Will Graduating Year Accountancy Students Cheat in Examination ? A Malaysian Case

Due to a series of high profile accounting scandals and corporate collapses such as Enron, World.Com and Andersen, ethical conduct has been widely recognized as a crucial element in accounting profession and education. The growing concern over the ethics of professionals has also called for more academic research into this critical area. Our study aims at assessing ethical behaviors of the future accounting professionals (i.e. final year accounting students) in Malaysia. This study which uses questionnaire survey examined the students’ ethical attitudes as to whether they would act unethically in an examination. Also, their attitudes towards whistleblowing – if they become aware of such unethical conduct were examined. A vast majority of students (73 per cent), decided to be on the safe side – neither being purely unethical nor whistleblowers. Of the students, 11 per cent chose to become whistleblowers. While only 16 per cent would act unethically in exam, the percentage significantly declined once the risk of being caught was introduced. This indicates that students have not moved further from the first level of Kohlberg’s stages of moral development which highly depends on the punishment and penalty in order to behave ethically. Results also reveal that students with good academic achievement were less likely to cheat in exam. Furthermore, a larger proportion of male students as compared to female tend to behave unethically. Overall, the study indicates favorable results since the majority of respondents would not prefer to indulge in unethical behavior, although they are not being purely ethical.


Introduction
The accounting scandals and corporate collapses surrounding Enron, World-Com, Global, Crossing and Tyco have caused some to believe that there now exist a "crisis in accounting" (Business Week, 2002).In Malaysian context, public confidence in the accounting profession was badly shaken by the collapse of the deposit-taking cooperatives, and by the Bank Bumiputra and Pan-Electric fiascos in the 1980s (Ooi and Chuah, 1989).To this, Mahfuzah et al. (1996), reported that Malaysia is experiencing an increase in white-collar crime that accountants have failed to detect.There are cases where accountants are sued by their clients, as well as shareholders of their clients respectively.In the former, examples of companies which sued accountants are Bandar Utama City Corporation Sdn.Bhd. and Meton Properties Sdn.Bhd.In the latter, among the accounting firms involved are Johari Abas and Anor and David Low See Keat and Orsants, where they were sued by the shareholders for their losses because the former had failed, as expected to detect wrongdoings of their client companies in the course of their normal duties (Adam et al., 2002).
Viewed from the above scenario, Ameen et al. (1996) suggest that there is a deterioration of ethical behavior in the accounting profession.Teoh (1990) reported the concern among the accounting academicians, corporate accountants and practitioners in Malaysia that professionalism and ethics should be upheld.In relation to that, the purpose of this study, then, is to assess the ethical attitudes of graduating year accountancy students in one university in Malaysia.In particular, these students were surveyed as to whether they will cheat in an examination, whereby they were being offered to receive a copy of the examination paper prior the actual exam day.In the first situation, there was absolutely no chance of being caught, while in the second situation, there was a ten per cent risk of being caught.The students' attitudes towards whistleblowing -if they become aware of such improprieties were also surveyed.Moreover, the effect of gender differences on students' ethical decision was also considered.
This study is significant in that the moral behavior of students in college today is likely to carry to the workplace in the future.The study contributes to the literature in several ways: (1) adding additional evidence to the existing studies on students' ethical decision when facing with real life corporate dilemmas particularly of students in developing countries; (2) providing guidance to accounting educators in incorporating ethics into the curriculum; and also (3) assisting the accounting practitioners and employers in understanding the ethical attitudes if their prospective employees.This paper is structured as follows.The next section provides a summary of relevant literature on several important issues in ethics.This is followed by a description of the research methodology employed.Results and discussions are then presented, with conclusions and limitations contained in the last section.

Whistleblowing
A whistleblower can be defined as someone who discloses significant acts of corruption, waste, fraud, mismanagement or abuse of authority in contravention of the country's law or regulations in either the public or private sector (Lee, 2005).To blow a whistle, undoubtedly, requires extraordinary courage.The whistleblower's dilemma is of two-fold: Near and Miceli (1985) states that "first, the observer must decide whether the activity observed is actually wrongful; that is, illegal, immoral or illegitimate".Next, if the observer determines that the situation is wrongful then that individual must determine if whistleblowing is an alternative in the situation and, if it is an alternative, then to decide whether or not to report that situation".Research on whistleblowing, however, has not established a set on variables that influence the decision to report (Randi & Keenan, 1998)

Stages of Moral Developments
Ethics education, as commented by Shenkir (1990, p.31), should recognize that different students will be operating at different stages of moral maturity.In this context, Kohlberg's (1976) model of moral development suggests that an individual's moral choices change over time and can be explained by any one of the six distinct stages of moral development.These stages determine the level of moral reasoning used by individuals in distinguishing right actions from wrong actions, and thus will impact an individual's "sense of moral obligation" and ability to "deal with ethical conflict" (Loeb, 1988, p.322).The six distinct stages of moral reasoning, in which moral development proceeds through as developed by Kohlberg (1964), and as paraphrased by Davis & Welton (1991) are as follows: In relation to Kohlberg's (1976) model, White (1980, as cited by Davis & Welton, 1991) advocates that college is one of the best places to encourage these types of values development.She believes that college experiences allow one to progress through the stage of concern for individual rights and proceed to the last of Kohlberg's stages, concern with consistent, comprehensive ethical principles.Viewed from the above, in this present study, we are also interested to test whether accounting students has moved out of the first level to the second.In doing this, we provide repeating scenarios which includes the element of a chance being caught, for all the three available scenarios, if the students are involve in any of the unethical action.

Gender Differences
Gender differences is the most frequent individual attributes tested in empirical ethical research (Ruegger & King, 1992;Serwinek,1992;Ford & Richardson, 1994).Nevertheless, a survey into literatures suggests that the issue of gender-based ethical differences is complex (Coate & Frey, 2000).Prior studies on gender effects on moral development have yielded only mixed results and thus it is a contentious issue (Abu Bakar et al., 2008;Roxas & Stoneback, 2004;Malone, 2006;Rest, 1986).Some authors found there are significant differences between male and female students in their ethical attitudes (including Giacomino &Akers, 1998 andRoxas &Stoneback, 2004).Majority of these studies reported that females are ethically more conservative and are concerned more about ethical issues and business ethics, thus arguably reflecting a higher moral development and thus, moral standards (Coate & Frey, 2000;Cohen et al., 1998;Larkin, 2000;Ruegger & King, 1992).For instance, Ameen et al. (1996) reported that female accounting students are "…more sensitive to and less tolerant of unethical behavior" (p.596).In consistent of that, Betz et al. (1989) found that males display more willingness to engage in unethical behavior if the result of the action is to bring power or money.
On contrary to the preceding arguments, some studies report no significant gender differences in ethical judgments on social or business issues (Can S & Dilek Onkal-Atay, 2003;Abu Bakar et al. 2008;Stanga & Turpen, 1991;Butler & Clark, 1999).Some explore further into the issue to find its justifications.For instance, Roxas & Stoneback (2004), in reviewing the rationales and potential explanations of gender differences, commented that the gender socialization approach argues that males and females have distinctive different values and traits due to gender creating different moral orientations and resulting in different decisions and practices.Other potential explanations are provided by some other authors including Yankelovich (1972) and Gilligan (1982).For instance, Yankelovich (1972) concluded males and females to have a different moral orientation with women having a "greater sense of commitment to doing things for others and men more pessimistic".

Participants
The participant subjects in our study were final year graduating students pursuing their Bachelor Degree of Accounting at International Islamic University Malaysia (IIUM).Generally, these students had completed most of the core accounting modules (financial accounting, management accounting, taxation and auditing) and are ultimately likely to start their profession in accounting field in the near future.The questionnaires were distributed and administered to all 235 final year graduating students.This was carried out during the formal lecture period where students were given approximately 15 minutes to complete it.Students were not told that this was a survey to ethical attitudes.All they were told was that there were no correct answers and were encouraged to answer according to their own feelings.As with most questionnaire surveys the complete anonymity of the respondents were assured.A total of 210 usable responses were received, representing an 89.4 per cent response rate.

Survey Instrument
The survey instrument (questionnaire) used in this study was primarily adapted from studies by O' Leary and Cotter (2000) and O' Leary and Radich (2001), with some modifications made to ensure it is more applicable and readable to the existing participants.The instrument contained two parts; the first part is intended to seek students' attitudes towards several ethical dilemmas, while the second part sought the demographic information of the participants.
In particular, the first part of the instrument consisted of two ethical vignettes.The first scenario was pertaining to the decision of whether to accept an offer to receive a copy of a final paper exam the day before the examination.Scenario two was exactly similar to scenario one, except that the former included the possibility of being caught.Specifically, scenarios one and two of the questionnaire is aimed at gaining information on the ethical attitudes of the sample students based on the following research questions: 1) What are the final year accounting students' ethical attitudes to accepting an examination paper before the exam?
2) How are their ethical attitudes affected by the risk of getting caught?
3) Is there an impact of gender on the ethical decisions of students?4) What are students' attitudes towards whistleblowing?5) Is there a relationship between students' performance and their ethical decisions?

Overall results
We shall begin the discussion of the results by translating the three available answers into simpler terms.With respect to Scenario 1 and 2, we can interpret the three answers as the following: i) Those that 'accept Michael's offer and get a copy of the paper' are considered as unethical, ii) Those who 'thank him for the offer but decline' are considered as trying to be on the safe side, iii) while those who 'thank him for the offer, decline, and immediately inform his employers of his offer to you' can be considered as whistle blowers.
Insert Figure 1 Based on results for Scenario 1 (see Figure 1), a large majority of the respondents (i.e.73%) are trying to be on the safe-side.Neither are they being purely unethical nor whistleblowers.It is quite expected, though, that the number of unethical respondents exceeds the number which choose to become a whistleblowers, with 16% and 11% respectively.This, however, may not be a good sign of students' ethical behavior, which partly reflects their willingness to involve in unethical behavior given the situation faced by them out rightly benefited their self-interest, in particular their academic standing.

Insert Figure 2
In this respect, nevertheless, the results seem to be quite on the contrary once the students are being posed with a risk of being caught (i.e.Scenario 2-refer to Figure 2).While the percentage of students who tries to remain on the safe side remains the highest (i.e.80%), a greater percentage of whistleblowers come into rescue (i.e.19% as compared to the earlier 11%).This leaves those who have the guts to behave unethically reduce from 16% to a mere 1% (i.e. an overwhelming decrease by 15%).
In a way, this very small percentage (i.e.1%) of unethical students can be considered as those who are totally unethical person who does not care of the negative consequences that will befallen them should they behave unethically.This may also reflect that regardless what the policymakers or other regulatory bodies do to prevent fraud or the like, there will still be the very few, specifically accountants in this context, who would remain to indulge in unethical acts regardless the harm it caused them in the future.These very few accountants might not have the slightest sense of accountability to the public at large.Additionally, with reference to the increasing number of those who are willing to become whistleblowers (i.e.19%) once they are faced with the ethical risk of being caught, it indicates that accountants would do what they are supposed to do (i.e.whistleblowers) when there is a proper 'stick' mechanism in place, to kind of penalize them accordingly.This particularly means that regulation, implementation as well as enforcements are still very much needed should we want the majority of accountants to behave in an appropriate manner.
This confirms the claim that there is a personal uncertainty for the whistleblower; the system is generally biased against those who simply want to do what's proper.In many cases, whistleblowers are victimized and the price they pay can be exorbitant.Sometimes the rightful authority blatantly fails to protect informants on corporate and market misdeeds.Many accountants who witness the wrongdoings of their colleagues or higher ups are loath to speak out, as the risk of recrimination is high (Lee, 2005).The culture of 'you scratch my back and I will scratch yours' prevails in at least in the business environment.
When comparing the results of this study with O' Leary & Radich's (2001), with special reference to the two related scenarios, the present results seems to be highly consistent in at least two aspects.First, the largest percentage of respondents would prefer to be on the safe side.They neither being purely unethical nor whistleblowers.Secondly, the percentage of respondents that would indulge in unethical act reduces quite tremendously once the students are threaten with the 'stick' (in O'Leary & Radich, 2001, the percentage reduced by 22%).
However, this present study does not support O' Leary & Radich (2001) findings in the sense that in the latter study the percentage of whistle blowers does not change or more specifically increase when 'stick' is provided.

Relationship between gender and ethical attitudes
In determining the impact of gender on their reaction towards ethical dilemma (refer to Table 2), it is interesting to note that male students are more likely to behave unethically, with 39% of them are willing to cheat in examination (a 28% higher than its female counterparts).The percentage of male respondents who would decline the offer is also way below the female respondents with 61% and 89% respectively.This study, thus, supports the earlier literature for example Arlow (1991), Ameen et al. (1996) and Coate & Frey (2000) which says female are more inclined towards making ethical judgment.Nevertheless, the difference of gender impact on whistleblowing is indeed very minimal, with a 1% difference.

Insert Table 2
Further analysis using chi-square test was done in order to determine the significance of relationship between the students' attitudes to cheating in examination and gender differences for Scenario 1.The result shows that the act of being unethical to cheating in examination, being on the safe-side and the whistle blowers are significantly related to gender (χ 2 = 17.5, degree of freedom = 2, p=0.00).Nevertheless, this study does not find consistent result with O' Leary & Radich (2001) in the sense that the latter found that there is less significant gender differences in the ethical stance towards illegal copying.
Next, we try to confirm our results on gender differences by examining Scenario 2 (refer to Table 3).Here, it is found that when there is a chance of being caught, almost all males and females would not dare to behave unethically, with 2.6% and 1.2% respectively.Here, however, it still remains that more males than females who are unethical.

Insert Table 3
Further analysis using chi-square test was conducted in order to determine the significance of relationship between the students' attitudes to cheating in examination and gender differences for Scenario 2. The analysis shows that there is a significant relationship between students' attitude when risk of getting caught being introduced and gender differences (χ 2 = 4.053, degree of freedom = 2, p< 0.05).In other words, students' ethicalness would significantly differ across gender.

Relationship between academic performance and ethical attitudes
With respect to the relationship between students' ethical decision and their academic achievement (measured using current CGPA), the result is quite reasonably expected.Using the Spearman correlations, this study finds the Spearman correlations are significant with an inverse relationship between the variables.More specifically, referring to Table 4, the results for Scenario 1 Spearman correlation is negative 0.157 at the 5% significance level, while for Scenario 2 the Spearman correlation is negative 0.115 at 10% significance level.

Insert Table 4
These results can be interpreted that good students were less likely to cheat in examination as compared to those with lower grades.Among the possible reasons could be that these top performers internalized or at least have better understanding on whatever ethical-related matters or courses which they might have learnt throughout their study period.This understanding might have been positively manifested in their reaction towards ethical situation.As a matter of fact, the students under survey have taken the Auditing 1 subject which covers the Malaysian Institute of Accountants (MIA) Code of Ethics.In addition, the university itself has specifically requires its students to undertake one religion-based subject which relates to ethics, specifically named as the 'Fiqh and Ethics in Everyday Life'.This study, however, does not identify whether the respondents have or have not taken this particular subject.This might be one limitation in this study which might very interesting to be explored in future related studies.Another possible reason for the finding could be due to the fact that good students normally are willing to strive to earn or deserve the good results, rather than 'get' the good results.They also might be well prepared for the exam, and thus would not prefer to indulge in unnecessary unethical act simply to materialize their dream to perform in their exams.
Overall, the study shows quite favorable results since the majority of respondents would not prefer to indulge in unethical behavior, although they are not being highly ethical.This could be partly contributed by the fact that the mission and vision of the university and the department of accounting in which the study was carried out inter alia foster the Islamicisation of the ethics of Muslim students.Being part of the system, the students are supposed to be imbued with Islamic moral and spiritual values which are necessary in order to successfully impart ethical values.Among others, they not only have to take a specific religious-based subject on ethics, but also in their co-curricular activities, there are at least four religious-based modules in which they have to go through before graduating from the university.

Conclusion
Concerns on ethics in accounting profession have placed emphasize on academic research in this area.This study used a questionnaire survey to examine students' attitudes towards cheating in an examination.The study reveals that a vast majority of the students are opting to be on the safe-side (i.e.neither act unethically nor be a whistleblower).However, when the risk of being caught for cheating on an examination was introduced, all except 1% of the respondents chooses not to act unethically.There is also evidence from this study that male students tend to indulge more in unethical manner compared to female.Additionally, ethical behavior has a significant relationship with academic achievement where higher academic achievers are inclined to act ethically.
Realizing the importance of ethics to the accounting profession, accounting education at the higher level institutions should focus on improving ethical capacity of the graduates by seriously and explicitly implementing ethics contents and courses in the accounting curriculum (Abu Bakar, 2007).Organizing ethics-related programs such as debates, talks and seminars on ethics, may also enhance ethical behavior of students.Douglas et al. (2001) contended that culture or environment would have an impact on the ethical judgment of an accountant.Hence, in order to internalize ethics to accounting students equally important is to create an ethical environment within university whereby ethical belief and manners are portrayed in daily conducts and decisions of all parties including academic and non-academic staff as well as students.Ethical leadership of university's management team would also give strong influence to the ethical capacity and awareness of the graduates produced.In promoting the ethical environment it must be made well accepted to all and to materialize it is a long term commitment of the institution (i.e.university).

Limitations
The results obtained here should be interpreted in the light of several limitations.The major limitation relates to the nature of the university in which the study is being carried put.This university is can be considered as a religious-based university, as its name implies (i.e.International Islamic University Malaysia), where the integration of religion and knowledge is very much propagated and emphasized to and on its staffs and students.This is reflected in its curriculum whereby it requires all of its students to undertake four religious-oriented subjects throughout their university education.One of the subjects is Ethics and Fiqh in Everyday Life.Thus, there would be a possibility that these students are 'well-ethicized' by their university, and thus the results might not reflect the population of other accounting students in other university.To address this, another study that extends this present study to other institutions of higher learning (IHL) in Malaysia would be very much useful.
Secondly, the subjects of this study were students from one university located in an urban city in Kuala Lumpur.Shaub (1989) concludes that geographical location may influence an individual's ethical perspective.Third limitation is the one-time application of the survey instrument.A longitudinal study on a specific group of students, possibly beginning with a group of freshmen and tracking them as they progress through their university years would address this problem (Ziegenfuss, 1999;Davis & Welton, 1991).
However, with consideration to these limitations, this study should be treated as part of a larger body of research needed to enhance our understanding on the ethical attitudes of accounting students.It should be borne in mind that a single empirical study such as this, could not, in any case, be viewed as conclusive.

Figure 1 .
Figure 1.Students' ethical attitudes to cheating on an examination (Scenario 1)

Table 1 .
The six distinct stages of moral reasoning Seeking approval of friends and family, the need to be good in your own eyes.Stage 4Obedience to law and order, avoiding the breakdown of society.LEVEL 3 : Postconventional Level Stage 5Awareness of other people's rights, universal principles of justice.Stage 6Concern with consistent ethical principles, equality of human rights and respect for the dignity of human being as individuals.