The Influence of Accountants’ Ethical Decision Making on Profit Forecasting Taghipourian Yousef*, Asri Jafar** *Department of Accounting, Chalous Branch, Islamic Azad University, Chalous, Iran **Department of Accounting, Ayatollah Amole Science and Research Branch, Islamic Azad University, Amole, Iran Online published on 6 January, 2014. Abstract The subject of ethics is considered to be an important and specific issue in each profession. Neglecting ethical values by the members of a profession will hurt serious and irreparable damages to that particular profession. In sensitive profession of accounting, the concentration of commercial units and increasing profit greatly will place accountants in one environment that is full of contrast and pressure and it will cause them unethical procedures. The present study aims to investigate the effect of accountants’ ethical decision making on profit predictability and the accuracy of profit forecasts. The accountants’ ethical decision making was measured using 198 questionnaires from 79 companies. Data analysis was performed using the structural equation model. The results showed that higher ethical decision making will lead to increased profit predictability and accuracy of profit forecasts. Moreover, the political costs imposed on the company will be much more in large-sized companies. Nonetheless, accountants adopt some methods for manipulating items influencing the benefits of economic unit which are far from away ethical and human values. According to the PAT, it is inferred that companies that engage in long-term loan contracts and debts will normally have to endure certain conditions imposed by creditor. The pressures caused by these contracts leads to the override ethical values in accounting and financial reporting process. Top Keywords Ethical decision making, Profit predictability, Accuracy of profit forecasts. Top |