Principle-based accounting and ethical judgement : an empirical study of accountant in Ireland
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Mohd Nordin, Norhafiza
MSc International Accounting and Finance
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Principal-based accounting (PBA) requires accountant to use their own judgment instead of relying on ‘set of rules’ in preparing the financial statement. PBA which is debatable in term of its reliability is adopted by more than hundred countries around the world compared to rules-based accounting (RBA) which is only adopted in the U.S. accounting system. The central aim of this study was to examine whether accountants in Ireland are ethical in making judgment under Principle-based accounting (PBA) based on International Accounting Standard 8, 10, 17, 37 & 38. Additionally this research sought to discover the relation of other factor such as the level of education, length of practising accounting, working experience and management interference might influence accountant ethical judgment. This research involved 133 participants around Ireland. The findings shows that accountant in Ireland is ethical in making judgment under IAS 8, 10, 17 and 38. Furthermore the result shows that the demographic variables positively leads accountant to make ethical judgement. Finally result shows that management interference do influence accountant to involved in unethical act. Findings from this research might give input to accounting standard-setter to improve the guidelines in the accounting standards with the intention of making it more relevant and reliable. The accountancy body in Ireland shall provide seminar, classes and support to improve accountant understanding in particular accounting standard that usually involve with incomplete guideline. Author keywords: PBA, RBA, IAS, Ethical Judgement