The Impact of Self-Deception and Professional Skepticism on Perceptions of Ethicality

SMC Author

Naman Desai

Status

Faculty

School

School of Economics and Business Administration

Department

Accounting

Document Type

Article

Publication Date

2017

Publication / Conference / Sponsorship

Advances in Accounting

Description/Abstract

This paper examines the impact of two contradictory psychological traits, self-deception (SD) and professional skepticism (PS), on individuals' assessment of ethicality of various earnings management choices. Whereas, SD allows individuals to reduce cognitive dissonance arising from self-serving unethical behavior, PS would force individuals to question such self-serving behavior and, as a result, could make them less likely to act unethically. Our results indicate that SD, PS, and participant type significantly affected the participants' ethicality ratings. Managers exhibiting high (low) SD and low (high) PS view the earnings management techniques that were generally considered to be unethical, as relatively more (less) ethical. However, the SD and PS scores of accountants are not significantly related to their ethicality ratings. This result could be driven by the fact that accountants tend to have greater exposure to information that emphasizes ethics (professional standards and education) and hence psychological traits have a lesser effect on their ethicality ratings.

Keywords

Self-deception, Professional skepticism, Ethicality, Perceptions

Scholarly

yes

Peer Reviewed

1

DOI

10.1016/j.adiac.2017.04.002

Volume

37

First Page

85

Last Page

93

Disciplines

Accounting | Business | Economics

Original Citation

Agarwalla, S., Desai, N.K., & Tripathy, A. (2017). The impact of self-deception and professional skepticism on perceptions of ethicality. Advances in Accounting, 37, 85-93

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