There are several forces that can encourage unethical accounting practices in organizations. I would have to believe the most common would be money. Accountants hired from an outside agency are paid for there services, they may be paid even more to audit all financial documents in favor of the organization. Accounts on the inside of the agency could receive a bonus or a raise for the same practice. However, there are other reasons. Practices in an organization are learned. Who is to say that these unethical behaviors are not learned and followed by others in the organization? Gould and Kaplan wrote a paper that examines this very principle in 2008 entitled “Leaning unethical practices from a co-worker: The peer effects of Jose Canseco.” This paper takes a closer look the effects of co-workers on each other in terms of leaning different skills even if they may be unethical (Gould and Kaplan, 2008). Another reason unethical accounting practices are encouraged is because of the pressure of the organization’s upper management, or even a direct supervisor. The threat of loosing one’s job is often enough to push people to there limits and exceed them. There can also be more simple matters that encourage this type of practice, such as a disconnect from the purpose and the people served.
There are several reasons that an accountant may use to justify this behavior. An article by Larry Hatch, 2010, lists several justifications or rationalizations for unethical behavior but the ones that would apply more to accounting practices are they are not hurting anyone, they don’t deserve it, or they can replace it (Justifications for Unethical Behavior). In the economic times that we are in today some organizations such as my own are having a hard time staying afloat as it is. I could see someone cooking the books just to keep us in business for a bit longer.
Efforts for change and prevention have to come from outside the organization as well as inside. I do not think that efforts to change these practices have been enacted because organization don’t want to admit it is going on, they know it is going on, or they do not have the policy’s, procedures, or staff to keep up with the monitoring that is necessary. To prevent this type of behavior organizations need to hire reputable accountants, monitor staff, and have people in management that know what to look for in terms of ethical and unethical behavior.
Gould and Kaplan (2008) Leaning unethical practices from a co-worker: The peer effects of Jose Canseco. Retrieved July 7, 2010, from http://ftp.iza.org/dp3328.pdf
Hatch, Larry (2010) Justifications for Unethical Behavior. Retrieved July 7, 2010, from