The purpose of this study is twofold. The first objective is to examine the impact of an individual’s ethical ideology and level of professional commitment on the earnings management decision. The second objective is to observe whether the presence of a personal benefit affects an individual’s ethical orientation or professional commitment within the context of an opportunity to manage earnings. Using a sample of 375 undergraduate business majors, our results suggest a significant relationship between an individual’s ethical orientation and decision-making. (...) Further, participants with higher levels of professional commitment seem to be less likely to engage in earnings management behavior and less likely to behave opportunistically. These results have the potential to add to our understanding of certain behaviors in entry-level personnel and should be of interest to managers, practitioners, academicians, and researchers. (shrink)

This study developed and tested a model of culture’s effect on budgeting systems, and hypothesized that system variables and reactions to them are influenced by culture-specific work-related and ethical values. Most organizational and behavioral views of budgeting fail to acknowledge the ethical components of the problem, and have largely ignored the role of culture in shaping organizational and individual values. Cross-cultural differences in reactions to system design variables, and in the behaviors motivated or mitigated by those variables, has implications for (...) the design and effectiveness of budgeting systems. The data largely support our research model, demonstrating the hypothesized national cultural differences in system design variables (e.g., participation, standards tightness, budget emphasis, etc. which we characterized as the opportunity and incentives to create budgetary slack), and the expected relationship between incentives (but not opportunity) to create slack and slack creation behavior. The data demonstrate hypothesized cultural differences in ethical ideology but show ethical ideology related to slack creation behavior only for U.S. managers. A discussion of the results and their implications is included. (shrink)

The "Ibercorp affair" was front-page news in Spain at various times between 1992 and 1995. In itself, there was nothing particularly new about it: a newly formed financial group engaged in legally and ethically reprehensible behaviour that eventually came to light in the media, ruining the company (and the careers of those involved). What aroused public interest at the time was the fact that it involved individuals connected with Spanish public and political life, the media and certain business circles. Above (...) all, it demonstrated the personal, economic, social and political consequences of a business culture based on the pursuit of easy profits at any price (what came to be known as the cultura del pelotazo or "culture of the fast buck"). Again, this is all too familiar in business ethics. But it served to goad Spanish society into a rejection of such behaviour. This article describes the facts and their ethical implications. (shrink)