Effectiveness of Schwartz’s motivational values and accounting code of ethics on fraudulent financial reporting

In response to recent cases involving materially misstated financial information arising from fraudulent financial reporting, stakeholder of entities and standard and regulated authority have increase their focus on strengthening effective factors on manger's unethical behavior. In experimental analyses, factors influencing the incidence of fraudulent financial reporting were assessed. We examined the effects of Schwartz’s motivational values and accounting codes of ethics, on whether managers misrepresented financial reports. In this study, the selected sample of 319 financial manager and executives in Tehran Stock Exchange were asked to respond to hypothetical situations involving fraudulent reporting procedures and were analyzed using partial least squares (PLS). The occurrence of fraudulent reporting was found to be high in managers with focus on individualism versus universal ism Schwartz’s motivational value. How ever, separately motivational values and accounting codes of ethics were tested and with interaction of two factors with each other played a significant role in fraudulent financial reporting.