Do Contextual Elements Make Accountants and Other Business People Susceptible to Fraud? A Study on Psychological Distance and Financial Priming

• In Event: Ethical Behavior

Abstract

Recent research suggests that accountants operate in environments that may encourage unethical behavior. This study investigates two psychological processes that may influence accountants and other business peoples’ behavior by influencing how they perceive contextual elements when considering the actions of others: psychological distance and the psychological consequences of money. Psychological distance refers to the distance between an actor and observer and may influence what aspects of an action people tend to focus on. Thinking about money may influence people to make decisions that are devoid of moral or ethical considerations. These processes may be important in our understanding of why employee complicity is often found in the aftermath of business failures. In contrast to our expectations, we provide evidence that accountants may not react to fraudulent behavior in the same way that other business professionals do. Specifically, we find that close proximity and financial priming interact to reduce the likelihood of accountants’ intentions to engage in fraudulent behavior, while the same factors operate independently to increase intentions to engage in fraudulent behaviors for other business people. Interestingly, the two groups recognize ethical issues in a similar manner but their moral judgments and intentions to engage in fraudulent behavior are in opposite directions.

Authors

• Nicholas Hunt, University of North Texas

• Mary B Curtis, University of North Texas