Ethical Issues in the Context of Earnings Management


Philip Heinz, Chris Patel and Andreas Hellmann
Department of Accounting and Corporate Governance Faculty of Business and Economics, Macquarie University, NSW, Australia

Series: Ethical Issues in the 21st Century
BISAC: BUS008000

Ethical issues in the context of earnings management have been increasingly recognized as an important and controversial topic in accounting research. Prior literature has largely focused on this topic in Anglo-American countries. This research monograph focuses specifically on Germany, a country in which ethical issues in accounting have not been rigorously examined. Based on an evaluation of prior research, the monograph provides some theoretical and methodological suggestions to guide research on the controversial topics of accountants’ professional judgments and earnings management. Further, the influence of two relevant personality variables on professional accountants’ ethical judgments on earnings management is examined.

The two personality variables selected, namely Construal of Self and Regulatory Focus Theory, provide sharper insights into accountants’ judgments at individual levels. This book also examines “holier-than-thou” perception bias among professional accountants and accounting students. “Holier-than-thou” perception bias refers to individuals perceiving themselves as being more ethical than their peers. This bias is an important issue in accounting contexts because it may foster an unethical organizational culture. Finally, the research monograph examines accountants’ judgments on whistle-blowing in the context of earnings management.

Whistle-blowing as an internal control mechanism is useful in revealing illegal, immoral, or illegitimate practices such as earnings management. This research monograph contributes to accounting research by examining these ethical issues from various perspectives and by providing holistic insights incorporating literature from multiple disciplines such as history, sociology, psychology, and philosophy. The findings of this research monograph have implications for accounting ethics research, accounting firms, and accounting education. The findings also have implications for convergence in accounting and may be of interest for global standard-setters such as the International Ethics Standards Board for Accountants (IESBA) and the International Accounting Education Standards Board (IAESB). (Imprint: Nova)

Table of Contents

Table of Contents


Chapter 1 – Ethical Issues and Earnings Management: Overview (pp. 1-22)

Chapter 2 – Some Theoretical and Methodological Suggestions for Studies Examining Judgments of Accountants and Earnings Management (pp. 23-52)

Chapter 3 – Influence of Personality Variables on German Professional Accountants‘ Judgments on Earnings Management (pp. 53-82)

Chapter 4 – Holier-than-thou‖ Perception Bias Among Professional Accountants and Accounting Students in Germany (pp. 83-106)

Chapter 5 – Accountants‘ Judgments on Whistle-Blowing in the Context of Earnings Management: Some Evidence from Germany (pp. 107-136)

Chapter 6 – Conclusion (pp. 137-144)


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