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The moderating role of financial managers’ honesty-humility on aggressive financial reporting: evidence from Iran

The moderating role of financial managers’ honesty-humility on aggressive financial reporting:... The purpose of this study is to investigate the moderating role of honesty-humility of financial managers on aggressive financial reporting behavior.Design/methodology/approachTo test the research hypotheses, a scenario-based questionnaire taken from Brink et al. (2018) was used. Using a cross-sectional survey design, the authors collected primary data of 160 financial managers of firms in Iran using structured questionnaires. The research sample selected was based on Cohen et al.’s (2000) table. To test the research hypotheses, analysis of variance was used.FindingsThe results showed that increasing honesty-humility of financial managers decreases the impact of social pressure and risk appetite interaction on aggressive financial reporting. In addition, the results of further analysis showed that reducing the honesty-humility of financial managers increases the impact of risk appetite on aggressive financial reporting. Moreover, the results indicate that reducing the honesty-humility of financial managers increases the impact of social pressure on aggressive financial reporting.Research limitations/implicationsThis finding provides significant evidence for auditor, managers and policymakers in Iran. Policymakers, auditor and company managers can emphasize compliance with the code of ethics, internal control and corporate governance to increase ethics and reduce negative economic consequences.Originality/valueTo the best of the authors’ knowledge, this is the first case in an emerging economy to survey the moderating role of honesty-humility of financial managers on aggressive financial reporting behavior. Also, this study contributes to understanding how factors at the individual, social and organizational level combine to influence financial managers’ aggressive financial reporting behavior. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Journal of Ethics and Systems Emerald Publishing

The moderating role of financial managers’ honesty-humility on aggressive financial reporting: evidence from Iran

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References (51)

Publisher
Emerald Publishing
Copyright
© Emerald Publishing Limited
ISSN
2514-9369
eISSN
2514-9369
DOI
10.1108/ijoes-07-2022-0154
Publisher site
See Article on Publisher Site

Abstract

The purpose of this study is to investigate the moderating role of honesty-humility of financial managers on aggressive financial reporting behavior.Design/methodology/approachTo test the research hypotheses, a scenario-based questionnaire taken from Brink et al. (2018) was used. Using a cross-sectional survey design, the authors collected primary data of 160 financial managers of firms in Iran using structured questionnaires. The research sample selected was based on Cohen et al.’s (2000) table. To test the research hypotheses, analysis of variance was used.FindingsThe results showed that increasing honesty-humility of financial managers decreases the impact of social pressure and risk appetite interaction on aggressive financial reporting. In addition, the results of further analysis showed that reducing the honesty-humility of financial managers increases the impact of risk appetite on aggressive financial reporting. Moreover, the results indicate that reducing the honesty-humility of financial managers increases the impact of social pressure on aggressive financial reporting.Research limitations/implicationsThis finding provides significant evidence for auditor, managers and policymakers in Iran. Policymakers, auditor and company managers can emphasize compliance with the code of ethics, internal control and corporate governance to increase ethics and reduce negative economic consequences.Originality/valueTo the best of the authors’ knowledge, this is the first case in an emerging economy to survey the moderating role of honesty-humility of financial managers on aggressive financial reporting behavior. Also, this study contributes to understanding how factors at the individual, social and organizational level combine to influence financial managers’ aggressive financial reporting behavior.

Journal

International Journal of Ethics and SystemsEmerald Publishing

Published: Apr 25, 2024

Keywords: Honesty-humility; Social pressure; Risk appetite; Aggressive financial reporting

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