Original Research

Accounting ethics – an empirical investigation of managing short-term earnings

Leonie Jooste
South African Journal of Economic and Management Sciences | Vol 13, No 1 | a201 | DOI: https://doi.org/10.4102/sajems.v13i1.201 | © 2011 Leonie Jooste | This work is licensed under CC Attribution 4.0
Submitted: 26 April 2011 | Published: 04 May 2011

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Abstract

Short-term earnings are managed in most, if not all, companies. The management of short-term earnings is vulnerable to misinterpretation, manipulation or deliberate deception even if these misleading accounting practices are prohibited by accounting regulations. Hence, the problem with managing short-term earnings is that it becomes an ethical practice, regardless of who is or may be affected by the practice or the information that flows from it. As a result of the publicity received by Enron and WorldCom on financial failures and fraud, and the subsequent legislation, the Sarbanes-Oxley Act in 2002, students are expected to understand the morality issues of earnings-management practices. Therefore, the ethics of earnings-management practices affects the accounting educator. Accounting students and business managers were surveyed and the findings indicated that there is no significant difference between gender regarding the ethicality of twenty earning management practices. The results, however, show that there is a significant difference between the perceptions of business managers and students regarding the morality of earnings-management practices. However, no significant differences were found between genders.

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Crossref Citations

1. Investigating ethical perceptions of short‐term earnings management practices
Melodena Stephens Balakrishnan, Leonie Jooste
International Journal of Emerging Markets  vol: 8  issue: 3  first page: 282  year: 2013  
doi: 10.1108/17468801311330338