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THE MORAL REASONING OF PUBLIC ACCOUNTANTS IN THE DEVELOPMENT OF A CODE

THE MORAL REASONING OF PUBLIC ACCOUNTANTS IN THE DEVELOPMENT OF A CODE

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65 SIMPOSIUM NASIONAL AKUNTANSI VI Surabaya, 16 – 17 Oktober 2003 THE MORAL REASONING OF PUBLIC ACCOUNTANTS IN THE DEVELOPMENT OF A CODE OF ETHICS: THE CASE OF INDONESIA. LINDAWATI Universitas Muhammadiyah Malang ABSTRACT This thesis explores the role of moral reasoning in influencing the implementation of codes of ethics as standards and guidance for professional audit practice by Indonesia public accountants. This study focuses on two important aspects of influence: (i) the key factors of professional public accountants in implementing a code of ethics as a standard for audit practice, and (ii) the key activities performed by public accountants as moral agents for establishing awareness of professional values. Two theoretical approaches/ models are used as a guide for exploring the influence of moral reasoning of public accountants. These are: (i) the model of moral development by Kolhberg (1982), and (ii) a model of the AICPA Code of Conduct, especially the five principles of the code of ethics (1992). A case study approach is used to gather and analyse data. The primary data is collected from in depth interviews with 15 financial managers from different company categories. The interview data are summarised and analysed through the pattern coding technique proposed by Miles and Huberman (1994). It is used to compare the resultant factors and activities to the suggested theoretical patterns. The major research findings of this study are: (i) the key factors of professionalism of Indonesian public accountants are independence & objectivity; integrity; responsibility & public interest; due care; scope and services, and (ii) the key activities for establish the willingness of public accountants to be more professional in practice. These findings support the following conclusion (i) moral development is an important component in influencing moral reasoning of the individual public accountant, (ii) the degree of professionalism in a public accountant is determined by the degree of the development of his/her moral reasoning, and (iii) moral reasoning of individuals influences both the Indonesia Public Accountant and the Financial Manager in building and improving the effectiveness of the implementation of codes of conduct. The theoretical contributions of this study include; (i) adding moral reasoning as an important component in creating an awareness of and guide to applying ethics codes as part of the self regulation of public accountants, (ii) adding another key factor that influences the degree of professionalism of public accountant, (iii) adding knowledge to the accounting and auditing areas of the financial manager, and increasing the awareness of the need for ethics in business. Several limitations of the study are acknowledged. The study focuses on only one type of general standard audit of public accountant’s (SPAP).
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