ETHICAL DISPOSITION AND PERCEIVED PROFESSIONAL ETHICS AMONG ACCOUNTING

EMPLOYEES OF ACCOUNTING FIRMS IN DAVAO CITY

An undergraduate thesis

Presented to the faculty of the

College of accounting education

Myrjoland s. Blaya

Marc andrew s. Lacsi

Jessa peguero
 Table of contents

Title i

Chapter page

I. Introduction 1

Proposition 6

Questionnaires 7
 Chapter 1

Introduction

Rationale of the study

According to Wilcox (2018), professional ethics is concerned with the norms and moral

behavior that govern the profession and its members. More precisely, in the light of ethical and, in

certain contexts, theological concepts, among which are duty and obligation, professional ethics

discuss concerns, problems, and the social responsibility of the profession itself and individual

practitioners. It is concerned with the duties and responsibilities arising from a specific type of

service performed for individuals or organizations and, in that context, with the estimated duties

arising from contractual agreements. The principles of professional ethics do not, in themselves,

describe individuals' social or personal relationships with each other. Professional ethics can be

understood as indicators of person and business behavior, ideals, and guiding principles that are

professionally accepted. Professional ethics is nothing more than a code of conduct applied to

various professions that are defined by professional members of those professions or professional

organizations. The very essence of professional ethics is to make the employees, persons,

individuals, and professionals follow upright and uniform ethical conduct thus mitigate unethical

practices that will in the long-run hurt organizations (jha, 2017).

Over the decade unethical professional practice among accounting firms has always been

the center of organizations’ issues as it was proven by several kinds of literature to have a

disastrous impact on an organization and its stakeholders. In the recent pwc’s 2018 global

economic crime and fraud survey – the Philippine report, one out of two (54 percent) of the

respondents have indicated that their organizations have encountered economic crime and fraud

at work. These anomalies, being a threat, were experienced at work that lasts for over 24 months.

The Philippines is not spared from this imminent danger, which affects both developed and

developing markets globally.

 The overall effect of the incident threatens to further impede the activities of the company,

depending on the type of economic crime and fraud incident that the organization has

encountered. Our research shows that accidents have a high and medium effect on the morale of

the staff, followed by reputation/brand visibility, then relationships with business partners and

regulators. Asset misappropriation is still the most experienced type of incident among the five

types of economic crime and fraud in the Philippines. However, consumer fraud is the most

destructive form of fraud in the workplace in the Philippines. Owing to these destructive crimes,

companies have lost roughly us$25,000 to us$100 million (lavion, 2018).

In government offices, collusion was also detected because the office of the ombudsman ordered

the dismissal of six commission on audit (coa) auditors, who unlawfully accepted a large amount of

money in reward from the local water utilities administration (lwua) from 2006 to 2010. Former

lwua officials were then charged under the anti-graft law for granting excessive bonuses to

themselves and coa auditors (celis, 2020).

Based on these situations the researchers will attempt to extend knowledge that pertains to

professional ethics among accounting staff and their ethical disposition. To tailor-fit to the local

context the study will be anchored to the Philippine institute of certified public accountant (picpa)

fundamental ethical principles: Integrity – to be straightforward and truthful in corporate and in

professional relationships ; objectivity – not to encourage ideology, conflict of interest or improper

power of another to overtake professional or company judgments; professional competence and

due care – to retain relevant expertise and skills at the level necessary to ensure that a client or

employer receives competent professional services on the basis of new innovations in practice,
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Regulations and techniques and act diligently and in compliance with appropriate technical and

professional standards; confidentiality – to respect the confidentiality of data obtained as a results

of professional and corporate relationships and, therefore, not disclose any such information to

outsiders without proper and specific authority, unless there’s a legitimate right or duty to disclose,

nor use the information for the personal gain of the professional accountant or outsider and

professional behaviour – to comply with relevant laws and regulations and avoid any action that

discredits the profession.Gaps identified from the previous similar studies will be bridged through

knowledge extension about professional ethics among accounting staff and their ethical disposition

in the subject accounting firms in Davao City.

Objectives of the Study

This study aims to determine the level of ethical disposition and perceived professional ethics

among accounting employees of accounting firms in Davao City. Specifically, it will answer the

following questions:

1. To determine the personal profile of accountants in terms of:

1.1 Age

1.2 Gender

1.3 Length of employment

1.4 Civil status

1.5 Job assignment

2. To determine the level of professional ethics of accounting employees in terms of:

2.1 integrity

2.1 Objectivity

2.2 Professional competence

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2.3 Confidentiality

2.4 Professional behavior

3. To determine the ethical disposition of accounting employees;

4. To determine the significant relationship between professional ethics and ethical disposition

among accounting employees of accounting firms in davao city.

Statement of Hypothesis

This study will test the null hypothesis level of significance :

There is no significant relationship between ethical disposition and perceived professional

ethics among accounting employees of accounting firms in Davao City.

Significance of the Study

This study will provide the following institutions and group of people:

 Accounting firms for internal innovation. The study can be used as their references to assess

employees’ professional ethics to prevent risks of ethical violations on corporate law; to

understand its impact on employees’ ethical disposition in the workplace and can bring

significant benefits for the said institutions.

 Accounting employees for professional development. The accounting employees of

accounting firms in Davao City are the primary recipients of this study. Therefore, help them

assess how they govern themselves in the workplace; giving them transparency and

accountability when taking business and ethical decisions.

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 The University of Mindanao. The study would help the university to educate not just the

students but also all its constituents in the business of um about valuing ethical standards and

personal integrity among its subject.

 Future researchers for them to contribute more literature that will guide and provide them as

references for their related researches in the future.

Definition of Terms

To understand more of the terms used in this study, the following terms below are defined

operationally:

 Workplace Confidentiality- refers to any information that you encounter within the course of

business. There are three main types; the private information of consumers , employee

information that managers collect, and proprietary information.

 Ethical Disposition- as those habits which, when nurtured by a person, might sustain virtuous

actions.

 Integrity- is that the act of behaving honorably, even when nobody is watching. People with

integrity follow moral and ethical principles. Integrity should reach professional areas at work

like deciding, interacting with colleagues and serving customers or clients. It is also an

important fundamental element of the accounting profession.

 Job Assignment- is the stated purpose and duties assigned to a staff member, in the

performance of the position description.

 Length of Employment- is the number of years a person is employed in the service they are

currently employed.

 Objectivity- requires that measurements presented in financial statements be supported by

verifiable evidence like an electronic or written record that supports the transactions

represented within the statements. In practical terms, an important attribute of every

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measurement within the statements is that a uniform result would be obtained by two

independent observers, not influenced by personal views or perceptions.

 Professional Behaviour- may be a sort of etiquette within the workplace that’s linked

primarily to respectful and courteous conduct.

 Professional Confidence- is that self-assurance felt by newly assigned, enrolled, hired, or

newly promoted individuals regarding their readiness to handle the strain, competitiveness,

vocabulary, workload, instructional or orientation methods, and related complexities associated

with their new role.

 Professional Ethics- are principles that rule the behavior of an individual or group in a

business environment. Like values, professional ethics guides on how an individual should act

towards people and institutions in such an environment.

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PROPOSITION: This study is anchored to Kant’s Deontological ethics theory. According to

Immanuel Kant in his 'duty-based' theory the inherent responsibility to act is our duty to do what is

right. Duty is not based on the performance, but it is not entirely neglected. We may not want to

follow the moral law; all moral laws seem to us as imperatives, for this reason. Moreover, since

nothing can justify disregarding our moral obligations; we are utterly or categorically bound to

follow it. Do not kill or do not lie, for example. Consequently, Kant considered the 'categorical

imperative' the supreme moral standard.

This duty-based ethics or deontology ethics comes from the Greek word “deon”, meaning duty.

This states that we are morally obligated to act in accordance with a certain set of principles and

rules regardless of outcome. Deontological theories stresses that some acts are always wrong,

even if the act leads to an admirable outcome. Actions in deontology are always judged

independently of their outcome. An act can be morally bad but may unintentionally lead to a

favourable outcome. Kant states that a true moral proposition must not be tied to any particular

conditions, including the identity of the person making the decision. A moral decision must be

disconnected from the particular physical details surrounding its proposition and should be

applicable to any rational being. According to Kant, we first have a perfect duty not to act by

decisions that result in logical ambiguities.

This theory relates to the present study as it tries to investigate the professional ethics among

accounting employees as well as their ethical disposition. The guiding principles will be Kant’s duty

based theory which clearly states that: duty-based decisions should be based on certain principles

and rules which is in the case of accounting practitioners they have the PICPA code of ethics

framed on its professional ethical principles such as integrity, objectivity, professional competence,

confidentiality and professional behavior, and; duty-based decisions must be based on supreme

moral standard regardless of its outcomes.

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QUESTIONNAIRES:

PERCEIVED PROFESSIONAL ETHICS QUESTIONNAIRE

https://www.researchgate.net/publication/306527926 Awareness Level of Professional

Independence Requirements, through
Assimilation of Fundamental Principles of Professional Ethics, by
Jordanian CPA Auditors, in Auditing Process: Field Study

Mean % St. D

(1)- Integrity Terms Availability

1.1- Ethically, the professional accountant commits himself to be 4.05 0.810 0.904

straightforward and honest in all of

his professional engagements.

1.2- The professional accountant behaves fairly in all of his professional 3.83 0.766 1.059

engagements and dealings.

1.3- Consciously, the professional accountant avoids either any significant 3.90 0.780 0.928

misleading or fake

information, or prepared hurriedly by imprudent way.

1.4- The professional accountant is considered to not be either violating or 3.43 0.686 0.931

penetrating the integrity

principle, if he introduces modified report in the case of certain either

passing or deviating of

the client data and information.

The Variable Mean 3.82

Mean % St. D
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(2)- Objectivity Items Presence

2.1- The professional accountant obligates himself not to expose his 3.90 0.780

objectivity to case of 0.841

bargaining and compromise, as a result of bias and conflict of interests.

2.2-The professional accountant protects his objectivity from exaggerate 3.90 0.780

influence of others, and 0.910

avoids all circumstances and cases which may weaken it.

2.3- The professional accountant educates himself and stud studys all 3.80 0.687

cases and conditions that may 0.760

negatively influence his objectivity.

3.80 0.760

2.4- The professional accountant introduces skilled service that not 0.758

connected to bias conditions or

relations.

The Variable Mean 3.85

Mean % St. D

(3)- Professional Competence and Due Care Application

4.03 0.806

3.1- The professional accountant preserves and develops excellent 0.891

knowledge and skills with

high levels, to ensure the client who uses the introduced professional

service.
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3.2- The professional accountant practices his judgment in a sound way, at 4.00 0.800 0.906

the introduction

of the skillful service.

3.3- The professional accountant obligates himself with necessary due 3.90 0.744

care, according to the 0.780

task requirements, at the correct time.

3.4- The professional accountant takes steps to be insured that his 3.85 0.770 0.770

employees have relative

training and supervising.

3.5- The professional accountant works to make his clients, employees and 3.85 0.770 0.736

workers aware of

limits and determinants accompanying service introduction.

The Variable Mean 3.93

Mean % St. D

(4)- Professional Behavior Achievement

4.1- The professional accountant obligates himself with professional 4.30 0.860 0.758

behavior, in obeying to

laws and lists relating to the profession, and avoids any action that may
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disgrace his

professional reputation.

0.826 4.13 0.822

4.2-The professional accountant avoids disgracing his professional

reputation, when

marketing and publicizing himself and his job.

4.3- The professional accountant abides himself with truth, honest and not

exaggerating, 4.10 0.820 0.744

concerning the marketing of his services or qualifications, or experiences,

or the

overstating his fees.

The Variable Mean 4.11

Mean % St. D

(5)- Confidentiality Obligations Completion

5.1-Without the existence either of certain authority or relevant 4.15 0.830

empowerment; the 0.770

professional accountant abstains himself from releasing information of the

audited
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company, which he acquired through work relations.

5.2- The professional accountant obligates himself not to use special 3.93 0.786

information either for 1.023

self utilization, or for third party benefit.

5.3- The professional accountant preserves confidentiality within the social

environment, and 3.98 0.796 1.000

takes care from not deliberate leaks of information, either for relatives or

other parties.

5.4- The professional accountant takes steps to ensure that his employees, 4.20 0.840 0.853

assistants and

advisors respect the ―confidentiality concept‖.

5.5- The ―confidentiality concept‖ is obligated even after the ending of the 4.03 0.806 1.025

work relation

between the professional accountant and the client.

5.6- The professional accountant discovers private information, if it is 4.13 0.826 0.939

legally permitted, and

by the client approval with relative delegation.

5.7- The professional accountant discovers secret information, if the 4.00 0.800 0.934

uncovering is needed as

evidence for judicial disputes, or in the case of juridical infraction.

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5.8- The professional accountant discovers secret information, if 3.88 0.776 0.822

uncovering is professional

requirement, in the case of quality control and the counterpart review.

5.9- When making a decision to either cover or uncover special information, 4.00 0.800 0.906

the professional

accountant takes in account, the sort of the probable contact and to whom

the contacting

will be done,

The Variable Mean 4.03

in International Journal of Economics and Finance · August 2016

ETHICAL DISPOSITION QUESTIONNAIRE (1)

Accounting Ethics Education in Nigeria: Value-Improving or Value Deteriorating Tool?

Table 7. Results of Kruskal-Wallis on Value-Relevance of Ethics Education
99% confidence
Asymp. Monte Carlo
Statement Chisquare df interval
Sig. Sig.
Lower Upper
Accounting ethics exposes me to concept of
0.523 2 0.770 0.770 0.759 0.780
morality in accounting.
Ethics or moral competency appears to me a
15.103 2 0.001 0.001 0.000 0.001
necessary attribute of an accountant.
I conceptualize knowledge of ethics as a
1.260 2 0.533 0.537 0.524 0.550
supplementary source of attaining wisdom.
Ethical orientation will enhance my ability as
an accountant to produce reliable financial 5.556 2 0.062 0.062 0.056 0.068
reports.
Knowledge of ethics will positively influence
me as an accountant to act in the public 0.066 2 0.967 0.984 0.981 0.987
interest.
Knowledge of ethics will allow me to
distinguish between moral and legal 1.108 2 0.575 0.583 0.570 0.596
implications of my actions.

ETHICAL DISPOSITION QUESTIONNAIRE (2)

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Please rate the employee on a scale of 1 - 5 (1 - Poor - employee does not meet job requirement, 2 - Average - employee
meets some job requirements, 3 - Good - employee meets all job requirements, 4 - Excellent - employee meets and often
exceeds all job requirements, 5 - Outstanding - employee exceeds all job requirements)

1 2 3 4 5 N/A

Employee submits high

quality work.

Employee delivers work

on time and meets
deadlines.

Employee arrives to
work on time.

Employee conduct
him/herself in a
professional manner.

Employee takes
initiative when working.

Employee has a positive

attitude at work.

Employee perform well

in high pressure
situations.

Employee seeks out

opportunities for
growth.

Employee gets along

with coworkers.

Employee clearly
communicates with
others.
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SURVEY QUESTIONNAIRE ON ETHICAL DISPOSITION AND PERCEIVED PROFESSIONAL ETHICS

OF ACCOUNTING EMPLOYEES IN THE SUBJECT ACCOUNTING FIRMS

Dear Respondent:

The undersigned is conducting research on “Ethical Disposition and Perceived Professional Ethics of Accounting
Employees in the Subject Accounting Firms in Davao City”. With this may I request a little of your time by
accomplishing the survey form. Rest assured that your answer will be held in strict confidentiality.

Thank you for your participation in this endeavor.

Sincerely,

NAME OF RESEARCHERS
Researchers

Part I
Consent Form

Participation
Be informed that your participation in this survey is voluntary. You may opt to take part in this survey or withdraw the
survey at any time without prejudice. Further you are free to decline to answer any particular question you do not wish to
answer for any reason.

Benefits
As respondent you will receive no direct benefits from participating in this research. However, your responses may help the
researchers find out the current state of teachers’ work stress in Linao Elementary School.

Risks
There are no foreseeable risks involved in participating in this study except for the risk that you may found some questions
to be sensitive or may be distressing to you as you think about your experiences thus you may refer to participation clause of
this consent form.

Confidentiality
Answers from this survey will be collected personally by researchers and will be put into an envelope assuring that your
identity will not be disclosed thus, your responses will remain anonymous. No one will be able to identify you or your
answers, and no one will know whether or not you participated in the study.

Contact
If you have questions at any time about the study or the procedures, you may contact the researchers, at this number
____________.

 You have read the above information

 You voluntarily agree to participate
 You are 18 years of age or older

 Agree

 Disagree
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Part II
Personal Profile of the Respondents

Name (optional): ________________________________ Age: __________

Designation: _________________________ Length of employment: _____

Gender: Male [ ] Female [ ]

Civil Status: Single [ ] Married [ ] Widowed [ ] Divorced [ ]

Part II
Professional Ethics
Direction: Below are list of statement about professional ethics for accountants. Read each one carefully, then, using
the following scale, decide the extent to which it actually applies to you. For best results, answer as truthfully as
possible.
Rating Scale Qualitative Description Interpretation
5 Always true of you The statement pertaining to my professional ethics is
manifested to a very high degree.
4 Very often true of you The statement pertaining to my professional ethics is
manifested to a high degree.
3 Sometimes true of you The statement pertaining to my professional ethics is
manifested to a moderate degree.
2 Rarely true of you The statement pertaining to my professional ethics is
manifested to a low degree.
1 Never true of you The statement pertaining to my professional ethics is
manifested to a very high degree.
Integrity 5 4 3 2 1
1. I believe that honesty in my profession should be observed at all times.
2. I see to it that I always adhere to my company’s code of ethics.
3. I observed transparent dealings in carrying out my daily work task.
4. I make sure that my work is done honestly and competently.
5. I believe that as accounting employee I need to be candid and forthright with a
client's financial information.

Objectivity 5 4 3 2 1
6. As accounting practitioner I make sure that I use only factual, verifiable data
in the books.
7. I can never be persuade by powerful authority or even co-league to make bias
decisions due to the relationship.
8. I believe that I have to comply with the rules and should never allow anyone
to bend my decisions.
9. I adhere to strict observance of fair and balanced criteria for making
decisions
10. To override a financial judgement without profound basis is unethical.

Professional Competence and Due Care 5 4 3 2 1

11. I develop new knowledge which pertains to the practice of my profession
regularly.
12. Developing new skill can give me the ability to offer prompt solutions to
Problems related to my job.
13. I am an active member of professional organizations to keep updated of the
current developments in practice.
14. I believe that upgrading my skills will open the door to new career
opportunities.
15. As professionals I believe that constant advancement is imperative to serve
our clients well.
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Confidentiality 5 4 3 2 1
16. Respect to the confidentiality of information acquired is a must in my
profession.
17. Disclosing confidential information without the consent of authority and
without legal basis is highly unethical.
18. Using financial information for one’s personal advantage is unacceptable.
19. It is highly unethical to share employees' personal data, like payroll details,
bank details, home addresses and other sensitive financial records.
20. During breaks I make sure not to leave my computer and notes containing
confidential information open to others.

Professional Behavior 5 4 3 2 1
21. Complying with relevant laws and regulations is a big mandate of my
profession.
22. I avoid any action that will discredit my profession.
23. Behaving in a more formal or business-like manner is a necessity in my
profession.
24. Respecting others is one of the best ways to exhibit professionalism.
25. Professionalism equates to commitment to effectively perform a given job.

Part III
Ethical Disposition
Direction: Below are list of statement about ethical disposition. Read each one carefully, then, using the following
scale, decide the extent to which it actually applies to you. For best results, answer as truthfully as possible.
Rating Scale Qualitative Description Interpretation
5 Always true of you Strongly agree
4 Very often true of you Agree
3 Sometimes true of you Neither agree nor disagree
2 Rarely true of you Disagree
1 Never true of you Strongly disagree
Integrity 5 4 3 2 1
1. If an action could harm an innocent other, then it should not be done.
2. One should never psychologically or physically harm another person.
3. It is never necessary to sacrifice the welfare of others.
4. The dignity and welfare of the people should be the most important
concern in any society.
5. Moral behaviors are actions that closely match ideals of the most
“perfect” action.
6. The existence of potential harm to others is always wrong, irrespective of
the benefits to be gained
7. People should make certain that their actions never intentionally harm
another even to a small degree.
8. Risks to another should never be tolerated, irrespective of how small the
risks might be.
9. Deciding whether or not to perform an act against the negative
consequences of the act is immoral.
10. One should not perform an action which might in any way threaten the
dignity and welfare of another individual.
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