Journal of Asia Business Studies

The influence of a business ethics course on ethical judgments of Malaysian accountants

Nazli Anum Mohd Ghazali
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Nazli Anum Mohd Ghazali , (2015)," The influence of a business ethics course on ethical judgments of Malaysian
accountants ", Journal of Asia Business Studies, Vol. 9 Iss 2 pp. 147 - 161
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 The influence of a business ethics course
on ethical judgments of Malaysian
accountants
Nazli Anum Mohd Ghazali
Nazli Anum Mohd Ghazali
is an Associate Professor
at the Department of
Accounting, Kulliyyah of
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Economics and
Management Sciences,
International Islamic
University, Kuala Lumpur,
Malaysia.
Received 23 June 2014
Revised 16 September 2014
Accepted 22 November 2014
DOI 10.1108/JABS-06-2014-0042
Abstract
Purpose The purpose of this paper is to examine the influence of ethics instruction received during
tertiary education on ethical judgments of Malaysian accountants.
Design/methodology/approach Data were obtained through questionnaire survey and analyzed
using regression analysis.
Findings A total of 221 respondents representing a 88.4 per cent response rate completed the
questionnaire. The regression results show that ethics instruction received during tertiary education
have a significant impact on both legal and illegal business scenarios. Accountants also judged an
illegal questionable scenario stricter than a legal questionable scenario.
Research limitations/implications The questionnaires were distributed to those firms which
participated in the internship programme. Although the firms which participated were of varying sizes,
care still needs to be taken in interpreting the results, as representativeness remains an issue in studies
of small sample size.
Practical implications The findings appear to suggest that ethics is an important factor influencing
ethical judgments. Hence, the subject should be taught at least at the tertiary level so as to inculcate
ethical values early in younger generation. An ethically imbued workforce can be expected to make
sound and equitable corporate decisions.
Originality/value The study offers preliminary insight into the benefit of introducing the business
ethics course in the undergraduate accounting programme at public universities in Malaysia.
Keywords Malaysia, Accountants, Business ethics, Gender, Ethical judgments
Paper type Research paper
1. Introduction
Ethics is an intrinsic value of individuals which can potentially have an impact on
behavioural intentions and decisions. The importance of ethics in the business world
cannot be emphasized enough. Studies have shown that companies with higher ethical
commitment are engaged in less earnings management (Choi and Pae, 2011), have higher
market valuation (Verschoor, 1999; Choi and Jung, 2008), have higher firm performance
(Berrone et al., 2007; Donker et al., 2008) and are perceived to have higher corporate
financial performance (Jin et al., 2013). Ethics also have an impact on intellectual capital as
an ethical business approach has also been found to be associated with higher
organizational, social and human capital (Su, 2014).
Although issues on ethics have much been written in the academic literature, the
interests among academics and practitioners increase especially after the collapses of
big corporations such as Enron and Parmalat. There had been views that these
collapses could have been avoided if the business environment was more ethically
weathered. In the aftermath of this corporate malfeasance, a number of studies
examined the impact of introducing a business ethics course on ethical judgments.
These studies include Adkins and Radtke (2004), Luthar and Karri (2005), Desplaces
et al. (2007), Nguyen and Biderman (2008) and Martinov-Bennie and Mladenovic
VOL. 9 NO. 2 2015, pp. 147-161, Emerald Group Publishing Limited, ISSN 1558-7894 JOURNAL OF ASIA BUSINESS STUDIES PAGE 147
 (2013). However, with the exception of a few studies, the majority of prior studies had
examined the perceptions of students on the effectiveness of ethics education on
ethical judgment. An opportunity arises for unveiling the relevance and value of
including an ethics course in a university curriculum from the practitioners point of
view. Hence, in further understanding the influence of ethics instruction on ethical
judgment, the present study examines the perceptions of practitioners, specifically
accountants, on two selected questionable business scenarios.
Malaysia provides an interesting avenue for research on the impact of ethics education
on ethical judgment for various reasons. Firstly, although the subject of business ethics
have been introduced in many of the university curriculum in Malaysia either as a
stand-alone course or integrated in several courses, in 2007, the subject was made
compulsory for the accounting undergraduate programmes offered by public
universities in Malaysia. Under the Halatuju 2[1] Reassessment Report on Accounting
Programme at Public Universities of Malaysia 2006, to instil professional ethical values,
good behaviour and high integrity among accountants and also in accordance with
International Accounting Standards 4 issued by the International Federation of
Accountants, of which the Malaysian Institute of Accountants (MIA) is a member, ethics
and corporate governance are to be made compulsory courses in the accounting
degree programme. Hence, the relevance of undertaking the present study in
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assessing the impact of ethics education on ethical judgments. Two questionable

business scenarios are presented to accountants to assess their ethical judgments.
Given that Malaysian accountants are bound by the By-Laws (On Professional Ethics,
Conduct and Practice) of the MIA, it is expected that a stricter ethical stance is applied
when faced with an illegal business scenario.
The research questions of this study are as follows:

RQ1. Does exposure to ethics education at the tertiary level influence ethical judgments
of Malaysian accountants?

RQ2. What are the demographic factors that influence ethical judgments of Malaysian
accountants?

RQ3. Do Malaysian accountants have stricter ethical judgment on illegal than legal
questionable business scenario?
The results show that ethics instruction received during tertiary education have a significant
impact on both legal and illegal business scenarios. The findings provide preliminary
evidence of the relevance and importance of introducing the business ethics course in the
university curriculum. Hence, the subject should continue to be taught in the accounting
degree programmes offered by all institutions of higher learning and perhaps also to be
introduced in other degree programmes either as a stand-alone course or integrated into
a number of courses. In terms of demographic factors, working experience and
professional qualification are statistically significant (at the 5 per cent level) in the illegal
vignette, but only marginally significant (at the 10 per cent) in the legal vignette. Age and
gender do not appear to influence ethical judgments of Malaysian accountants.
Additionally, Malaysian accountants were also stricter in judging illegal business situation,
as evidenced in the statistically significant difference in the mean scores of the two
business vignettes.
The remainder of the paper is as follows. Section 2 discusses the theoretical framework of
the study. Section 3 reviews prior studies and, consequently, develops the research
hypotheses. Section 4 details the research method in selecting sample and collecting data.
Section 5 presents the data findings and analysis, while Section 6 concludes by
summarizing the paper, outlining the limitations and suggesting avenues for future
research.

PAGE 148 JOURNAL OF ASIA BUSINESS STUDIES VOL. 9 NO. 2 2015

 2. Theoretical framework
The theory of moral development proposed by Kohlberg (1973, 1981) emphasizes the
relationship between moral development and moral behaviour. The theory assumes that in
the absence of moral principles or guidance, an individual may engage in unethical
behaviour. According to this theory, an individual experiences stages in reasoning process
in which he will morally mature. Age and gender are expected to influence the maturation
process differently, with older people expected to have higher conscience and ethical
principles; hence, they will be morally inclined than younger people. Girls are expected to
mature earlier than boys, implying that to a certain age, women would be stricter than men
when confronted with ethical dilemmas. Additionally, the moral development process of
individuals may also be influenced by education level and knowledge and skill the
individuals possess. In this context, exposure to business ethics course, working
experience and professional qualifications may affect moral decisions. As these factors
vary from one individual to another, their impact on an individuals capacity to make ethical
decisions may also differ.

3. Literature review and hypotheses development

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The following sub-section discusses prior literature and, consequently, develops the
research hypotheses. In addition to ethics instruction received, demographic factors,
which are age, gender, work experience and professional qualification, are also included
in the research model. These are discussed in turn.

3.1 Ethics instruction received

The failure to incorporate sufficient ethics education into the accounting curriculum has
been criticized by many quarters (Earley and Kelly, 2004; Madison and Schmidt, 2006).
Was lack of professional ethics a contributing factor to the corporate collapses and
scandals (Martinov-Bennie and Mladenovic, 2013)? Others such as Jennings (2004)
question the type of ethics training received by parties concerned during their
undergraduate studies. These authors impliedly criticize the academic community for not
doing enough in ensuring graduates are well-equipped with ethical values and
professionalism upon entering the job market. Nonetheless, whether an ethics course at the
university leads to a more ethical behaviour and decision is unclear. Bloodgood et al.
(2008, 2010) did not find students who had taken a course in business ethics were less
likely to cheat than those who did not take such a course. An earlier study by Davis and
Welton (1991) conclude that formal ethics training is not a significant factor in students
ethics maturation process.
While a number of studies reported that completion of a business ethics course has no
significant impact on students ethical attitudes (Davis and Welton, 1991; Armstrong, 1993;
Ziegenfuss, 1999; Wang and Calvano, 2013), or limited support for the significance of
ethics classes in influencing students ethical judgments (Conroy and Emerson, 2004),
others, including Hiltebeitel and Jones (1992), Gautschi and Jones (1998), Douglas et al.
(2001), Mohamed Saat et al. (2010) and Martinov-Bennie and Mladenovic (2013), found
that ethics instruction had a significant positive impact on students ethical judgments. In
departure from prior studies that examined students perceptions, the present study
investigates accountants ethical orientation. As the majority of prior studies observed a
positive impact of ethics instruction on ethical judgment, the following hypothesis is
proposed:

H1. There is a significant positive relationship between ethics instruction received

during tertiary education and ethical judgments of accountants.

VOL. 9 NO. 2 2015 JOURNAL OF ASIA BUSINESS STUDIES PAGE 149

 3.2 Age
It may be expected that as individuals aged, they would have experienced or encountered
various situations which may impact their decisions or lives. The challenges faced in their
various phases of lives may equip them in understanding ethical and unethical dilemmas
and deciding on the best course of action. Following this line of argument, the older the
person is, the wiser he should be, and thus less tolerant to unethical practices.
Several studies found support for theory of moral development where older people tend to
be stricter in their views than younger people (Lane, 1995; Conroy and Emerson, 2004;
Hartikainen and Torstila, 2004). Older people were also reported to perceive ethics in
accounting education to be more important than younger people (Adkins and Radtke,
2004). Elsewhere, age was found to be positive and significantly associated with moral
competence (Desplaces et al., 2007) and younger respondents were reported to be more
acceptable to ethically questionable situations (Emerson et al., 2007). On the contrary, the
study of Roozen et al. (2001) indicates that older respondents, i.e. those aged above
40 years old, have a significantly lower score on ethical attitude than younger respondents.
Forte (2004) and Nguyen et al. (2008) did not find age to be affecting ethical judgments. As
the majority of prior studies appear to document a positive relationship between age and
ethical judgments, the following hypothesis is proposed:
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H2. There is a significant positive relationship between age and ethical judgments of
accountants

3.3 Gender
Gender is becoming an important agenda in Malaysia, given the recent announcement by
the government that women be given a 30 per cent stake in decision-making in top-level
posts in the corporate sector by 2016. Female participation has also been given recognition
in the revised Malaysian Code on Corporate Governance (2012) with companies having to
disclose their gender diversity policy and targets and measures taken to achieve those
targets. The increasing attention given to women participation can be seen as an effort
towards gender equality while at the same time expecting some positive results in terms of
enhanced corporate performance.
Studies looking at the impact of female directors on corporate boards have found
conflicting results. Female directors have been documented to have significant positive
impact on corporate performance by Campbell and Minguez-Vera (2008, 2010),
Luckerath-Rovers (2013) and Liu et al. (2014). On the other hand, Minguez-Vera and Martin
(2011) and Darmadi (2013) reported a significant negative impact.
In relation to ethical judgments, females have been found to be more ethically sensitive
(Ruegger and King, 1992; Luthar et al., 1997; Conroy and Emerson, 2004), demonstrated
higher levels of moral development than men (Landry et al., 2004) and have higher moral
reasoning than men (Desplaces et al., 2007). Males, on the other hand, were found to have
lower ethical attitudes (Emerson et al., 2007). Other studies, including Adkins and Radtke
(2004), showed that women perceive ethics in accounting education to be more important
than men, and Nguyen et al. (2008) documented that female students displayed a higher
level of ethical judgment than did men after controlling for age.
On the contrary, Hartikainen and Torstila (2004) did not observe a marked gender
differences in their study on finance profession judgment on business scenarios involving
moral choices. Likewise, Roozen et al. (2001) and Wang and Calvano (2013) also did not
find significant gender effect on judgments in business ethics dilemma. As the majority of
prior studies appear to observe a significant impact of gender on ethical judgments, the
following hypothesis is proposed:

H3. There is a significant relationship between gender and ethical judgments of

accountants.

PAGE 150 JOURNAL OF ASIA BUSINESS STUDIES VOL. 9 NO. 2 2015

 3.4 Work experience
It may be expected that the longer a person is in a work force, the more exposed the person
is to real-life situations and the more experienced the person would be in solving and
dealing with business issues. Davis and Welton (1991) conclude that enhancement of
ethical behaviour comes from multiple exposures to the business environment, implying
that the more engaged a person is in business transactions, the more well-informed he is
in making ethical business decisions. On the contrary, there have been studies that
reported otherwise. For example, Roozen et al. (2001) found a significant negative
correlation between work experience and ethical attitude, implying that employees who
have more work experience are less ethical in their decision process. That finding provides
some to support Kelley et al.s (1990) view that after three to five years on a job, employees
may experience work frustration which may cause them to compromise their ethical values
to advance their careers. Another possible explanation for the negative relationship
between work experience and ethical judgment could be the employee may represent a
scarce resource to the firm. Deshpande et al. (2008) documented that employees with
specialized skills were less likely to exhibit ethical behaviour, attributing this finding to the
possibility that because these employees were scarce resources, they are more likely to
get away with unethical behaviour. That could be because the firm is highly dependent on
them and, therefore, would like to retain them as long as possible. Although the study did
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not look at work experience per se, the longer a person is on the job, the higher the
possibility of learning or acquiring certain skills or expertise.
Interestingly, and in contrast to the above argument, Kidwell et al. (1987) observed that
those with longer work experience tend to exhibit more ethical responses in decision-
making. Additionally, Ziegenfuss (1999) also reported practitioners to have significantly
higher mean scores on ethical perception and judgment than accounting students when
deciding on ethical scenarios. Similarly, Weeks et al. (1999) documented higher ethical
judgments by practitioners who were in later career stages than those who were in their
early stages. These results imply that work experience influence ones ethical perception
and judgment.
There have also been studies that did not report work experience to be a significant factor
influencing ethical judgment. For instance, Ziegenfuss and Singhapakdi (1994) did not find
the number of years of auditing experience to be significantly correlated with ethical
perceptions of internal auditors. Likewise, Desplaces et al. (2007) also found no significant
association between years of working experience and both moral competence and moral
reasoning.
The present study tests on the influence of working experience in accounting field on the
ethical judgment of Malaysian accountants. As the findings in prior studies on the impact
of work experience on ethical judgments are inconclusive, the following hypothesis is
proposed:

H4. There is a significant relationship between work experience and ethical

judgments of accountants

3.5 Professional qualification

In Malaysia, to be registered with the accounting regulatory body the MIA, an individual
needs to hold either one of the qualifications listed in Part I of the First Schedule of the
Accountants Act 1967 and gained not less than three years of relevant working experience,
or a member of bodies specified in Part II of the First Schedule of the Accountants Act 1967
or passed the MIA Qualifying Examination and gained three years of relevant working
experience. Part I of First Schedule lists the recognised Bachelor of Accounting degree
programmes offered by public universities in Malaysia, while Part II lists the recognised
professional accountancy bodies. This means that in Malaysia to be called an accountant,
an individual may hold a recognised university accounting degree together with at least

VOL. 9 NO. 2 2015 JOURNAL OF ASIA BUSINESS STUDIES PAGE 151

 three years of relevant working experience without necessarily having a professional
qualification.
Whether possessing a professional accounting qualification would add to ethical sensitivity
of accountants remains unclear. A number of prior studies did not find a significant
relationship between level of qualifications and ethical judgment or moral reasoning
(Kidwell et al., 1987; Serwinek, 1992; Ziegenfuss and Singhapakdi, 1994; Deshpande,
1997; Ziegenfuss, 1999; Forte, 2004; Marques and Azevedo-Pereira, 2009). However,
Swaidan et al. (2003) documented that the more educated consumers rejected
questionable activities more than the less educated consumers. In contrast, Deshpande
et al. (2008) found that those employees with specialized skills were less likely to exhibit
ethical behaviour.
Prior studies did not specifically examine the influence of professional accounting
qualification on accountants ethical judgments. It may be expected that accountants who
possess professional accounting qualifications would be bound by the professions codes
of ethics and, hence, less tolerant to questionable business situations. The present study
proposes the following hypothesis:

H5. There is a significant positive relationship between professional accounting

qualification and ethical judgments of accountants.
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3.6 Legal versus illegal questionable business vignettes

In Malaysia, accountants are bound by the By-Laws (On Professional Ethics, Conduct and
Practice) issued by the Council of the MIA. The By-Laws on Professional Ethics is
substantially based on the Code of Ethics for Professional Accountants of the International
Ethics Standards Board of Accountants, published by the International Federation of
Accountants in April 2010. The By-Laws set the standards of professional ethics and
conduct for members and member firms to observe. A breach of these By-Laws may
require members to answer a complaint before the Investigation and the Disciplinary
Committees of the Institute. Thus, it may be said that these By-Laws act as a guide for
accountants in discharging their professional responsibilities and duties to their clients,
employers, the authorities and the public. At the same time, the penalties for
non-observance of the By-Laws should deter accountants from engaging or involving in
unethical behaviour. Hence, it may be expected that accountants would be stricter in
judging an illegal questionable business scenario than a legal questionable business
scenario.
In their study on accounting practitioners and multidisciplinary students at two southern US
universities, Emerson et al. (2007) found that accounting practitioners were more accepting
of vignettes that were legal (but ethically questionable) and less accepting of those that
violate the law. This finding suggests that legality of the situation affects accountants
ethical judgments. The following hypothesis is proposed:

H6. Accountants judge an illegal business scenario significantly stricter than a legal
business scenario.

4. Research method
4.1 Sample selection and data collection
The target respondents for this survey were accountants registered with the MIA. In
December 2010, a total of 250 questionnaires were distributed to registered Malaysian
accountants. The questionnaires were hand-distributed by students who were attached to
accounting and auditing firms for six months compulsory internship. A total of 221
completed questionnaires, representing a response rate of 88.4 per cent, were collected
by the same students within a month after distributing the questionnaires.

PAGE 152 JOURNAL OF ASIA BUSINESS STUDIES VOL. 9 NO. 2 2015

 4.2 The research instrument
To measure the ethical stance of accountants, two ethical scenarios (one each
representing legal and illegal situations) adopted from Emerson et al. (2007) were included
in the questionnaire[2]. These vignettes were part of the vignettes included in the
questionnaire originally designed by Longenecker et al. (1989), Fritzsche and Becker
(1982) and Harris (1991). For these vignettes, respondents were asked to give opinions on
a seven-point Likert scale from 1 always acceptable to 7 never acceptable. A higher
score implies a stricter ethical stance. The responses to these two vignettes represent the
dependent variable of the research model.
4.2.1 Dependent variables. The two vignettes are as follows:

1. Vignette 1 (legal): A company chairman found that a competitor had made an important
scientific discovery, which would sharply reduce the profits of his own company. He
then hired a key employee of the competitor in an attempt to learn the details of the
discovery.
2. Vignette 2 (illegal): A company paid RM100,000 consulting fee to an official of a
foreign country. In return, the official promised assistance in obtaining a contract that
will produce RM5 million profits for the contracting company.
4.2.2 Independent variables. The focus of this study is on the impact of ethics instruction
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received on ethical judgments of accountants. Questions relating to ethics instruction were

adopted from the study by Douglas et al. (2001). The response to these questions take the
form of five-point Likert scale from 1 strongly disagree to 5 strongly agree. A higher
score implies more exposure to ethics and philosophy instruction during tertiary education.
The other independent variables for the study comprised of demographic information,
which are age, gender, working experience in the accounting field and professional
qualification.

4.3 Data analysis

To analyse the results, descriptive and frequency statistics are first obtained to see the
distribution of data and assess normality. Pearson correlation was then performed to check
for collinearity between independent variables. This is then followed by multiple regression
analyses to test the influence of ethics instruction received during tertiary education, age,
gender, working experience in the accounting field and professional qualification on ethical
judgments. Two regression models were developed to assess the impact of the
independent variables on ethical judgments.
The regression model is as follows:
LEJ/IEJ 0 1EthIns 2Age 3Gender 4WorkExp 5ProfQual
Table I shows operationalization of all variables included in the analysis.
A paired-sample t test was also performed to determine if there is a statistically significant
difference in the accountants judgments of legal and illegal business scenarios.

5. Findings and analysis

5.1 Descriptive analysis
Table II shows the distribution of data in the present study. The descriptive statistics show
that with the exception of age, other variables appear to be normally distributed as the
skewness values are between 1.96 and 1.96, and kurtosis between 3 and 3
(Gujarati, 2003, p. 147). As the majority of the continuous variables are normally distributed,
no transformation is performed on the variables and parametric analysis is applied.
Looking at the mean scores of the variables on ethical judgments, the findings suggest that
on average respondents displayed a strict ethical stance[3] (mean scores of 4.58 and
5.03). A higher mean score for illegal vignette is also observed, indicating that respondents

VOL. 9 NO. 2 2015 JOURNAL OF ASIA BUSINESS STUDIES PAGE 153

 Table I Variables included in the analysis
Variable Definition

Dependent variables
LEJ Legal vignette
IEJ Illegal vignette
0 . . .. . . 5 Regression coefficients
Independent variables
EthIns Mean scores of ethics during tertiary education
Age 1 if 20 years;
2 20-29 years
3 30-39 years
4 40-49 years
5 50-60 years
6 60 years
Gender 1 if male; 2 if female
WorkExp 1 if 5 years working experience in the accounting field;
2 5 years or more
ProfQual 1 if with professional qualification; 0 otherwise
Error term
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Table II Descriptive statistics: continuous variables

Variable Label Minimum Maximum Mean Skewness Kurtosis

Judgment on illegal vignettes IEJ 1 7 5.03 0.364 0.494

Judgment on legal vignettes LEJ 1 7 4.58 0.183 0.613
Ethics instructions received EthIns 1 5 3.79 0.443 1.421
Age Age 1 5 2.32 2.037 4.554

were stricter in tolerating an illegal scenario compared to a questionable legal situation. On

average, respondents were aged between 20 to 29 years old, which is acceptable as the
present study seeks opinion on ethics course received during tertiary education and this
age group probably would remember better than others on the extent of ethics course
exposed to during that period. The mean score of ethics instruction of 3.79 would imply
that on average respondents were fairly exposed to ethics instruction during tertiary
education[4].
Table III provides the frequency statistics of the categorical variables included in the
analysis. It can be seen that more than two-thirds of the respondents were female, almost
three-quarters had less than five years working experience in the accounting field, and
slightly more than one-third had professional qualifications. The statistics regarding work
experience and professional qualification appear to suggest that majority of the
respondents were in the younger age group consistent with the average age of
respondents (Category 2: aged 20-29 years old) documented in Table II.

Table III Descriptive statistics: categorical variables

Variable No. (%)

Gender
1 Male 61 (28)
2 Female 160 (72)
Work experience
1 5 years 161 (73)
2 5 years or more 60 (27)
Professional qualification (ProfQual)
1 with professional qualification 77 (35)
0 without professional qualification 144 (65)

PAGE 154 JOURNAL OF ASIA BUSINESS STUDIES VOL. 9 NO. 2 2015

 5.2 Correlation analysis
Correlation analysis was performed to exclude highly correlated variables from being
tested in the same regression model. Table IV shows the Pearson correlation coefficients
between the independent variables. The highest correlation is between age and work
experience (r 0.649). The significant positive association between age and work
experience suggests that older accountants had more working experience in the
accounting field. Other significant associations are between age and gender, age and
professional qualification and between work experience and professional qualification.
Overall, these findings are expected as older accountants usually would have more
working experience in the accounting field and possess professional qualifications
compared to younger accountants. The negative association between age and gender
implies that older respondents in the survey were males. As all the correlation coefficients
are below 0.7 (Tabachnick and Fidell, 2001, p. 84), collinearity between the variables is not
considered harmful. Hence, all the independent variables are included in the same
regression models.

5.3 Multiple regression analysis

The model with the legal vignette as the dependent variable (see Table V above) shows that
the five independent variables are able to explain 7.8 per cent of the variation in ethical
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judgments of Malaysian accountants. Ethics instruction received is statistically significant

at the 5 per cent level. The positive association between ethics instruction and ethical
judgments suggests that those who had received ethics instruction during their tertiary
education were more ethical in evaluating questionable business situations. Work
experience and professional qualification are marginally significant at the 10 per cent level,
while age and gender are not influencing ethical judgments in this legal vignette. The

Table IV Pearson correlations

Variable Age Gender WorkExp ProfQual EthIns

Age 1
Gender 0.168* 1
WorkExp 0.649** 0.010 1
ProfQual 0.143* 0.027 0.173* 1
Ethins 0.098 0.032 0.035 0.006 1
Notes: **Correlation is significant at the 0.01 level (two-tailed); *correlation is significant at the 0.05
level (two-tailed)

Table V Multiple regression results: dependent variable

7.8%
R squared Beta t value Significance Tolerance Variance inflation factor

Legal ethical scenario

Constant
EthIns 0.167 2.515 0.013*** 0.969 1.032
Age 0.038 0.427 0.670 0.535 1.869
Gender 0.106 1.579 0.116 0.949 1.053
WorkExp 0.153 1.739 0.084* 0.552 1.813
ProfQual 0.125 1.884 0.061* 0.967 1.034
Illegal ethical scenario
Constant
EthIns 0.177 2.675 0.008*** 0.969 1.032
Age 0.038 0.426 0.671 0.535 1.869
Gender 0.011 0.159 0.874 0.949 1.053
WorkExp 0.195 2.218 0.028** 0.552 1.813
ProfQual 0.134 2.029 0.044** 0.967 1.034
***
Notes: Coefficients are shown as significant at; 1; **5 or; *10% level

VOL. 9 NO. 2 2015 JOURNAL OF ASIA BUSINESS STUDIES PAGE 155

 positive relationship between work experience and ethical judgments implies that the more
experienced an accountant is, the more ethically inclined he would be. In contrast and
contrary to expectations, the negative association between professional qualification and
ethical judgments signifies that accountants who possess professional qualifications are
less ethical than others.
When the dependent variable is represented by an illegal vignette (see Table V above),
similar to the findings in Table V, ethics instruction received is statistically significant, but at
the 1 per cent level, while work experience and professional qualification are now
significant at the 5 per cent level. Consistent with the findings in Table V, age and gender
remain to be insignificant in influencing even in an illegal situation.
Overall, the findings appear to be consistent with a number of prior studies. For instance,
Douglas et al. (2001), Mohamad Saat el al. (2010) and Martinov-Bennie and Mladenovic
(2013) also documented positive impact of ethics instruction on ethical judgments. The
positive relationship between work experience and ethical judgment observed in the
present study is also consistent with the findings by Kidwell et al. (1987), Ziegenfuss (1999)
and Weeks et al. (1999). In addition, the negative impact of professional qualification on
ethical judgments is similar to that by Deshpande et al. (2008), who found employees with
specialized skills to be associated with less ethical behaviour.
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The insignificance of age and gender in influencing ethical judgments has also been
reported in previous research. While age was not found to be significant in studies by Forte
(2004) and Nguyen et al. (2008), gender was found to be insignificant in studies by Roozen
et al. (2001), Swaidan et al. (2003), Hartikainen and Torstila (2004) and Wang and Calvano
(2013). Hence, it may be said that the findings in the present study are comparable and in
parallel with a number of prior studies.

5.4 Paired sample t test

Table VI shows the respondents acceptability to the two questionable business vignettes
presented to them. The difference in the mean scores is statistically significant at the 1 per
cent level. As can be seen from the table, respondents were stricter in judging the illegal
scenario (a higher mean score denotes less acceptability). The finding is expected as
accountants are usually bound by the professions code of ethics, which guide them in
discharging their duties in a professional and ethical manner. It would appear from the
result that Malaysian accountants are aware of the legality of the situations (though legality
was not stated in the questionnaire) and, hence, judge the scenarios accordingly.

6. Conclusions
The objectives of this paper were to examine the impact of ethics instruction received at a
tertiary level on ethical judgments. Additionally, the study also investigates demographic
factors influencing ethical judgments of Malaysian accountants and whether they are
stricter in evaluating illegal business scenario. The findings provide evidence on the
significance of ethics instruction on ethical judgments of Malaysian accountants in both the
legal (at the 5 per cent level) and illegal (at the 1 per cent level) vignettes. Additionally, work
experience and professional qualification are also significant in influencing ethical
judgment on the illegal scenario and marginally significant in the legal scenario. Age and

Table VI Acceptability to business vignette

Business vignette
Statistic Legal Illegal t Value Significance (two-tailed)

Mean 4.58 5.03 3.721 0.000

SD 1.654 1.525
Note: Wilcoxon signed rank z 4.180 significance (two-tailed) 0.000

PAGE 156 JOURNAL OF ASIA BUSINESS STUDIES VOL. 9 NO. 2 2015

 gender do not appear to have a significant impact in the two scenarios presented in this
paper.

6.1 Implications of findings

The significance of ethics instruction in influencing ethical judgment of Malaysian
accountants implies that introducing the course at a tertiary level is a step towards the right
direction in shaping graduates into ethically imbued individuals. The Malaysian
governments decision to introduce this course as a compulsory component of the bachelor
of accounting programmes in all public universities in Malaysia appears fruitful in creating
an ethical business climate. Hence, the subject should continue to be taught in institutions
of higher learning. Additionally, the business ethics course may also be extended to other
disciplines as well. Success of an organization does not depend on accountants only.
Instead, all levels in the organization, regardless of backgrounds and qualifications, must
be aware of ethical issues and its implications thereof. Thus, there is a need for ethical
values to be instilled into individuals at the earliest possible. In this regard, the Malaysian
government can influence the ethical awareness process by requiring the curriculum for all
disciplines to include ethical components.
Work experience and professional qualification also appear to be influencing ethical
judgments, especially in an illegal situation. It appears that the longer the working
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experience one has, the more ethical the person would be. This has implications for
employers in recruiting new accountants, as the results suggest that a more experienced
accountant would contribute to more ethical corporate decisions. Employers may require
certain number of relevant working experience before hiring new employees. However,
employers also need to understand that ethical values could also be inculcated by
promoting and ensuring an ethical organizational culture that is accepted and subscribed
to by all individuals in the organization. Employees, in turn, may be persuaded to remain in
an organization for a longer period if a conducive and ethical climate exists in the
organization.
Somewhat unexpected is the finding that accountants who hold professional qualifications
are less ethical in their decisions of questionable business scenario. In this regard, the
relevant professional bodies can play a role by perhaps requiring its members to allocate
certain hours for seminars or workshops on business ethics that discuss case studies
involving real corporate ethical issues. Participation in this type of seminars may help
improve or enhance Malaysian accountants ethical stance. In addition, penalties for
unethical behaviour should be reviewed to ensure that non-observance of the professional
ethics and conduct is dealt with severely so as to deter members from engaging in any
unbecoming behaviour. The professional bodies are also to make members aware of the
profession code of ethics. This can be done for new members by discussing the code
during the members induction week.

6.2 Limitations of study

The respondents for this study were accountants of companies which participated in the
practical training programme of the researcher institution. Hence, generalization of results
may be limited. Additionally, the use of hypothetical vignettes may not totally depict or
capture real-life cases. Therefore, the results should be interpreted cautiously, especially if
respondents had not experienced the situation before.

6.3 Suggestions for further research

Expanding the sample size to include a more representative sample of accountants would
add to generalization of findings. Future study may also investigate a pre- and post-impact
of business ethics course on ethical judgments. As the course was made compulsory in
2007, the first batch of students would have graduated in 2011. A comparison can be made
between recently graduated accountants and those before 2011, who had not undertaken

VOL. 9 NO. 2 2015 JOURNAL OF ASIA BUSINESS STUDIES PAGE 157

 the business ethics course to determine if there is any significant difference in their ethical
judgments. In addition, the sample can also be extended to include other professions to
see if profession has an impact on business ethical performance. Further study is also
needed on the relationship between professional qualification and ethical judgments as the
finding in the present study is contrary to expectations. Perhaps a different research
method such as focus group or group interview can be undertaken to understand and
unveil other factors influencing ethical judgments of accountants and other professionals
alike.

Notes
1. The Hala Tuju 2 Report was prepared after a series of meetings and consultations among
representatives from the Ministry of Higher Education Malaysia, MIA and the accounting
departments of public universities in Malaysia to review the accounting degree programme.
The aims of the review were to raise the quality of the accounting programme so as to be
comparable to accounting programme at the international level and to ensure the curriculum meets
the current needs. The Hala Tuju 2 Report was issued in 2007.
2. However, the legality of the two business vignettes was not stated in the vignette, i.e. respondents
were not informed whether the vignettes were legally acceptable or otherwise.
3. The Likert scale takes a value of 1 always acceptable to 7 never acceptable.
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4. The Likert scale for this question takes the value of 1 strongly disagree to 5 strongly agree.

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 About the author
Nazli Anum Mohd Ghazali is an Associate Professor at the Department of Accounting,
International Islamic University Malaysia. She obtained her Bachelor and Master degrees
from Lancaster University, England, and PhD in Accounting and Finance from Strathclyde
University, Scotland. Her research interests are in the areas of disclosure, corporate
governance, corporate social responsibility, risk management and ethics. She has
published papers in the Journal of International Accounting, Auditing and Taxation,
Corporate Governance: The International Journal of Business in Society, Social
Responsibility Journal, International Journal of Commerce and Management, International
Journal of Business Governance and Ethics, International Journal of Disclosure and
Governance, Managerial Auditing Journal, and many more. Nazli Anum Mohd Ghazali can
be contacted at: nazlianum@iium.edu.my
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