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The Impact of Professional Ethics on Financial Reporting Quality

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The Impact of Professional Ethics on Financial Reporting Quality
Australian Journal of Basic and Applied Sciences, 5(11): 2092-2096, 2011

ISSN 1991-8178

The Impact of Professional Ethics on Financial Reporting Quality
1 1-2

Mahdi Mahdavikhou, 2Mohsen Khotanlou

Young Researchers Club, Hamedan Branch, Islamic Azad University, Hamedan, Iran.

Abstract: This research aims to study the impact of professional ethics on promoting quality of financial reporting. The statistical population in this study includes 440 listed companies in Tehran Stock Exchange (TSE) in 2010. Using Krejcie and Morgan 's table for determining sample size, 205 companies were selected as the statistical sample and a 24-item questionnaire was designed to study professional ethics and qualitative characteristics of financial reporting based on code of ethics of International Federation of Accountants (IFAC) and qualitative characteristics of financial reporting of International Accounting Standards Board (IASB), then the questionnaires were distributed among the financial managers of companies. For testing the hypothesis, relevant statistical tests such as the Spearman 's correlation coefficient and other required tests were used. The data collected was analyzed using the SPSS statistical package. The results pointed to statistically significant relationship between professional ethics and quality of financial reporting. Key words: Ethics, Professional Ethics, Financial Reporting Quality, Tehran Stock Exchange (TSE). INTRODUCTION Accountants have obligations to shareholders, creditors, employees, suppliers, the government, the accounting profession and the public at large. In other words, their obligations go beyond their immediate client. Decisions made on information provided by accountants can materially affect the lives of any or all of these stakeholders. Therefore Behaving ethically is an essential and expected trait (Carroll, 2005). As a result, an accountant is responsible for the consequences of his moral choices not only for his own life but also


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