The power of Australian small accounting firms’ unethical exposure

Purpose– The purpose of this paper is to investigate small business owner/manager’s exposure to unethical behavior, and to examine the influence of unethical exposure on organizational intention to implement ethical policies and practices.Design/methodology/approach– Using a sample of 209 Australian small accounting firms with a path analysis, this paper adopts a modified ethical decision-making model to test the relationship between exposure and personal attitudes toward unethical behavior, and the relationship between exposure and intentions to implement ethical policies and practices at firm level.Findings– The results show that increased exposure to unethical behavior triggered stronger personal attitudes with small accounting firm owners/managers tending toward accepting unethical behavior. In contrast, at the firm level, more exposure to unethical behavior creates cautious overtones and motivates owners/managers to take action and implement more ethical policies, with the underlying aim of addressing serious ethical issues.Research limitations/implications– The study tests the ethical decision-making model but focuses only on three constructs (i.e. exposure, attitude and response). The aim is to examine whether extensive exposure to unethical behavior would change personal attitudes toward accepting such behavior, and whether unethical exposure would trigger firm owner/managers to take action and address the ethical dilemma by establishing some ethical guidelines. Other important variables (such as subjective norm, personal locus of control) embedded in the ethical decision-making model should be included in future research.Practical implications– The study draws attention to ethical dilemmas encountered by many small accounting professionals and their organizations. It addresses the importance of upholding the ethical standard and avoiding the extensive exposure to unethical behavior. It also emphasizes the needs for small businesses to establish some ethical policies and practices.Originality/value– The paper is purposely set out to reduce the gap in studying how small accounting firms make decisions in implementing their ethical policies and practices to address the rampant ethical dilemma faced by their employees as a result of many corporate scandals and financial crises of the past decade. The results are particularly valuable for small accounting firm owners/managers. The findings also have educational and policy implications

Ethical, economic and efficient sector : is it a gamble? The case of New Zealand Health

The New Zealand public sector has gone through major reform as a result of fiscal deficit in 1984 (KettI, 1997; Schwartz, 1997), resulting in shift of emphasis from quality service provision to establishing financial supremacy (Kettl, 1997). This raises concern as to how public sector employees are attaining balance between their service objectives with financial ones and how is the ethics negotiated in this process. Following this concern, this paper focuses on determining the organisational variables consisting of organisational policies in the District Health Boards (DHBs) and hospitals of New Zealand on ethical behaviours of managers and the ethical climate of these departments. The aim of this study is to increase our understanding of the ethical climate of the public health. Our findings suggest that little emphasis has been provided to the aspect of ethics in New Zealand health sector. There is no reward for employees who exhibit exemplary ethical behaviour, no hot line to consult/report about ethics, any detailed guidelines and policies, and not enough ethics-related training provided to staff.<br /

Social reporting in the annual reports of Iranian listed companies

This paper examines corporate social reporting (CSR) in the annual reports of companies listed on the Tehran Stock Exchange (TSE) in Iran. Descriptive analysis and multiple linear regression techniques are used to analyse the extent of CSR disclosure and to test hypotheses regarding the relationships between CSR disclosure and four company characteristics namely size, profitability, finanacial leverage and industry type. Among five important themes of social disclosure (human resources, environmental performance and policies, community activities, energy consumptionn, and customer satisfaction and product quality) the human resources theme was found to be the most common type of disclosure made. Only the size of the disclosing company was found to be significantly related to the level of overall CSR disclosure

Users\u27 information requirements and narrative reporting : the case of Iranian companies

This paper investigates whether the narrative section of Iranian companies\u27 annual reports satisfies the information requirements of financial analysts employed by institutional investors. Taking a group of stakeholders (i.e. financial analysts) as the sample, a questionnaire survey was conducted to identify their top three information needs from the narrative sections of company annual reports in each of three information categories: Present, Analytical and Prospective. Following this survey, a checklist was prepared to analyse whether Iranian companies are disclosing this information required by financial analysts. Overall, the results partially support stakeholder theory as there is a general lack of information flow on the part of Iranian listed companies in meeting their stakeholders\u27 information needs. <br /

An empirical analysis of the determinants of financial disclosure in Iran

Economic liberalization, globalization of enterprises, mergers, acquisitions and deregulation has caused changes in the business environment and financial reporting requirements. The purpose of the paper is to identify some of the characteristics of corporations that are associated with, and the probable implications of, the quality of corporate disclosure in Iranian companies. In Iran although the content and form of annual reports is affected by certain minimum requirements of the corporation law, the accounting standards committees and the stock exchange for listed companies, there is still a whole host of information that may, or may not, have some influence over the level of disclosure. This paper investigates informational efficiency and the determinants of the extent of the disclosure index of corporations. The results of annual reports survey on a set of Iranian corporations are used to assess the relationship between corporate characteristics and the extent of disclosure measured

A comparison empirical study of current disclosures and users' perceptions in Iran

This paper reports the results of two empirical research studies include the needs and requirements of the users of financial reports and the current corporate financial disclosure practices in Iran. It uses the results of two separate surveys and compares users' perceptions about the information items which are currently disclosed in Iranian corporate annual reports with the current corporate disclosures by Iranian companies listed on TSE. To discover to what extent the Iranian financial practices disclose users' expectations, spearman rank correlation coefficients were used to compare the mean rank of user group perception and the mean rank of actual disclosure for each section of annual reports and overall disclosure separately. This research investigates informational efficiency and determines the extent of financial disclosure by a set of Iranian corporations and compares this to the level desired by different users. The objective of this survey is to find the degree of consensus between actual disclosure and users' information needs

An empirical investigation of the quality of disclosure in corporate financial reports in developing countries: the case of Iran

A considerable amount of research has been done with regard to classification and explanation of the diversity of accounting practices across countries. There is a need for an approach to accounting in the Third World that is different from that of the industrialized nations. The attempts to improve the accounting systems and standards in developing countries are inadequate. The purpose of this thesis is to measure the level of disclosure of accounting information in a developing country (Iran) and to determine whether some important corporate characteristics have any impact on the quality of disclosure in Iran. Two approaches were used in this study for determining user groups\u27 perceived importance of the selected information items through a structured questionnaire and defining the level of disclosure on corporate annual reports of Iranian companies through an unweighted disclosure index. The scoring sheet index was applied to 62 corporate annual reports for years ending between 20 March 1995 and 21 December 1996. Then the association between the extent of disclosure and various corporate characteristics were examined using a multiple linear regression model. Those characteristics were company size, the degree of government ownership, profitability, liquidity ratio, type of business, share price fluctuation, time lag, and audit firm. The results show that there is consensus between institutional investors and bank investment officers about the perceived importance that they attached to sources of information. In regard to the degree of consensus among user groups, the results of an item-by-item examination show that combinations of bank loan officers, tax officers, and auditors with the other user groups have a weak level of consensus about 81 information items. The average (mean) level of overall disclosure between sample companies was 62 per cent, with a range between 36 per cent and 72.5 per cent. The results also indicated that there is a high association between the actual disclosure of information items and the rankings of two groups of users (auditors and tax officers). The association between actual disclosure and the rankings of bank investment officers, bank loan officers, corporate investors, and stockbrokers was very low. The analysis of the regression model showed that there is a significant association between the extent of disclosure and liquidity. The results suggest that audit and liquidity were both associated significantly with the extent of disclosure in corporate annual reports in Iran. The percentage of government ownership had less significant impact (

Expectation gap : do companies disclose what users need in Iran?

This paper reports the results of two empirical research studies including the needs and requirements of the users of financial reports and the current corporate financial disclosure practices in Iran. It uses the results of two separate surveys and compares users' perceptions about the information items which are currently disclosed in Iranian corporate annual reports with the current corporate disclosures by Iranian companies listed on TSE. To discover to what extent the Iranian financial practices disclose users' expectations, Spearman Rank correlation coefficients were used to compare the mean rank of user group perception and the mean rank of actual disclosure for each section of annual reports and overall disclosure separately. This research investigates informational efficiency and determines the extent of financial disclosure by a set of Iranian corporations and compares this to the level desired by different users. The objective of this survey is to find the degree of consensus between actual disclosure and users' information needs

An empirical analysis of the determinants of financial disclosure in Iran

Economic liberalization, globalization of enterprises, mergers, acquisitions and deregulation has caused changes in the business environment and financial reporting requirements. The purpose of the paper is to identify some of the characteristics of corporations that are associated with, and the probable implications of, the quality of corporate disclosure in Iranian companies. In Iran although the content and form of annual reports is affected by certain minimum requirements of the corporation law, the accounting standards committees and the stock exchange for listed companies, there is still a whole host of information that may, or may not, have some influence over the level of disclosure. This paper investigates informational efficiency and the determinants of the extent of the disclosure index of corporations. The results of annual reports survey on a set of Iranian corporations are used to assess the relationship between corporate characteristics and the extent of disclosure measured

Expectation gap : do companies disclose what users need in Iran?

This paper reports the results of two empirical research studies including the needs and requirements of the users of financial reports and the current corporate financial disclosure practices in Iran. It uses the results of two separate surveys and compares users' perceptions about the information items which are currently disclosed in Iranian corporate annual reports with the current corporate disclosures by Iranian companies listed on TSE. To discover to what extent the Iranian financial practices disclose users' expectations, Spearman Rank correlation coefficients were used to compare the mean rank of user group perception and the mean rank of actual disclosure for each section of annual reports and overall disclosure separately. This research investigates informational efficiency and determines the extent of financial disclosure by a set of Iranian corporations and compares this to the level desired by different users. The objective of this survey is to find the degree of consensus between actual disclosure and users' information needs