Do Overall Harm and Societal Pressure Affect Ethical Evaluations in Organizational Fraud?

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Abstract

This study explores the effects of two dimensions of moral intensity, societal pressure and overall harm, on ethical evaluation. We utilize scenarios to consider whether the professional accountants surveyed recognize that the three potentially fraudulent situations are unethical (moral sensitivity) and whether or not their peers should perform the behavior (moral judgment) and would perform the behavior (moral intention). We also explore whether or not the type of fraud affects ethical evaluations.
We find that both overall harm and societal pressure significantly affect moral sensitivity in all three situations; we find that overall harm significantly affects moral judgment not to perform and moral intention not to perform in all three of the organizational fraud situations; and we find limited support that societal pressure affects moral judgment and moral intention not to perform organizational fraud. Finally, we find no significant differences in the ethical evaluation between the different types of fraud.

Authors

• Lynn H. Clements, Florida Southern College

• Tara J Shawver, King's College