LOCUS OF CONTROL, INDIVIDUAL CHARACTERISTICS, AND UNDERSTANDING OF ACCOUNTANT ETHICS AND ETHICAL ACCOUNTANT BEHAVIOR

Abstract

Ethical behavior is crucial in every profession, included accounting profession. The important role of the accountant in keeping stakeholders wealthy makes the accountant has to stick into high standards of ethics. The aim of this study was to analyze the difference level of moral reasoning ability in the accounting profession, measure individual ethical behavior using experimental approaches of hypothetical situation, and empirically test the influence of locus of control, individual demographical characteristics (gender, age, educational background, work responsibility, and work tenure), and the accountant’s understanding code of ethics into the accountant’s ethical behavior measured by moral reasoning proxy.This study use the basic theoretical framework of Kohlberg’s Moral Development Theory in explaining and predicting the relationship of individual ethical behavior with its demographic characteristics. This study also tries to develop Conroy, Emerson & Pons (2009) study which analyze the relation of position level at work with individual ethical behavior, and added some variables: locus of control which referred to Rotter’s, and variable understanding of accountant’s ethical code.This study is a quantitative study using a survey method to find the effect of independent variables, partial and simultaneously to ethical behavior. We analyze sample responses to 96 respondents who works as an accountant in financial industry include banks and non-banks and the result shows that locus of control and accountant’s understanding of ethical code relates positively and significantly to accountant’s ethical behavior, while demographic characteristics are not a significant predictor of ethical behavior among accountant profession.