interest of goals non-legitimately.
Some believe that this type of utilitarianism cannot be reasonably justified because attaches little
importance to justice and rights. In contrast, the legitimate profit-orientation is known capable of
addressing these issues.
Legitimate profit-orientation: law has an important role in ethics and it cannot be ignored due to the
conditions since supports us against unfair treatments of a person (Lowton, 2000). Criterion of morality
or immorality of an act is compliance with a law that will lead to the greatest good.
Ethics of Care
This theory comes from feminist literature and states that a person's moral commitment is not to follow
the general principles, but regarding a certain person goodness that a person has specific real relations
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Mahdieh Kamran
with. We have to care for to the needs of people who are in our communications network other than own
needs including those we are in close relationship in addition to those in the larger community in which
we live(Schumann, 2001). From this perspective, an ethical dilemma is not an abstract problem with a
moral solution based on generally agreed upon moral right and applying universally accepted principles,
but solutions must emerge from taking care of bilateral relations and areas where they exist (Jones et al.,
2007). This theory used in business, such as hiring a beloved one and or desire to others may be
challenging (Velasquez, 1998).
Ethical decision making in organizations
Ethical decision making is a Multistage process that begins with people knowing a given situation has the
moral content and follows by the moral evaluation of the act, shaping behavioral intentions and being
utilize in actual behavior (Dubinsky & Loken, 1989; Rest, 1986). Each step is affected by various
personal, environmental and situational variables (for review, see Bartlett, 2003; Loe, Ferrell, &
Mansfield, 2000). Focusing on understanding the decision-making process and the impact of these factors
provides an opportunity for individuals with regard to the potential impacts to make better ethical
decisions and be more effective in teaching ethics.
Multistage contingency model
The model proposed by Ferrell and Gresham (1985) includes variables affecting ethical decision making
in an organizational setting. According to them immoral decisions are adjusted with two groups of
interpersonal factors (probability = variable = factors), and organizational factors (significant others and
opportunities for action are included). In this model, the factors are referred to behavior determinants not
the behavior itself. They clearly considered the nature and characteristics of the moral issue, not as an
agent but merely as a structure in the decision making process. Although, the indirect effect of moral
philosophy discusses virtue oriented on individual agents by views and their intentions, they are not
considered as individual factors in the model(figure 1).
Personal factors
Cultural and
social
environment
-
Knowledge
Values
Opinions
-
objectives
Behavior evaluation
Moral problem or
dilemma
Personal decision making
Other important issues
- Affiliation
with variable
coefficients
- The roles
order
Behavior
Opportunity
Professional
requirement
Firm policy
Reward/punish
ment
Figure 1: model proposed by Ferrell and Gresham(1985)
36
-
-
Moral
-
Immoral
Ethics in Management Accounting
2. General theory
Hunt and Vitell (1986, 1990) studied the effect of virtue-oriented and consequentialism on ethical
judgment and intentions and believed on the application of a combination of normative theories in
determining the judgments and, ultimately, behavior. Unlike probabilistic model of moral judgment and
ethical intentions they are better anticipators of behavior when central or lateral (Hunt & Vitell, 1986). In
this model, the decision-making process include: 1) awareness of ethical content, 2) knowledge of the
different possible options, 3) evaluating the objective function and consequentialism 4) formulate a moral
judgment (as the heart of this model that is a function of task-oriented and consequentialism evaluating)
5) formulate an intention or decision 6) behavior (which are moderated by situational factors) 7) evaluate
actual outcomes 8) feedback to personal experiences. It is assumed that moral judgment to influence on
behavior through the intervening of intention variable. They described intention construct as the
possibility of a chosen specific option, while any intention implies a desire and they overlooked a series
of intervening variables such as freedom and moral virtue that could be a chance to make an intention a
possibility (Torres, 1998).
Interactive model of the situation – individual
Trevino included the personal variables and situational variables in the study of decision making in
organizations. He believes that these variables explain decision making. The decision making begins with
an ethical dilemma. Then, person reacts with cognition that indicates his thinking about right and wrong.
Personal variables
Ego power
Field dependence
Control place
Moral
dilemma
Moral/ immoral
behavior
Cognitions
Moral cognition
development stages
Situational adaptors
Necessary occupational field
Force
Other oppressors
Organizational culture
Normative structure
Other references
Power obedience
Consequences responsibility
Work properties
Task acceptance
Resolve Moral conflict
Figure 2: Interactive model of the situation – individual
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Mahdieh Kamran
Before cognition influence the immoral behavior the interaction case is faced with personal variables
such as ego strength, field dependence, and locus of control, and situational variables such as essential
career, corporate culture and job characteristics. Meanwhile, the situational variables are also recognizing
feedback to cognition and its impact on cognition specifies cognitive moral development (derived from
Kohlberg model). In this model, moral judgment is not a variable or a specified concept that of Hunt and
Vitell model, but is as a part of the recognition process and psychology structures are intended to explain
and predict behavior instead of theories of normative models by Hunt and Vitell.
Cognitive moral and moral reasoning development
Kohlberg emphasizes on reasons to justify one's moral understanding of the reasons behind a choice
(Torres, 1998). These reasons are classified into six stages of moral development in three moral reasoning
stages: the pre- conventional, conventional and level beyond the conventional. He believes judges at a
higher level are the best (Kohlberg, 1981). On the first level (stages one and two) the individual tries to
follow the rules for the fear of punishment or personal damage (Trevino, 1992). In the second level of
stage three, an action is justified based on internal rules and expectations of society and some of its parts,
such as family and peer groups. In the fourth stage, that action is considered eight that meets duties and
obligations and supports law except when in conflict with social duties (Weber & Wasieleski, 2001;
Trevino, 1992). In this stage, moral reasoning will place people in the context of a social system. In the
third level, or the level of principles, reasoning supports the pervasive ethics beyond the rules and values
of society. In stage five, people still insist on rules and principles but consider changing them for social
purposes. In final stage, an individual is guided by ethics of justice and the rights chosen by him (Trevino,
1992). Although Trevino interactive model is borrowed from Kohlberg model, the fact that cognitive
moral development contains several normative theories is considered less important (Torres, 1998). Some
implicate the first level as self-interest theories (Victor and Cullen, 1988) and relate the final level to
rights and justice theories (Rest, 1979; Reidenbach and Robin, 1990). However, theories such as care
ethics (Fraedrich et al., 1994) and virtue (Torres, 1998) are overlooked. His point of view is merely
psychological - cognitive to feedback agent (learning) to philosophical view (Torres, 1998).
Behavioral model of ethical decision making
Bommer et al. (1987) believe in a rational decision making process with every step of the process, such
as: goals, alternative, evaluation, selection, implementation and monitoring include education and
information gathering by the decision maker and the ethical issues. Among the data acquired and
processed there is environmental information associated with the issue. Then, the individual combines
and analyzes data and refines it through a process of selective perception. Later, he provides a conceptual
model affected by an iterative process by the nature of personal aspects, and adjusted by a single
cognitive process to ultimately achieve a rational solution to the problem (Bommer et al., 1987). in spite
of the fact that a detailed description of the environmental variables helps to understand ethical decision
making, the model defines ethical behavior and moral theory in the rotational form that falls into the trap
of immense backward to the beginning, assuming that moral business behavior is what the experts tell us,
sees learning as a cognitive concept, and transforms ethics to the mere psychological action (Torres,
1998).
The model - possible ethical decision-making
Jones focuses on ethical issues and introduces a series of variables that collectively referred to as "moral
intensity" and believes that these variables affect on every components of the decision-making and ethical
behavior. His model borrows its center from Rest (1986) four-stage individual ethical decision making
model. In the model of ethical decision making by Rest, four dimensions including intensity, judgment,
motivation, and moral character are being introduced. Thus, it is necessary for each individual to be
aware of a moral issue before taking any action and judge right or wrong. This judgment is largely
dependent on the moral development of individuals. Then with giving priority to the interests of others
over his own interests, alternative ethical problem solving is designed to determine the outcome for all
parties involved. Features such as insisting on a moral task, having courage, overcoming fatigue and
38
Ethics in Management Accounting
temptations and enforcement of mechanisms that serve a moral purpose will ultimately lead to a moral
behavior.
Moral intensity is a construction that focuses on a moral issue, not a moral agent and encompasses a
moral imperative in a position:
Consequences size - all losses or gains made on those who benefit or suffer from moral action.
Social consensus - the degree of social consensus about the good or bad proposed action
Likely to be affected - the possibility that the practice in question really happens and it will lead to losses
or gains anticipated.
Time urgency - attendance time and when the practice in question consequences begins (less time
indicates the greater urgency).
Proximity - a sense of affinity (social, cultural, psychological, or physical) that the moral agent with
losers by an evil act or beneficiaries by a good practice is a question.
Agglomeration effect - an inverse function of the number of people affected by an act with its big.
Moral intensity
Moral
problem
identificatio
n
Moral
judgment
Moral
objective
creation
Moral behavior
obligation
Organizational
factors
Figure 3: possible ethical decision-making
Thus, according to Jones model, 1) the higher moral intensity issues are identified as ethical issues with
more repetitions 2) issues of higher moral intensity are inferring more complex moral reasoning (a higher
level of cognitive moral development) 3) where including higher moral intensity issues, ethical intentions
are created with more repetitions 4) and ethical behavior is observed with more reps. This model has been
criticized, for example, intention is defined as a probability.
Ethical framework and action elements
In most situations, management accountant is responsible for decision making, hence understanding the
factors influencing moral decisions and this process is the first step to make better business decisions. The
next step is to have a systematic approach that guides decision makings by encouraging individuals and
groups to define problems precisely, collect data, applying standards and ethical values, identify and
39
Mahdieh Kamran
evaluate alternative actions and pursue choices. Also, people are better able to defend their decisions.
There are many models of ethical decision-making. For example, Powers and Vogel identify six elements
(moral image, moral identification, moral evaluation, disagreement tolerance and moral ambiguity, the
ability to combine managerial skills and ethical skills, a sense of moral obligation), Rest offers a model
of sensitivity in four dimensions (cognitive) ethical, moral judgment, concentration (moral motivation)
and moral character. Keyder propose nine steps (identify a problem, determine the agent, gathering facts,
test correct problem versus incorrect ones, test correct values versus incorrect ones, apply perspectives
and ethical standards, search a third way, decision-making, review and reflect on the decision), and sees a
moral decision as a learning process, he believes that dilemmas can include right-right and right-wrong
choices to encourage the search for creative solutions.
Professional and ethics codes guides on judgment and ethical decision-making
As noted above, researchers have tried to explain the reasons for unethical behavior by employees. Some
studies considered individual factors responsible for unethical behavior (Kohlbrg, 1969; Tervino and
Youngblood, 1990). While the others have examined the effects of some environmental factors, such as
moral rules (Loe et al., 2000; Adams et al., 2001) and the professional rules (Pater & Van Gils, 2003).
Professional Rules
While codes of ethics in an organization are developed, many professional associations also provide rules
to guide the behavior of their members. However, both constitute moral advice to guide behavior.
management accountants must abide by certain standards of professional ethics due to the gravity of
information on pricing decision, performance evaluation and planning in addition to having general
business skills (such as understanding organizational strategy) group skills (such as encouraging other
team members) and technical skills (such as computer knowledge, calculate the cost of products and
support the planning and control decisions) (Taicu, 2007; Amat, et al., 1991). International organization
of professional management accountants has developed standards of professional ethics. Setting the
standards are the most important because:
 Creates trust in relationship between the employee - employer
 Provides a resource for management accountants encountered with an ethical dilemma
 Provides a guarantee for the information users who are concerned about the quality of
information
Some believe that values provided by professional associations do not provide sufficient guarantees for
its members' behavior. A positive effect on professional behavior expected when professional values are
rooted in the reward system and organizational culture (Allen & Davis, 1993). Institute of Management
Accountants (IMA), the main professional body of management accountants, has developed standards of
professional conduct for four basic principles: competence, confidentiality, integrity and credibility of
Management Accountants.
Competency
Management accountants should guarantee high level of professional competence through continuous
improvement in their skills and knowledge. They will be unaware of procedures, guidelines and local
laws, as well as federal law if they do not meet competence requirements. This could threaten the stability
of the organization
Confidentiality
Management accountants have a responsibility to avoid disclosure of information obtained during their
work, unless they are legally obliged to do so. Also, they should inform their employees about the
confidential nature of the information obtained under and monitor their activities to ensure privacy.
Additionally, the use of confidential information for unethical or illegal rating for whom, and what a third
party have been barred.
40
Ethics in Management Accounting
Integrity
Management accountants must be incorruptible and must avoid apparent conflicts of interest and to
engage in activities that cause moral judgment. Also, any must reject any gift, hospitality, assistance and
munitions that may affect their present and future operations. In a more general expression they must
avoid engaging in any activity or supporting that would harm their professional credibility.
Credibility
Credibility expected of management accountants is to provide accurate, thorough and impartial
information about the favorable and unfavorable as well as professional judgment, even if the information
is not relates to the benefit of those requested the information.
Ethics Education for Management Accountants
Expression of numerous incidents of unethical behavior determines the role of accounting education and
institutions to promote ethics. Teachers can provide their students with case studies, real examples and
seminars and professional behavior instead of this behavior experienced by them. Research in this field
has shown that education is essential ethical decisions, but not enough (Hajjawi, 2008; Armstrong, 2003;
Zengin et al., 2009). Several researches are discussed questions about how to choose the training methods
and ethics. It has been stated that professional ethics courses are slowly being deleted from training
programs. It is best to teach ethical topics in both separate courses and as subjects as parts of each course,
regardless of discussing how to teach them (Alder, 2002). According to some, the latter procedure when
followed, inevitably ethics will be damned in accounting courses. If ethics is a concern for professional
accountants; however, the focus should on a separate course (Williams, 2010). Some have expressed that
moral education that includes both the sensitivity and moral judgment does not necessarily lead to moral
behavior (Hajjawi 2008; Armstrong 2003; Zengin et al., 2009). Some researchers have studied learning
disabilities by comparing the ethical attitudes of Canadian students and practitioners (Cohen et al., 2001).
Hence it is necessary to consider factors influencing on moral motivation in management accountants in
during learning process.
Personal interests: according to Expectancy Theory individuals count on different possible outcomes
from their behavior in their minds and the possibility of the outcomes. People generally select their
behavior to maximize positive outcomes and minimizes negative outcome. Accounting studies have
shown that more than money, individuals put values on other external benefits such as the position, job
security and probably promotion (Shaub et al., 2005).
Concern for others :Although self-interest is an important force in the options, there is evidence that
people do not merely act in their own best interest. Consider the interests of others are ethics ventricular.
Most theories of ethical decision-making are included beyond calculated benefits or consequences and
include the internal assessment based on task or religious education. However, this factor in the high level
of compliance tends to reduce non ethical decisions (Shaub et al., 2005).
Direct and indirect pay-offs: as a central factor strengthens the motivation to participate in questionable
activities including two groups of non-ethical practices: the ones with direct payoffs to individuals (tax
evasion, personal transactions and secret trade) and the organizational (incorrect resource acquisition and
conversion costs for doubtful accounts) and those pay to the employee indirectly by increased
profitability through strategic business unit or organization that lead to promotion and better payoff
(Shaub et al., 2005).
Management expectations inconsistent with the principles of professional conduct: management
accountants unlike independent accountants are the organization staff and being paid so the organization
expects them to be loyal. Managers who have the desire to be admired by the board may put pressure on
accountants to provide a better balance. Too often accountants are encouraged to submit to such pressure.
41
Mahdieh Kamran
Accountant’s accountants are required to provide balance sheets with the utmost precision in showing the
image of the organization position even if they are not in favor of the management team.
Through training in the four areas outlined in the Rest model, accounting professors can increase moral
sensitivity, moral reasoning and moral motivation for the students to encourage ethical behavior and help
them in judgment, identify the problem, the moral objectives and ethical behavior (Karami and Moradi,
2008). According to the International Accounting Education Standards Board (IAESB), No. 4, it is
recommended that professional accounting education provides a framework of values, ethics and attitudes
for the potential professional accountants to act as moral professional judgment for the interest of
community. It is necessary to start teaching these values since the initial studying for a professional
accountant and stressed again during served. In fact, the development of ethical behavior is a continuous
learning for professional accountant, including management accountants.
3. Conclusions
Currently, due to corporate scandals that occurred in some cases, morality has become a major concern
called into question the reputation of management accounting services in addition to, accounting services,
audit and strategic guidance. This paper attempts to study factors that contribute to ethics as a life
procedure by over viewing the concepts of ethics and its application, especially in management
accounting, decision making and judgment when faced with an ethical dilemma. Ethical standards
developed by the IMA stipulate that practitioners of management accounting and financial management
have a commitment to maintain a high level of ethical behavior to the public, their profession, and the
organization that they serve. Management accountants need to understand that morality is the foundation
of sustainable business. The organizational responsibility is not limited to economic aspects, but covers
environmental, social and ethical aspects, as well. Factors that may influence the behavior of accounting
professionals are shown in Table 1.
Table 1 Factors that may influence the behavior of professionals in accounting
Type
Affecting Factors
Role
Universities
Educational support
Professional organizations
Moral and religious reasons
law
professionals teach management accounting in
terms of scientific knowledge and ethical
practices
Accountants are supported but may penalize
those who do not comply with the standards or
even to forbid the occupation.
Conduct individual actions
Requirements that must be followed and the
violations penalties are included.
Compulsory
Organizational inner
approaches
lead behavior of employees in compliance with
legal requirements in the interests of corporation
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Ethics in Management Accounting
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