Do professional management accountants in business understand their professional code of ethics? Evidence from the Indian context
Journal of Accounting in Emerging Economies
ISSN: 2042-1168
Article publication date: 16 February 2023
Issue publication date: 9 February 2024
Abstract
Purpose
This paper aims to provide an objective and comprehensive evaluation of the understanding of the professional code of ethics of Indian Professional Management Accountants in Business (PMAIBs). It further delves into their individual, job and organizational characteristics as determinants of their understanding of the code.
Design/methodology/approach
This study relies on data from 247 responses to a survey-based questionnaire. Overall scores and sub-scores of the level of understanding of the code were calculated based on questions grounded in IESBA Code and ethical dilemmas. The drivers of these scores were then examined using one-way ANOVA, OLS, Probit and ordered probit regressions.
Findings
This study found considerable heterogeneity in Indian PMAIBs' understanding of their professional code of ethics and substantial scope for improvements. PMAIBs were stronger in Application, Resolution and Threats but weaker in Theory and Principles. Further, PMAIBs who had ranked themselves higher on code-familiarity, had higher moral maturity, hailed from western India and worked for foreign-listed, foreign-owned firms were found to have a higher level of understanding of the code. Highly educated elderly professionals and professionals with more responsibility areas exhibited a lower level of understanding of the code.
Research limitations/implications
Insights from the study can help professional bodies, employers and academics identify and segment PMAIBs based on their ethics-training needs and customize interventions, which can benefit businesses and society through reduced corporate ethical failures. Considering the risk implications of Indian PMAIBs' inadequacies in understanding their code of ethics, the Indian professional accounting organization (ICAI-CMA) should mandate ethics in continuing professional development and expedite its long pending convergence with the IESBA code, a global benchmark for professional accountants.
Originality/value
This paper assesses the understanding of the professional code of ethics of PMAIBs, which is crucial yet amiss in the accounting ethics literature. While ethical decision-making is extensively researched, how well the professionals understand their code is yet unexplored. Research on PMAIBs, despite their unique ethical vulnerabilities and increasingly vital role in organizations, is still dormant. This study aims to fill these gaps by examining PMAIBs from India, an emerging economy under-represented in accounting ethics literature. India offers an important and rich setting for the study due to its large size, fast growth, deep integration with the global economy, high perceived corruption levels and poor ethical behavior of its firms.
Keywords
Acknowledgements
The authors would like to express their gratitude to the Indian Institute of Management Calcutta for supporting this study through a research grant. The authors also wish to thank the anonymous reviewers and the Associate Editor for their valuable comments. They also acknowledge helpful feedback from participants at the 41st Annual Congress of the European Accounting Association (EAA) on an earlier version of this paper.
Citation
Ghosh, A. and Bhuyan, N. (2024), "Do professional management accountants in business understand their professional code of ethics? Evidence from the Indian context", Journal of Accounting in Emerging Economies, Vol. 14 No. 1, pp. 125-156. https://doi.org/10.1108/JAEE-04-2022-0119
Publisher
:Emerald Publishing Limited
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