The Effects of Socio-Cultural Context on Breach of Accounting ethics: A Grounded Theory Study

Abstract

This study explores intuitions of accounting education key stakeholders in Khyber Pakhtunkhwa, Pakistan that what are the effects of social and cultural factors on ethical breaches of accountants and tax evasion. Individual and organizational decisions are based on accounting yet, social and cultural obligations coerce accountants on manipulation of accounts for tax evasion that has negative impact of national exchequer. This study attempts to realize insights of important stakeholders about AE through methodical support of its multifaceted angles. Literature highlights that personal, organizational (multi)national decisions are based on accounting information. Stakeholders’ theory lens is applied as it is widely used in accounting research. Researchers have applied qualitative research approach to provoke 25 open-ended interviews of respondents like, accounting teachers, students, professionals, employers, recruiting agencies and their parents. Data are analyzed through constructivist grounded theory. Findings show that excessive social demands compel accountants on unethical accounting practices for tax evasion that is detrimental for the nation as it makes corruption acceptability in society. In context of the study, weak academic and HR policies lead to appointment of less relevant persons for leading accounting seats. Recommendations of the study are societal interventions, academic endorsements, regulatory and legislative suggestions for eradication of ethical breaches by accountants generally and tax avoidance specifically.