ETHICAL DECISION-MAKING AND EARNINGS MANAGEMENT: A BEHAVIOURAL PERSPECTIVE IN EMERGING ECONOMIES (NIGERIA)

Ephibayerin, Felicia Adjerhore PhD (Accounting)

Authors

Ephibayerin, Felicia Adjerhore PhD (Accounting) Delta State Maritime Polytechnic, Burutu, Nigeria School of Business Studies Department: Accounting

Keywords:

Earnings Management; Ethical Orientation; Organizational Pressure; Professional Commitment; Behavioural Accounting; Nigeria

Abstract

This study explores how ethical decision-making shapes earnings management behaviour within an emerging economy context, focusing on Nigeria. Drawing on the Theory of Planned Behaviour and ethical climate theory, the study evaluates the effects of ethical orientation (EO) and organizational pressure (OP) on earnings management (EM), while examining the moderating role of professional commitment (PC). A structured survey was administered to 210 accounting professionals across public and private institutions. Data were analysed using hierarchical regression techniques with interaction effects. The findings indicate that ethical orientation significantly reduces earnings management practices (β = −0.41, p < .001), whereas organizational pressure increases such practices (β = 0.36, p < .001). Professional commitment weakens the negative relationship between ethical orientation and earnings management (β = −0.18, p = .002). Diagnostic tests confirm the reliability and validity of the model. The study recommends that accounting institutions should strengthen ethics-based training and professional development; organizations should minimize excessive performance pressure that may encourage unethical reporting; regulatory bodies should enhance monitoring mechanisms to ensure compliance with ethical standards; and professional bodies should reinforce commitment to ethical codes through continuous education.

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ETHICAL DECISION-MAKING AND EARNINGS MANAGEMENT: A BEHAVIOURAL PERSPECTIVE IN EMERGING ECONOMIES (NIGERIA)

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