A Survey about the Correlation between the Corporate Ethical Values and Understanding Earnings Management

In the few recent decades the phenomenon of earnings management has been mentioned as one of the problems of accounting profession. The earnings management does not show the financial situation of the organizations and it hides the related information which the investors should be aware of them. Corporate bankruptcies and recent financial crisis have redirected the focus on the earnings management. Researchers believe that unethical behavior of earnings management could be the reason of ethical failure in corporates. The current research aims to study the correlation between these corporate ethical values on the earnings management of Iranian association of CPAs. In terms of aim this research is an applied research and the research methodology of this study is descriptive-correlative. 140 Iranian CPAs were chosen as the research samples and they answered the questions of two standard questionnaires of corporate ethical values or Elias et al (2004) work ethic inventory and Marquardt standard questionnaire of earnings management (1994). Results showed that a positive and significant correlation exists between the corporate ethical values and the earnings management, Furthermore, the earnings management could be predicted by the corporate ethical values. At the end of the article a few applied research suggestions are provided.