Mitigating the Effect of Rationalizations on Ethical Accounting Decisions

Date
2018-09-01
Authors
Lowe, D. Jordan
Reckers, Philip
Sauciuc, Ashley
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Abstract
In order to carry out unethical acts, individuals engage in a rationalization process to “morally disengage” from the consequences of their actions. Rationalizations provide the mechanism through which individuals are able to “morally disengage.” The purpose of our research is to examine three experimenter-devised interventions to moderate the influence of rationalizations in the process of making ethics-related decisions. Our first two interventions attempt to mitigate one’s ability to rationalize by highlighting the false premises of readily available rationalizations; whereas, our third intervention attempts to bolster the importance of one’s own self-regulation by providing a cautionary explanation of how individuals are inappropriately motivated to rationalize bad behavior. We predict that these interventions should enhance one’s ethical intentions through a reduction in rationalization. Furthermore, we anticipate that the success of our proposed interventions may vary with the degree of auditor professional commitment to the accounting profession. To test our hypotheses, we conducted an experiment with 88 auditors from four public accounting firms. Our results indicate that for auditors with a low professional commitment, two of the rationalization interventions were effective in lowering auditors’ willingness to accede to his superior’s unethical request than participants in the control group, while the third was not. As expected, the rationalization interventions were not effective for auditors with a high professional commitment level as these individuals are found less likely to rationalize. Implications of our research and suggestions for future research are also discussed. Ratioanizaion
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Rationalization, Fraud, Interventions, Moral Disengagement, Ethical Decisions
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