One of the areas of corporate misconduct that continues to feature in the modern research and studies is improper financial accounting practices. In regard, there are numerous researchers and scholars whose focus have been to identify the factors that contribute to top management of some multinational corporations to engage accounting misconducts. In their research, Magrath and Weld (2002), who explore where the good management ends and fraud begins, observe that most corporate managements, analysts and auditors often allow their quest to meet earning expectations in multinational corporations to supersede good business practices. In this case, Magrath and Weld (2002) postulate that since smooth earning reports guarantee consistent market valuations of companies, their management are likely to engage in the manipulation of financial figures in order to post consistent results, thus ensuring that their companies do not receive lower market valuations. Notably, the findings by Magrath and Weld (2002) on the factors that contribute to improper accounting behaviour shifts blame of such misconduct to the expectations that the financial markets have towards corporations. In other words, their argument are inclined towards the fact that if a business did not risk receiving a lower market valuation when posting its financial status, then the management would be unlikely to engage in accounting misconduct.
公司不当行为的一个领域是不当的财务会计实务，这一领域在现代研究和研究中继续存在。在这方面，有许多研究人员和学者，他们的重点是确定导致一些跨国公司高层管理人员从事会计不当行为的因素。在他们的研究中，Magrath和Weld（2002）探讨了良好管理的终点和欺诈的起点，他们观察到，大多数公司管理层、分析师和审计师通常允许他们追求满足跨国公司的盈利预期，以取代良好的商业惯例。在这种情况下，Magrath和Weld（2002）假设，由于平滑的盈利报告保证了公司的一致市场估值，因此他们的管理层可能会操纵财务数据以发布一致的结果，从而确保他们的公司不会收到较低的市场估值。值得注意的是，Magrath和Weld（2002）关于导致不当会计行为的因素的调查结果将此类不当行为的责任转移到了金融市场对公司的期望上。换句话说，他们的论点倾向于这样一个事实，即如果一家企业在公布其财务状况时没有风险获得较低的市场估值，那么管理层就不太可能从事会计不当行为。
In a similar research on financial misrepresentation, findings reveal that whereas there are different factors that could contribute to the executive tampering with financial reports, they were are more likely to engage in financial misrepresentation if the company’s financial position was likely to affect its stock price on the market. According to Burns and Kedia (2006), Chief Executive Officers (CEOs) of public companies were likely to misrepresent the financial status of these companies with the aim of ensuring that their stock prices do not fluctuate downwards, and as such, creating an avenue to increase their earnings through stock option incentives. In this regard, CEOs are likely to engage in financial reporting malpractice if their compensation package includes a portfolio of stocks from the company. These findings are supported by Harris and Bromiley (2007), who reiterate that if the incentives and other benefits in the compensation package of CEOs are attached to the financial performance of firm, then such CEOs are likely to engage in financial misrepresentation. In this case, CEOs are likely to hide their failures in order to earn rewards based on the assumption that their management and leadership has played a critical role in promoting strong financial performance of the company they lead. Therefore, the actions of the CEOs from the perspective of Harris and Bromiley (2007) are motivated by their personal desire to gain rewards.
在一项关于财务虚假陈述的类似研究中，研究结果显示，尽管有不同的因素可能导致高管篡改财务报告，但如果公司的财务状况可能会影响其在市场上的股价，他们更有可能进行财务虚假陈述。根据Burns和Kedia（2006年）的说法，上市公司的首席执行官（CEO）可能会歪曲这些公司的财务状况，以确保其股价不会向下波动，从而通过股票期权激励创造一条增加其收益的途径。在这方面，如果首席执行官的薪酬包括公司的股票组合，他们很可能会从事财务报告舞弊行为。这些发现得到了Harris和Bromiley（2007）的支持，他们重申，如果首席执行官薪酬方案中的激励和其他利益与公司的财务业绩挂钩，那么这些首席执行官很可能会进行财务失实陈述。在这种情况下，首席执行官们可能会隐瞒自己的失败，以赚取回报，因为他们认为自己的管理和领导层在促进他们领导的公司的强劲财务业绩方面发挥了关键作用。因此，从Harris和Bromiley（2007）的角度来看，首席执行官们的行为是由他们获得奖励的个人愿望驱动的。
Explanation 解释
There are numerous theories on ethics that have been formulated in the past to explain certain human behaviour in society. This study relies on egoism and utilitarianism as the main theories to explain the behaviour of CEOs as financial as financial misrepresentation is concerned. To begin with, Levit (2014) defines egoism as a theory that promotes the aspect that the goal and motivation of a person’s actions should be that of one’s self. Al-Aidaros, Shamsudin and Idris (2013) further explains this in their argument that egoism as a theory emphasises the need for one to always take action based on their personal interests rather than the interests of others. The definition of egoism theory points to the argument that people do not owe any duty to others and as such, they are acting in the right way when they focus solely on their personal interests and happiness rather than considering the interests and happiness of others in their actions. Importantly, there are two major perspectives of egoism namely descriptive egoism and prescriptive egoism. From the perspective of descriptive egoism, it is argued that it is a proven fact that human beings always act based on their personal interest, while from the perspective of prescriptive or ethical egoism, human beings ought to act based on their own personal interests (Gates, 2013). Importantly, egoism is further categorised as behavioural, psychological or philosophical. In regard, behavioural egoism argues that human beings act in pursuit of their self-interest while psychological egoism reiterates that self-interest is the main factor that motivates human beings (Schmid, 2010). Philosophical egoism on the other hand since people’s motivations come from themselves and not from other people, they are self-interested in nature and as such, their own motivations (Schmid, 2010).
过去有许多关于伦理的理论被用来解释社会中的某些人类行为。本研究以利己主义和功利主义为主要理论，从财务虚假陈述的角度来解释CEO的财务行为。首先，Levit（2014）将利己主义定义为一种理论，它促进了一个人行为的目标和动机应该是一个人的自我。Al-Aidaros、Shamsudin和Idris（2013年）在他们的论点中进一步解释了这一点，即利己主义作为一种理论强调，一个人需要始终根据自己的个人利益而不是他人的利益采取行动。利己主义理论的定义指向这样一种观点，即人们对他人没有任何义务，因此，当他们在行动中只关注个人利益和幸福，而不考虑他人的利益和幸福时，他们的行为是正确的。重要的是，利己主义有两种主要观点，即描述性利己主义和规定性利己主义。从描述性利己主义的角度来看，人们认为人类总是基于个人利益行事是一个已被证明的事实，而从规范性或道德利己主义的角度来看，人类应该基于自己的个人利益行事（盖茨，2013）。重要的是，利己主义被进一步归类为行为、心理或哲学。在这方面，行为利己主义认为人类的行为是为了追求自身利益，而心理利己主义则重申，自我利益是激励人类的主要因素（Schmid，2010）。另一方面，哲学利己主义由于人们的动机来自他们自己而不是其他人，他们对自然和自身动机都很感兴趣（Schmid，2010）。