accounting behavior corruption in organization

1 DECLARATION OF ORIGINALITY AND WORD COUNT I hereby declare that the graduation project is based on my original work except for quotations and citations which have been duly acknowledged. I also declare that it has not been previously or concurrently submitted for any other course/degree at Help University College or other institutions. The word count is 10,324 words. ______________________ VO THI THUY CHAU October, 2011 2 ACKNOWLEDGEMENT The first thing I would say that I can not accomplish this dissertation without the enthusiastic support of my teachers, friends, and with the encouragement of my family. First at all, I want especially to thank sincerely to my supervisor Dr. Le Van Lien, International School, Vietnam National University Hanoi. He is the teacher who is not only caring me during my thesis work but also a mentor to teach me all those years in International School. I would like to express thanks to Ms. Sumathi, Help University College, who initiated and give so much instruction and support about the dissertation. Additionally, I also wish to take this opportunity to thank all others Vietnamese teachers at International School and the Malay teachers at Help University College who taught and helped me during the study process at the International School. I will never forget the teachers and friends who have worked closely with me throughout my five years of study at the University. Finally, I want to send all my academic achievements to my parents who laid the foundation for me to study at the International School and always believing, encouraging me on the path of learning. VO THI THUY CHAU 3 ACCOUNTING BEHAVIOR: CORRUPTION IN ORGANIZATION (VIET NAM) By VO THI THUY CHAU October 2011 Supervisor: Dr. Le Van Lien ABSTRACT Accounting behavior is the role important to society; it is a sensitive concept to our social. Specially, with career that closely associated with economic activities such as accounting. Given the code of ethics for professional accountant, and the factors has contributed to accounting corruption. This study aims to examine the significance of ethic issues in order to ensure good professional accountant in corporate governance and sustainable business practices. In thesis, it carried out via survey of 167 accountants which divided two groups such as accountant and student major in accounting. Both of this groups show that accountants has experience and they has broken ethic than the one has less experience. So, the corruption raises the organization with customers, suppliers, employees and other individual, and also as a result of these acts as courtesy gifts, kickbacks and discriminatory pricing. 4 TABLE OF CONTENTS DECLARATION OF ORIGINALITY AND WORD COUNT 1 ACKNOWLEDGEMENT 2 ABSTRACT 3 TABLE OF CONTENTS 4 LIST OF FIGURES 6 LIST OF ABBREVIATIONS 7 1. INTRODUCTION 7 1.1. Research background 7 1.2. Problem statement 8 1.3. Objectives and spere of research 8 1.3.1. Objectives of research 8 1.3.2 Spere of research 9 2. LITERATURE REVIEW 10 2.1. Corruption 10 2.2. Accounting behavior and its relation to corruption 13 2.2.1 Accounting transparency and accounting regulation 14 5 2.2.2 Corporate governance and auditing for corruption 18 2.3. Code of ethics for professional accountant 20 2.4. Problem corporate value and altruism 24 2.5 Money culture 25 3. RESEARCH METHODOLOGY 27 3.1. Research objective 27 3.2. Research method 27 3.3. Sources of data and sample selection 30 3.3.1 Collecting data 30 3.4. Sample selection 30 3.5. Hypothesis statement 31 4. FINDINGS AND ANALYSIS 32 4.1. Collection of questionaires 32 4.2. Description of results and result analysis 32 4.2.1. Result analysis H1…………………… …………………………… …35 4.2.2. Result analysis H2 39 4.2.3. Result analysis H3 43 6 4.3. General discussion 44 5. CONCLUSION 45 5.1. Conclusion 45 5.2 Recommendation 46 5.3. Limitations of study 47 5.4. Suggestion for future research 48 REFERENCES 49 APPENDIX A: QUESTIONNAIRE 53 APPENDIX B: STATISTICAL TEST 56 7 1. INTRODUCTION 1.1.Research background Accounting behavior is important role decide as part of the value of a company. Behavior accounting was developed to make the behavioral effects transparent to potential and current stakeholders. It also depends on numbers and attempts include human factors and this is done the better understand the impact that business processes, opinion, and human variable have on the value of the overall corporation, now and future. Accounting behavior has relationship with corruption in organization because accountants has responsibility control books accounting, and assisted in financial statements and audits these statements so it is also easy corruption in order to earn profit themselves and for them, they also easy balance account books. This mainly factor, it causes corollary effect to corruption in organization. Besides, those accountants play an important role in good corporate governance and ethical sustainable business practices and it increases corporate governance and transparency as well as increase adoption of professional and ethical. Moreover, accounting is central to working of capitalism, and influence to accounting transparency, corporate governance and audited for corruption, money culture, corporate valued and altruism also contributes significantly and it is never ending corruption. The same as Francis (1990) has been explain what he note about potential impact upon society; the moral has relevant to choice accounting. 8 He explains: “Accounting effect our life and experience. It extends and relationship practice grounded in moral discernment. It is important extent and it can transform the world. Accounting can influence our experience or our life for others in way which cause different from what it can be in absence of accounting or in an alternative kind of accounting”. 1.2. Problem statement Nowadays, the problem of corruption has effected dangerous in all of daily segments because Problem of corruption is not only be internal country but also international problem other external country. Corruption is dangerous effected moral degradation and it can hamper country development problem. It is getting bigger a number of poverty. I want to know about the dangers of corruption and not just cause in a country that greatly influenced the world. And I want to address the issues related to accountant and behavior accounting and corruption, transparency, governance accounting.So, my aim want to clarify to three issues. 1.3. Objectives of research and sphere of research 1.3.1 Objective of research To research about these code of ethics for professional accountant in Vietnam To research these factors contribute to accounting corruption in Vietnam To research these problem corruption accounting 9 To recommend and gave idea to investors, and saw the important ethic in company for corruption in accounting. 1.3.2 Sphere of research Place of research: company in organization in Vietnam. Objective research: accountants and student major in accounting For research in company: public companies and private companies Time period of research: 10 2. LITERATURE REVIEW 2.1. Corruption Corruption could be seen as the collective noun that includes briber, payments, illegal, extortion and the problem relevant to it. This is first problem dealing with corruption and defines what are happening to it. The some document debate in the literature such as it provided by Nye, 1967; Heidenheimer, 1970; Scott, 1972; Thompson, 1993, 1995; Johnston, 1996; and Philp, 1997; center on the abuse of public roles and resources for private gain. Hao and Johnston ( 1995) assert that in the case of changing societies, corruption is a term that used in connection with different situations. Thompson (1993, 1995) suggests that the distinction between public and private corruption is difficult, while Johnston (1999) argues that the reasons for engaging in corrupt activities has become “so ingrained” in the system that nobody talks about them. In addition, Johnston (1999) asks whether corrupt activities can distinguished from acceptable activities. Corruption based on rules and laws because of the universal application, stability and relative precision that formal laws offer ( Nye, 1967 and Scott, 1972).However, at times, law are broken, lose their legitimacy and, as a consequence, the issue becomes whether corruption should be described in terms of its social significance, rather than its nominal meaning, together with cultural implications ( peters & Welch, 1978, Gibbons, 1989). [...]... 18 in directing and controlling a company Internal accounting information (accounting manager) provides an important part of the information on which the companies operate will be decided For example, estimated production costs, saving outsourcing costs or the costs involved in reducing the environmental impact of the manufacturing process often will be influential in determining a how it operates In. .. uncertainty in the system operations country In fact, corruption takes many forms such as briery, fraudulent, illegal, and payments, extortion, smuggling and laundering Therefore, the accounting scandals of business of all sizes, anywhere and malicious intention of the corrupt individuals create chaos and sought personal enrichment at tremendous cost to others, leaving financial ruin The accounting scandals... is very important in reducing asymmetric information, and reporting uncertainty It can be seen as a tool to greater transparency in financial reporting as well as evidence of a system of national accounting In this paper, the accounting regulations are as viewed from the perspective of the use of the audit committee and from the perspective of the use of international standards of financial statements... debate to find ways to include financial statements, accounting standards mathematics, and mold suffering the amended provisions to increase transparency as the time protect investors From a financial perspective, transparency means that " an easy way out or discovered, clear guileless (free of deceit, cunning, craftiness), frank, open" (Fons, 1998) The financial information can change in financial... method which collecting the data from accounting behavior: corruption organization Search document influence accounting behavior: corruption in organization journal and research another sources that help to analysis project‟s issues clearly 27 My research followed the qualitative research and using the secondary data as the main resources Secondary data is existing data collected and used to support... and student major in accounting has high answer “yes” because in fact, accounting transparency effect to social Accountant has answer “80%” and student major in accounting “79.41%” For answer “No” accountant: 20% and student major in accounting is “20.59%” It is very easy to recognize that if accounting report does not transparent, it will increase corruption because who make corruption is person want... behavioral care, confidentiality and professional behavior) Second, I will define and identify ethical issues related to four factors contributing to corruption accountant (accounting transparency and corporate values and behavior, corruption, I want to give the idea of state of accounting corruption in Vietnam 3.2.Research methodology This project will be done by quantitative method which collecting... tool in the fight against corruption Corruption is no discriminate between developed and developing countries As a matter of fact, corruption knows no borders and engaging in all four corners of the globe The adverse effects work for the perpetrators of corruption in particular, and the economic in general which are well documented Whether it is in the form of bribes, pay oil, or illegal gifts, corruption. .. company In which accountants and 33 managers play an important role to create a lack of transparency in the accounting books of the company 2: Do you agree if accounting report does not transparent, it will increase corruption? Yes Student major Total 52 (80%) Accountant No 13 (20%) 65 21 ( 20.59) 102 34 167 in 81(79.41%) accounting Total 133 In this question, both of accountant and student major in accounting. .. importance of teaching ethics in the accounting program and emphasize the nature of ethics and its importance related to professional behavior industry (eg, Coppage, 1 * ^ 92; Siegel et al, 1997) Research ethics in accounting indicates that ethical considerations are important to the professional status of accounting (for example, Ponemon, 1992) Associations related to professional accounting certification . share options) .Accounting is clearly a central role 19 in directing and controlling a company. Internal accounting information (accounting manager). used in the fight again corruption. 2.2.1 Accounting transparency and accounting regulation Accounting transparency was effected to function of financial