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Recognition and Importance of Ethical Factors in Accountants' Decision Making Open Access


Other title
Moral Intensity
Earnings Management
Organizational Objectives
Ethical Sensitivity
Type of item
Degree grantor
University of Alberta
Author or creator
Fiolleau, Krista J.
Supervisor and department
Gaa, James (Business-Accounting)
Examining committee member and department
Maier, Michael (Business-Accounting)
Johnson, Ric (Vice Dean, Augustana Campus)
Welchman, Jennifer (Philosophy)
Kaplan, Steven (Accounting, Arizona State University)
Faculty of Business
Date accepted
Graduation date
Doctor of Philosophy
Degree level
Professional accountants in business are expected to not only fulfill legitimate organizational objectives, but also to recognize and deal with the ethical impact of their decisions on a diverse set of stakeholders. Prior research has investigated accountants’ ethical reasoning, but little is known about their ethical sensitivity (i.e. their ability to detect the ethical component of their decisions), which is necessary for ethical reasoning to begin. This study builds on the observation that in situations of ambiguous decisions and competing objectives, decision makers do not process all relevant information; thus, they perceive or attend to only a selected subset that is guided by their view of organizational success. It explores the possibility that when professional accountants’ view of organizational success does not include an explicit ethical component, they may fail to perceive the ethical implications of their decision. A common decision for many of them is whether (and, if so, how) to manage earnings. I conduct an experiment where accounting students and professional accountants in business face different organizational objectives (non-financial objectives present vs. non-financial objectives absent) and recommend whether and how the company should manage earnings to meet benchmarks. I provide evidence that practicing accountants have a lower level of ethical sensitivity than students and their level of ethical sensitive is higher at higher levels of years of accounting experience. Ethical sensitivity levels of practicing accountants and students are higher when organizational objectives include non-financial objectives. Through increased ethical sensitivity, the decision maker identifies a greater number of ethical issues in their decision, allowing for these elements of the decision to have a greater impact on the intended action.
Permission is hereby granted to the University of Alberta Libraries to reproduce single copies of this thesis and to lend or sell such copies for private, scholarly or scientific research purposes only. Where the thesis is converted to, or otherwise made available in digital form, the University of Alberta will advise potential users of the thesis of these terms. The author reserves all other publication and other rights in association with the copyright in the thesis and, except as herein before provided, neither the thesis nor any substantial portion thereof may be printed or otherwise reproduced in any material form whatsoever without the author's prior written permission.
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