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An International Meeting of American Accounting
Association
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Ethical Decision Making by Management Accountants – An Empirical Examination |
George Schmelzle
Missouri State University
Thomas E. Buttross
The Pennsylvania State University at Harrisburg
Hema Rao
SUNY - Oswego
Abstract: This experiment involves a vignette that deals with preparation of a fictitious firm’s tax return. Subjects in the study (168 management accountants) are asked to deduct Travel and Entertainment (T&E) expenses of top management under several scenarios. The amounts considered vary in materiality and severity of the tax law violation. The third situational variable is pressure from superiors, which is applied by directing the accountant to deduct the expenditures. Personality (individual) factors—Machiavellianism and Ethics Position—are also considered in the experiment as covariates.
Scores on Machiavellianism and Ethics Position did not show a statistically significant association to ethical decision making. The materiality of the tax deductions did not significantly affect the actions of the study participants. However the severity of the tax law violation and pressure from superiors affected subject’s actions.