Why Accountants Under Pressure Still Be Able to Honest? Experimental Research

Abstract

Social pressure causes individuals to behave in a way that deviates from company values. Individuals who experience very strong pressure from both superiors and peers will increase the individual's chances of committing unethical actions (budgetary slack). But on the other hand, several studies show that not all individuals are obedient to social pressure from others. Most individuals, especially accountants, refuse to commit unethical actions even though the threat of very severe punishment awaits. We are interested in analyzing this unique phenomenon. Using experimental research on 90 participants, we found evidence that different levels of individual locus of control can minimize the occurrence of budgetary slack. The results of this study are expected to provide consideration for stakeholders in the financial sector to consider individual personal values as one of the important variables that play a role in budgeting success in companies or organizations.

Supervisor Pressure VS Peer Pressure? Which One is The Worst in Creating Slack

“…When individuals are under pressure from supervisor or co-workers, subordinates tend to make budgetary slack. This action is triggered by the individual's fear of the negative impact they will receive if they are disloyal to individuals who have higher authority [25], [26]as well as the individual's fear of being rejected by the group. Pressure from supervisor causes individuals to follow the wishes of supervisor, even though it is contrary to their life principles and values [15].…”