Why Accounting Professionals Breach Accounting Ethics: A Grounded Theory Study Of Stakeholders

Abstract

This study explores the insights of key stakeholders of accounting education in Khyber Pakhtunkhwa, Pakistan that why accounting ethics (AE) are breached. Accounting has a critical role in all organizations however, non-teaching of AE leads to accountants’ unethical conduct and manipulative practices that result in financial scandals. This study endeavors to comprehend perceptions of key stakeholders regarding AE via systematically supporting its numerous sides. Literature emphasizes AE since accounting information has a decisive role in individual, corporate, (inter)national decisions. Stakeholders’ theory lens is applied that was initially developed to understand short and long run influences of any business organization on all interested parties nevertheless, it is extensively utilized in accounting research studies. Qualitative research approach is used to elicit 25 open-ended interviews from participants comprising of accounting professionals, academicians, students, employers, recruiting agencies and parents of either of these. Constructivist grounded theory is opted for analysis of data. Findings show that stakeholders of accounting education perceive AE very significant in individual and organizational decisions. Ethical problems of accountants are deeply-rooted in weak accounting education and regulatory mechanism. Recommendations of the study include independence of accountants, strong regulations, ethical training of accounting students, fair HR organizational policies, restrictions on professionals for parallel audit and accounting services to their clients and reforms in tax policies.