Survey Some of the Factors Influencing Ethical Judgments of the Earnings Management

Abstract

Earnings management is using judgment in reporting financial results and in structuring transactions to either mislead some stakeholders about the underlying economic performance of the company or to influence contractual outcomes that depend on reported accounting numbers (Kaplan, 2001).

This study investigates the ethical perception of students concerning different earnings management scenarios. A questionnaire is used to measure the ethical perception of  the respondents concerning 15 earnings management scenarios. The questionnaire is based on the questionnaire of Merchant (1994) and Fischer and Rosenzweig (1995).

Sample including Fields of accounting and non- accounting (management and economics) all the senior students admission to universities public of Iran. The results of the 250 questionnaires indicate that: (1) There is a significant difference between knowledge ethical operating earnings management and accounting earnings management. (2) There is a significant difference between knowledge ethical earnings management that decrease earnings and earnings management that increase earnings.

 (3) There is a significant difference between knowledge ethical earnings management that affect earnings on a quarterly basis than earnings management that affect earnings on a yearly basis.