INTRODUCTION
ETHICS AND ACCOUNTING PROFESSION
Accountants are more likely to adopt an ethical perception as they have to earn the trust of investors, creditors and manager. Accountants must not only be competent and well qualified, they must also work in integrity. Nevertheless, accounting ethics are more important for accounting professionals and also for Certified Public Accountants (CPAs). Accounting professionals are well qualified experts in the field of accounting. All Certified Public Accountants (CPAs) must also act in an ethical manner as they deal with stakeholders and different clients. Moreover this will increase the stakeholders' confidence and will help establish a good reputation in the society as in accounting they deal with financial information such as tax and they are also appointed as trustees. Therefore, they are exposed to many risks. The investors and the clients must have confidence on these professional accountants and also the professionals must deliver services beyond the expectations of these stakeholders and clients.
Ethics are applied to any kind of profession especially those who handles money. However accounting profession is more exposed to risks as it deals with many financial statements and therefore it faces new challenges. For instance, years ago accounting profession was shocked by accounting frauds such as Enron scandals which is a symbol of corruption and there is also WorldCom scandals. These frauds had a negative effect on public confidence as they have affected the whole Western economy and have caused changes in the accounting profession. The reputation of accounting profession was damaged and investors lost their trust in securities markets. However due to these scandals the government of United States has enacted a federal act named Sarbanes-Oxley Act of 2002 so as to gain a good image in public and the trust of investors.
Sarbanes-Oxley Act of 2002 (SOX) was set in response to these accounting scandals to protect investors, shareholders and the public in the securities market from accounting frauds. All businesses should comply with the rules and regulations in the Act and non-compliance can be liable to fines and/or imprisonment. The Act enables the government to supervise the accounting profession and it helps protect the employees who disclose personal information. Sarbanes-Oxley Act was also established to enable transparency and disclosure of financial information. However, the act consists of different titles, for example Title 1 consists of Public Company Accounting Oversight Board (PCAOB) and Title 2 consists of standards for External Auditor Independence to ensure that there is no conflict of interest.
On the other hand, with the Sarbanes Oxley Act, there are also principles that accountants should follow such as the Generally Accepted Accounting Principles (GAAP) which accountants used when preparing financial statements as it ensures reliability and integrity. To confront these challenges and to be successful in accounting profession Code of Ethics has to be set so as to gain the trust and confidence of investors and public. The International Federation of Accountants (IFAC) has established Codes of Ethics for Professional Accountants and IFAC contributes in developing accountancy profession worldwide. Professional accountant deals with confidential information and therefore they must respect the conditions applied. They must not disclose the information to a third party, they act in integrity and they should behave in accordance of the code of ethics to be successful.
The ethical standards are set up in the American Institute of Certified Public Accountants (AICPA) in United States. As there will be always demand for accounting the AICPA's aim is to improve the work performance of accountants. Public confidence will be earned if professionals fulfill their responsibilities fully and with integrity. However, accounting profession still faces new challenges, for instance in 2002 there has been scandals which have been a challenge for the 'Big Four' company but there standards which should apply to confront all these challenges. For example, in Mauritius there is Mauritius Institute of Professional Accountants (MIPA) which was established in 2005. MIPA base its Code of Professional Conduct and Ethics on the IFAC's Codes of Ethics. It sets standards for professional accountants in Mauritius and improves the services in accounting profession. Moreover it manages and controls the accounting profession in Mauritius.
If all the ethical standards are well implemented in the business and if the professionals adhere to these standards, the accounting profession will be successful and it will also create a good reputation in the public. This research focuses more on accounting students but later these accounting students will be an accountant in a firm and thus a need to understand ethics applied in accounting profession to be able to face the new challenges that arise. Hence, in the next section the ethical perceptions of accounting students will be discussed.
ETHICAL REASONING OF ACCOUNTING STUDENTS
Based on the accounting scandals that have occurred, doubts have raised about the ethical issues in the accounting profession. However, ethics should be taught from the start itself, that is, in classes with accounting students to prevent such outrages in the workplace. Therefore, many researchers have conveyed surveys with accounting students to get a clear overview about their ethical reasoning and thus will help in finding ways to enhance ethics in classes.
Satoshi Sugahara and Gregory Boland are one among the researchers who conveyed a survey with business students but with particular attention on accounting professionals, to identify their ethical reasoning. The aim of the study was to investigate the impact of ethics learning, the structures of ethics education and its impact on the accounting students in Japan and China. The survey consist a sample of 187 and 193 undergraduate business student from Japan and China. This research has used Rest's Defined Issue test (DIT) to measure the ethical reasoning. DIT is used in many areas especially in accounting to measure the ethical thinking ability. Moreover, T-tests and univariate analysis of variance technique were applied to assess the impact of ethical learning experiences on these students. The outcomes of the study stated that Chinese students' ethical reasoning ability was higher as compared to Japanese students. Besides, ethics learning experiences were found to be more useful in both Japan and China secondary schools, while ethics learning experiences were more productive in China because of the course differences. However, based on this finding, it is believed that different students have their own perspectives about ethical ability and introducing ethics classes can be beneficial only to some kind of students. This finding has helped to better understand how to improve accounting ethics in classes so that all students, especially accounting students, can get knowledge about ethics especially accounting students.
Another survey was carried out by Kun Peng (2011) which has given a more clarification about the ethical reasoning of accounting students. Kun Peng has chosen final year undergraduate accounting students from two Chinese and New Zealand Universities to carry out the survey. Kun Peng has classified the targeted sample into three groups: Chinese accounting students in China (CIC), Chinese overseas accounting students studying in New Zealand (COS) and New Zealand accounting students (NZL). He has chosen these two countries as there is an increased close relationship between them. However this study laid emphasize on how nationality, gender and education influence one's ethical reasoning and how the students of the two countries perceive the importance of ethics. The results of Kun Peng's research states that there is a low level of ethical reasoning in Chinese due to the combination of Confucianism, Marxism and Capitalism in the particular society but at the same time it was found that there is a similar Perceived Importance of Ethics in Chinese compared with New Zealand students. Moreover, it was also found that there is no significant difference in the level of ethical reasoning and in the Perceived Importance of Ethics between COS and CIC, and between COS and NZL. Based on the findings, Kun Peng (2011) concluded that cultures can have an effect on individuals and also studying in a top University may not have a positive impact on the ethical reasoning level of an individual.
On the other hand, in Iran and United Kingdom a survey was conducted by Abbaszadeh et al. (2012) comparing accounting students' ethical perception between the two countries and it was found that in United Kingdom accounting students are more ethically conscious than in Iran. However as this study also emphasizes on accounting students, it is assumed that it will have the same implications as the survey conducted by Abbaszadeh et al. (2012).
DETERMINANTS OF ETHICAL PERCEPTIONS
Gender
Gender differences have been existed since the sexual revolution. There has always been a difference between the male and female, for example some will say that the verbal skills of girls are more accurate than boys and on the other hands some will say that boys are more competent than girls. However these small differences always exist. In many societies men are considered superior than women. In Indonesia the position of women in terms of education still fall behind men. Pulungsih (2007) research shows that women's literacy level is 5.3% less than 2.7% in men. This type of society believes that women's place is at home, looking at family whereas men are the bread winner of the family. Moreover, all the decisions are taken by men. However, nowadays things have changed a bit, that is, gender difference is not a major issue in today's time because women also perform some activities like men. In other words, in our society now many women work like men.
Blau et al. (2002) states that 50% of the workforce in today's developed countries are women. However, ethics issues have become an important actor in businesses, especially in accounting business and according to earlier research; it is found that women tend to behave more ethically than men. A survey was carried out by Yvonne R. Stedham, Jeanne H. Yamamura and Rafik I. Beekun in 2004 to find out gender differences in business ethics and they also assessed how men and women perceive the moral problems. The targeted sample chosen for this survey was the German business students and they found that females tend to take the moral dilemma as a form of relationships which is solved by communicated whereas males tend to solve the moral dilemma more formally and strictly that simplifies the moral problems and without involving in any relationships. Furthermore, Cohen et al. (1998) take into consideration the teleological versus deontological and relativism versus absolutism theories which helped in explaining clearly the difference in gender. It was found that women are more caring, while men prefer justice. In other words, women are more at ease with relative judgements as they are more relationship oriented whereas men prefer absolute judgements as they focus on what is wrong or right and fair or unfair. However, Jean-Paul and James Wayne's research contradicts these researches which state that women are more ethical than men instead their findings show that gender does not influence ethical attitude, that is, there is no difference between male and female ethical reasoning.
Ethics is important in accounting business because there are accounting frauds that may occur and however Shaub (1994) and Cohen et al. (1998) states that female accountants tend to be more ethical than male accountants. For instance, the incident at Enron, it was a female, Sherron Watkins who blew the whistle about the wrongdoings in the financial reports. Nevertheless, there are other well-known females' whistle-blowers such as Cynthia Cooper of WorldCom and Coleen Rowley of the FBI. However, to know better if female accountants are more ethical than male accountants, comparison was made between female and male accounting students as accounting students' ethical behaviour will be the same when they become accountants.
Chiulien Chung Venezia (2008) carried out a survey in U.S and Taiwan with the accounting students to compare the ethical thinking of both countries based on gender. The completed surveys were a sample of 114 U.S students and 118 Taiwanese, that is, 232 surveys were completed and sent to the Center for the Study of Ethical Development at University of Minnesota. This research uses demographic questionnaire and Rest's new version of the Defining Issues Test, DIT (DIT-2 or N2) to assess the moral judgement. However, this study concludes that female accounting students have more ethical reasoning than male accounting students as the means of the DIT and N2 scores indicates that females are 20% whereas males are 18.5%. Furthermore, the research also points out that there is no significant difference in the level of ethical reasoning for both male and female accounting students between the U.S and Taiwan.
On the other hand, there is Kohlberg's theory on which Rest has based the development of its moral judgement process (DIT). Both theories differ from each other in several ways. For instance, Kohlberg's model measures the moral reasoning by assessing an individual's use of the concepts of justice, focusing more on individual benefits, while Rest's model measures the moral reasoning by assessing an individual's tendency to use justice concepts, focusing on social cooperation (Elm and Weber, 1994, p.346). Kohlberg (1969, 1976, and 1984) proposed six stages which are grouped into three levels to have different points of view about why would men and women differ in ethical dilemmas. Richard D. White Jr. (J-PART, Vol. 9, No. 3, Jul., 1999, pp. 459-471) carried out a survey about the effect of gender upon moral development. The research has surveyed 299 male and female members of the U.S. Coast Guard to compare the moral development. This study uses Kohlberg's theory to measure the levels of moral judgement and also applies Rest's Defining Issues Test (DIT) as a measurement tool. Thus, after the research it has been proved that females Coast Guard gained 4.5 points more than males on the DIT. Kohlberg (1976); Lickona (1980) "people progress in moral reasoning through a hierarchy of stages, that is from lower to higher stages; that values and ethics are improved when the person and the environment are interacting; and that moral judgement considered according to what the person reasons and structure."
Furthermore, Smith, Davy and Rosenberg (2009) made some research on the difference between men and women in their willingness to behave in immoral ways, with women being more ethical and less political. This research reports that women emphasize more on social relationships and they are less likely to engage in unethical behaviours. Thus they are not likely to cheat, whereas men focus on competition and have the tendency to act unethically. If women have more moral reasoning than men, it will be easy for them to discern immoral actions.
Since this study is concerned with accounting students, so based on all these previous researches, it is believed that female accounting students tend to be more ethical compared to male accounting students. Apart from gender, there are also other demographic variables that have an impact on ethical perceptions, such as age and education as according to Kohlberg moral reasoning increases with age and experience and thus indicates that age and experience do have an effect on moral reasoning. However, age and education will be discussed in more details in the next section.
Age
With respect to Kohlberg's theory as stated above, Kim and Choi (2003) also suggests that age has a significant impact on ethical reasoning. Jean-Paul and James Wayne conducted a research in South Africa to prove that age and other demographic variables do have a little effect on ethical judgement. They targeted students and professionals also but the survey was conveyed with those dealing in information systems and the results state that age does influence ethical attitude. Moreover their findings also prove that the ethical reasoning between the students and professionals were different in the sense that the students are found to be more "ethically lenient."
Nevertheless, there are other researchers such as Barnett and Karson (1989), Arlow (1991), Borkowski and Ugras (1998), Peterson et al. (2001), Wimalasiri (2001) which state that younger people tend to be less ethical than older people who are more mature. Moreover, Chan et al. (2002) declared that in younger Chinese executives are even prone to unethical behaviour for their own benefits as compared to older executives. Yusuf Sidani (2008) conveyed a survey on Lebanese workers concerning age, gender and ethical sensitivity. The sample taken was divided into two age categories, the first category was those under 30 years old and the second one was above 30 years old. The results show that in 14 of 18, the second category, which are the older people, are more likely to act ethically.
Khalid, K (2012, Vol. 1, No. 1, pp. 8-30) put more light on differences in ethical reasoning based on age. The survey was conducted in Malaysia's small and medium sized enterprise with the business managers and executives. The findings indicate that managers and executives between the age of 36 and 40 tend to apply ethical awareness in business practices and those between 46 and 50 are more sensitive towards ethical awareness in business management. On the other hand, it was also found that those of age 31 and 35 years old tend to follow and imitate others' judgement than focusing on their own ethical judgement.
However, since this research focuses more on accounting students, it is believed that younger accounting students tend to act less ethically than older students or even accountants who are classified as more mature person but Gupta, Swanson and Cunningham's research shows the contrary. That is, their study on the effect of age, gender and GPA on the ethical behaviour of accounting students has proved that accounting students' ethical choices are not affected by their age, gender or GPA. Furthermore there are also studies which contradict the findings above by stating that age does not have an effect on ethical judgement. Cortese (1989), Stanga and Turpen (1991), Kohut and Corriher (1994), all these researchers found that age does not influence ethical attitudes significantly. Moreover, moral development is said to be more family-system dependent and not simply age dependent (White (2000)). As this study is centred on accounting students, it will be the same as the study conducted by Gupta, Swanson and Cunningham and therefore it is believed that accounting students' ethical attitude are not influenced by their age.
Education
"Moral thinking develops with education" (Kohlberg Journal of Business Ethics (2008). Along with age and gender, education also is said to have an impact on ethical reasoning (Khalid, K (2012)). However many researchers found that higher level of education means higher ethical awareness and this was proved empirically by Rest (1994). On the other hand, there are researchers like Shaub (1994), Terpstra (1993) and Woodbine (2004) who found that the link between moral reasoning and education is insignificant. That is, education does not have any effect on ethical reasoning. Nevertheless, this study will concentrate more on earlier researches done on accounting students or accountants.
According to Forte (2004) mature managers have more incentives to deal with moral issues as they are said to be more educated and experienced. Khalid, K (2012) surveyed 1500 Malaysian small and medium sized enterprises' managers and executives using questionnaires to prove that the maturity and experiences of business managers and executives do determine their ethical reasoning. In other words, his findings indicate that managers and executives with at least 14 years of experience in an organisation have higher level of moral thinking and they are more capable to avoid unethical actions. Similarly, based on our study, it is assumed that matured and experienced accountants will be more at ease to deal with moral issues.
However in terms of students also it is found that there is a significant difference in the moral opinions of less educated and more educated students towards ethics (Giacalone et al. (1988)). The more educated one may be those with professional backgrounds or business and non-business students (Suwardi et al.). His results suggest less educated students have low ethical perceptions and this can make unethical situations more acceptable by them. Moreover, Kraft and Singhapakdi (1991) put more light on the ethical opinions among students by comparing undergraduate and graduate students and he found that graduate students tend to view most of the situations as immoral even if undergraduate students find it moral. Conversely, Jones (1990) states that both undergraduate and graduate students disagree in unethical situations while others will state that graduate students are more willing to disagree in unethical circumstances.
Relating to accounting students, Suwardi et al. affirms that students with professional backgrounds influence the views of those students towards ethics but students with accounting background are found to be less ethical than those having pharmacy background. However, Suwardi states that ethical perceptions are affected by the maturity level of those students and maturity is mainly considered in ethical value. Accounting students will be more ethical conscious when they have part time job experience as stated by Dr. Conor O'Leary and these students are mostly final year accounting students.
However, to enhance accounting students' knowledge in ethics, a subject has to be included in colleges and universities or even at work. For instance, in Malaysia the accounting profession has promoted education among accountants concerning ethical culture (O'Leary, Conor and Mohamad, Shafi (2008)) and moreover it was beneficial. Yi-Hui Ho et al. (2006) has written an article about the importance of business ethics and he states that teaching ethics in schools help the students to avoid unethical behaviours and they will be more abode to rules and regulations. He also suggests that ethics should be an integral part in education. Especially for accounting students, there must a module about ethics as "accounting students are the future business leaders" (Mirskehary, Yaftian, and Wickremasinghe, 2009, Vol. 1, No. 2). Furthermore, in Malaysia researchers have found that ethics courses in accounting faculties have helped in shaping the ethical awareness among accounting students who are the future accountants. Thus, ethics courses are essential in all universities or even in colleges if necessary.
LOVE OF MONEY AND ITS IMPACT ON ETHICS
Money has become an important part of our daily life as with money many desirable things can be achieved. Smith (1937) has defined money as "an instrument of commerce and as a measure of an object's value."Zelizer (1994) says that money has other different meanings and McClelland (1976) states that "the meaning is in the eye of the beholder." In other words, every person has different point of view regarding the meaning of money, that is different people interpret it differently and it depends also on their cultures. Nowadays, people have become quite greedy as they want to earn fame and power in a particular society. Even at work we can see that salaries are linked to job satisfaction. The scandals that happened in accounting firms, such as Enron, show how money and power has taken place in one's life. However there is a common saying "money is the root of all evils" and this is found in many religions.
Money can be an achievement for some people, on the other hand it can be a drug also as some people become addicted to money and they can go to any extent. Tang (1992, 1993, and 1995) has introduced a Money Ethics Scale (MES) to measure the ethical behaviour that people have towards money. Tang (2002) also states that money ethics has an effect on unethical behaviour and he classifies money ethics as 'love of money.' However the 'love of money' is related to 'evil.' Tang and Chiu (2003) have conducted a study on love of money and they have classified it into four factors: success, rich, motivator and importance. The first one relates to when people take money as a form of earnings or income, that is, these earnings mean success and achievement for them. The second factor is that some people prefer to be rich than poor and they want to earn lots of money. The third one is motivator which reflects those people who are inspired by money, in other words only money motivates them and nothing else. The last one, importance, this refers to when people are highly motivated by money, they want to be rich as well and consider money as an important factor in their life.
People can go to any extent to be wealthy, especially those with high love of money. This love for money makes people tempted to engage in unethical actions. However, Tang (2004) has explained unethical behaviour by giving some examples, firstly,Abuse Resources which refers to when employees are using company's resources, for example internet, telephone, stamp, for their own benefit. Secondly, Theft, this can be anywhere, at school or in companies, which means steal others things as their own, it can be stealing of cash as well from the counter. Thirdly, Corruption, this happens when someone falsifies the account of a company, for example tax evasion, or when someone gives or accepts money to perform a wrong action. The final ethical behaviour defined by Tang is Deception or Fraud, this refers to purposely make false promises regarding a deal or even advertisements that lie to customer about the products' actual quality or price.
M. Golparvar and H.R. Oreizi (Vol. 3, No. 1, 2; 2008) have conveyed a survey on the love of money with belief to justice with the four factors (success, richness, motivator and importance) that have already been discussed above. A sample of 700 people were chosen in which 350 were males and 350 were females and the results indicate that in males, love of money have different relation than females. Earlier studies found that males and females have different perspectives towards the unethical behaviour. However, as females have been proved in most research that they are more ethical than males, thus they tend to avoid engaging in unethical actions. Studies have also shown men are more competitive compared to women who are more emotional and comprehensive (Chen and Tang, 2006). Thus, men tend to have more love for money and they are more prone to unethical behaviour. In addition, religion also has an impact on unethical behaviour as in many religions love for money is considered as a sin for example in Bible and many more religions also. However those who are religious tend to behave more ethically.
However, this study will investigate the relationship between love of money and cheating among accounting students. That is, it will find out if accounting students are more likely to cheat inside and outside the classroom and engage in unethical behaviour as compared to other students. David E. Morris, Sr. and Claire McCarty Kilianhave done a research about accounting students' cheating and their perceptions of dishonest behaviour. They wanted to put more light on whether there was a difference between the accounting majors and the business majors regarding cheating or act in a dishonest manner and also whether those accounting students, who cheat at school, also cheat at high school or at work. This study has surveyed 569 undergraduate business majors from 7 universities and the research evidences show that there was no significant difference in cheating actions between the accounting and business majors. Moreover, evidences also proved that there is a significant number of accounting majors who cheat at school also cheat at high school and this can continue even at work.
However, high love of money will lead to high undesirable behaviour and therefore this turns the attitude of achievement of a person into greediness. For instance, in Mauritius recently there was a fraud occurred in Bramer Bank where millions were lost. Moreover, in this case it was found that a former manager, Jaya GengathoraPillay, of the branch of State Bank of Rose-Belle and his partner in crime in Bramer Bank have helped the beneficiaries of the fraud to gain these millions. This shows that people can go to any extent for money so that they get their comfort and all what they desire. They even make money their god. However, this study will investigate more on the demographic variables and the love of money and its impact on the unethical behaviour of accounting students as well as on ethics. The focus will be more on accounting students and their behaviour.
