Experimental Study on Manager Ethical Evaluation Towards Earnings Management and its Consequences

Lodovicius Lasdi


Recent research on earnings management has generally not examined the specific ethical dilemma that arises when a choice to engage in earnings management results in positive organizational consequences. This study focuses on the consequences of earnings management behavior in response to the positive organizational consequences of earnings management that justify the means of earnings management. This experimental research design uses 2x2 between subjects to investigate manager evaluations of, and reactions to, a scenario in which a hypothetical employee makes a choice whether or not to engage in earnings management, with consequences that are either favorable or unfavorable to the organization. The results indicate that managers may be motivated to discount the ethical impact of earnings management when the consequence has a favorable impact on the organization. This finding has implication for corporate governance in the organization to establish a strong ethical tone throughout the organization.


earnings management; ethics; moral intensity

DOI: http://doi.org/10.33312/ijar.251


  • There are currently no refbacks.


The Indonesian Journal of Accounting Research (IJAR)

Sekretariat :

Editorial Secretariat

Master of Science and Doctoral Programs
Faculty of Economics and Business, Gadjah Mada University

Jl. Nusantara, Bulaksumur Yogyakarta 55281
CP :
Phone  : +62 85227764898
Fax    : +62 274 524606
Website: http://ijar-iaikapd.or.id/
Email  : sekretariat@ijar-iaikapd.or.id

Marketing and Sales Office

Ikatan Akuntan Indonesia
Graha Akuntan, Jl. Sindanglaya No.1 Menteng, Jakarta Pusat 10310
CP :
Reza Fauzi
Divisi Pelayanan, Keanggotaan dan Mitra IAI.
Grha Akuntan, Jl. Sindanglaya No.1, Menteng.
Telp.021-31904232 Ext.324/321



ISSN 2086-6887 (Print)
ISSN 2655 - 1748 (online)


Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.