The Influence of seniority and ethical attitudes toward acconting pra ctitioners performance

Thesis

Submitted to Faculty of Economics and Businesses

As Partial Requirement for Acquiring the Bachelor Degree of Economics

Submitted by:

Novi Riawanti 106082102648

Under Supervision of

Academic Supervisor I Academic Supervisor II

Prof. Dr. Azzam Jasin, MBA Amelia Naim Indrajaya, MBA

INTERNATIONAL CLASS PROGRAM ACCOUNTING DEPARTMENT

Thesis

Submitted to Faculty of Economics and Businesses

As Partial Requirement for Acquiring the Bachelor Degree of Economics

Submitted by:

Novi Riawanti 106082102648

Under Supervision of

Head of Examination Team Secretary

Prof. Dr. Azzam Jasin, MBA Amelia Naim Indrajaya, MBA

Professional Examiner I Professional ExaminerII

Prof. Dr. Abdul Hamid, MS Dr. Amilin, SE., Ak., M. Si

INTERNATIONAL CLASS PROGRAM ACCOUNTING DEPARTMENT

FACULTY OF ECONOMICS AND BUSINESSES STATE ISLAMIC UNIVERSITY SYARIF HIDAYATULLAH

106082102648. The title of her thesis is “The Influence of Seniority And Ethical Attitudes Toward Accounting Practitioners Performance”. After proper examination of work the student, we have decided that she has met all of the requirements for the title of Bachelor of Economics on the field of Accounting, State Islamic University Syarif Hidayatullah Jakarta

Jakarta, March 5th 2010

Comprehensive Examination Team

Examiner I Examiner II

Prof. Dr. Achmad Rodhoni, MM Prof. Dr. Azzam Jasin, MBA NIP: 19690203200112.1.003

Examiner III

Dr. Amilin, SE., Ak., M. Si

CHAPTER I INTRODUCTION

A. Background

Economic progress encourages new businesses that business competition

led to sharp enough. All businesses are trying to gain as much as possible. But

sometimes to achieve that goal, all efforts and actions performed while businesses

have to take measures that ignore the moral and ethical attitudes of business itself,

including the accounting practitioners. It can be happen in all level of employee

from junior until senior. To anticipate this, the professionalism of an accounting

practitioner must be owned by every member of the profession, which is skilled,

knowledgeable, and character.

The past several years have seen an erosion of the public’s confidence in

business and political leaders. Example of corrupt politicians, illegal practices by

corporate leaders, and incompetent professionals abound Within the accounting

profession, several instances of audit failure have led to CPA firms being held

financially accountable to investors for significant sums (Eynon et al,1997, p. 87).

Numerous professional accounting, financial, and auditing organizations have

separately adopted codes of ethics. Most practicing internal, public, and

have voluntarily submitted to the respective codes of conduct which restrict

activities beyond the legal statutes binding the general citizenry.

Many published investigations in the business ethics literature suggest that

there does not appear to be a similar, positive relationship between rank and

ethical attitudes, at least using moral reasoning ability as a proxy for ethical

attitudes. Early analysis by Ponemon (1990) cited in Conroy et al (2009, p.183)

suggests that ethical reasoning capacity differs significantly by hierarchical

position within an accounting auditing firm. Using Colby and Kohlberg’s (1987)

cited in Conroy et al (2009, p. 183) Moral Judgment Interview (MJI) and an

audit-role conflict resolution based on a case study, Ponemon investigates a

nonrandom sample of 52 accounting practitioners. His results suggest that mean

ethical reasoning capacity is lower for managers than their junior counterparts

(staff, senior and supervisors) and lower still for partners- those with the most

experience and prestige within the firm.

These investigation follow work by Amstrong (1987) cited in Conroy, et

al (2009, p. 184) who finds that accounting professionals have lower moral

reasoning ability scores than similarly educated individuals, noting on p.27, that

“accountants are not ethicist.” Similarly, in a study of college students and

auditors, Lampe and Finn (1992) cited in Conroy et al (2009, p. 184) find that

auditors had lower P scores than those of other professionals, average college

that the most robust predictor of ethical attitudes among accounting practitioners

is age, not rank within a firm.

The inverse rank-ethical beliefs phenomenon exists in Indonesian auditing

firm. In Indonesia, the ethical accountant becomes a very interesting issue.

Without ethics, accounting profession would not exist because the accounting

function is the provider of information for business decision-making process. In

conducting its activities as an accountant is required to always enhance its

professionalism, as well as the employees of a company. To support the

professionalism of accountants, The Indonesian Institute of Accountants (IAI)

issued a professional standard that includes a set of moral principles and

regulations governing the professional conduct of accountants code of ethics

Indonesia ties of norms governing the behavior of the relationship between the

accountants with their clients, the accountants with colleagues and between the

profession and the community.

Each practitioner is obliged to obey and implement all the basic principles

and rules of professional ethics as set forth in IAI Code of Ethics, unless the basic

principles and rules of professional ethics are governed by legislation, the

provisions law, or other applicable regulations were different from the Code of

Conduct it. In these conditions, all the basic principles and rules of professional

applicable must be obeyed, but remain in compliance with the principle basis and

other professional ethics rules set forth in this Code.

The reason underlying the need for a code of ethics as the highest

standards of professional conduct in professional accountants is the need for

public confidence in the quality of services provided by professional accountants

who performed regardless of the individual. Public confidence on the quality of

professional accounting services will increase if the profession demonstrates high

standards and meet all needs.

Burton and Goldsby (2009, p. 145) stated that one such concept that

affects practice in business ethics is the phrase ‘‘good ethics is good business”.

The phrase expresses the basic idea that if a manager is deemed to be ethical in

her/his transactions with other actors in the economic marketplace, the manager’s

firm will show improved long run economic results; that is, results that are more

than acceptable to financial analysts. People who make this argument usually

believe that if the focus is on making ethical decisions, the profits will take care of

themselves. However, the usually unstated but obvious corollary to this is that if

managers focus their thinking on increasing long-term profit, the result will be

ethical decisions – in order to be profitable, managers must make decisions based

on ethics. Therefore, ‘‘good ethics is good business’’ can be and is interpreted as a

that society sees as ethical. Those managers that do not make ethical decisions

will punished by the market.

Islam also explains about ethics in business. Ethic may be defined as the

set of moral principles that distinguish what is right from what is wrong. Right

can be interpreted by halal and wrong can be interpreted by haram. In Islam, Allah

describe in Al Quran (Al Imran:104) that people who attain success as those who

are “inviting to all that is good (khayr), enjoining what is right (ma’ruf) and

forbidding what is wrong ( munkar ).

☺

☺

“Let there arise out of You a group of people inviting to All that is good (Islam), enjoining Al-Ma'ruf (i.e. Islamic Monotheism and All that Islâm orders one to do) and forbidding Al-Munkar (polytheism and disbelief and All that Islam has forbidden). and it is they who are the successful”.(QS.

Al Imran: 104)

In the business world, it is difficult to get the fairness. Even, the financial

report made by accountants often made to avoid double tax. Islam as a perfect

In Islam, business ethics deals with justice, fairness, halal, and responsibilities

with the values of tawhid. Islam forbids haram transaction.

“O ye who believed ! Fear Allah and be with those who are true (in world and deed)”. (QS Al-Taubah: 119).

The researcher wishes to build upon previous research in this area by input

the accountant code of ethic as first indicator of ethical attitudes, input the Islamic

business ethic as second indicator of ethical attitudes, and increase the scope by

including accountant, auditor, accounting lecturer, and accounting student.

Table 1.1

Classification Cases Violations Manager violates the rules which are regulated by the

company. This violation is very serious and gives the worst effect to company performance if it is demolished. This manager is more senior than the internal auditor and much respected.

Tax manipulation Company X did illegal tax by way of manipulating the Notice Period Value Added Tax (VAT Return Period) for the period December 2008 - December 2009. If the input tax is greater than output tax, or refundable. Therefore,

B. Research Problem

Research on business ethics and professional ethics for accountants was

done because professional activities of accountants can not be separated from

business activities that require them to work professionally, so other than to

understand and apply professional ethics, they must understand and apply ethics

in business. This research was also conducted for students of accounting because

they are prospective accountants should be given advance knowledge of ethics so

that after graduation they can work in a professional based on professional ethics

and be able to apply ethics in the business environment. This study highlights the

problems specializes to different hierarchical levels of the differences in age (a

senior with a junior)

There are several issues or problems that need to be addressed in the

research. These issues to be resolved can be simplified in the form of answering

these following questions:

a. Does seniority affect the accounting practitioners’ performance?

b. Does ethical attitude influence the accounting practitioners’

performance?

c. Is there any influence between seniority and the ethical attitudes

C. Research Objective

A research paper needs to have certain goals so that it can become

measureable if it is successful or not in conducting its research. The research goals

must be able to answer the research issues above.

a. The seniority has significant affects to the accounting practitioners’

performance.

b. The ethical attitudes have not significant influence to the

accounting practitioners’ performance.

c. Yes, there is an influence between seniority and ethical attitudes

toward accounting practitioners.

D. Research Benefit

The researcher hopes the research conducted may bring benefit in the

following capacity:

a. Provide empirical knowledge about the ethical attitudes in a senior

accountant and senior accounting staff with junior accountant and

junior accounting staff.

c. For the researcher, in order to better understand and expand knowledge

regarding seniority and ethical attitudes.

CHAPTER II LITERATURE REVIEW

A. Seniority

The definition of seniority is relative position or rank on a scale. Early

analysis by Conroy et al (2009, p. 1), Employee rank in accounting firms – like

that of most professional firms – is based largely on seniority. An entry-level

auditor can expect to begin at the ‘‘staff’’ level before being promoted to the

‘‘senior,’’ ‘‘supervisor,’’ ‘‘manager’’ or ‘‘partner’’ level in the firm. Rank is

therefore likely to be positively correlated with experience and knowledge. So, the

indicators of employee rank are based on seniority, experience and knowledge.

So, the employee level can be measure from junior until senior employee.

However, many published investigations in the business ethics literature

suggest that there does not appear to be a similar, positive relationship between

level and ethical attitudes, at least using moral reasoning ability as a proxy for

ethical attitudes. In fact, many empirical investigations in this area have found that

moral reasoning ability among accountants seems to be inversely related to their

level in the firm, for example managers and partners demonstrate lower levels of

B. Ethical Attitudes

The definition of ethic comes from the Greek “ethos”, meaning character.

Another word for ethics is morality, which comes from the Latin “mores”, which

means the habit. Morality centered on the "right" and "wrong" in human behavior.

Therefore, the ethics related to the question of how people will behave toward one

another (Boyton,et al., 2002) cited in Rosita (2008, p.7). Code of ethics according

to Indonesian dictionary is the norm and principles accepted by certain groups as

a basis for behavior (Depdiknas, 2003) cited in Rosita (2008, p.7).

The business ethic literature has consistently demonstrated that gender,

age, and, to a lesser degree, race play key roles in predicting an individuals’

ethical attitudes (Emerson, et al., 2006, p. 75). Age is also a key indicator of

ethical attitudes. Conroy, et al (2009, p. 183) use the ethical attitudes use moral

reasoning ability as a proxy.

Burton and Goldsby (2009, p. 145) stated that one such concept that

affects practice in business ethics is the phrase ‘‘good ethics is good business’.

Presumably, the idea is that firms whose behavior at least meets an identifiable

and justifiable moral standard, or that exhibit good ethics, benefit the shareholders

Ethical attitudes can affect the financial result of the company. Burton and

Goldsby (2009, p. 145) stated that ethical (or unethical) behavior leads to positive

(or negative) financial results.

C. The Indonesian Institute of Accountants (IAI) Code of Ethics

In exercising his profession, an accountant governed by a code of ethics

accountant. Accountants’ code of ethics Indonesia ties is the norm governing the

behavior of the relationship between the accountants with their clients, the

accountant with colleagues and the profession with the community.

The existence of a code of ethics stated explicitly several behavioral

criteria that must be adhered to by the accounting practitioners. Ethics in the

accounting practitioners regulated by Indonesian Institute of Accountants (IAI)

Code of Ethics, the Code is binding on the members of the IAI on one side and

can be used by other accountants who are not yet a member IAI on the other side.

General code consists of 8 principles of professional ethics, which is the

foundation of professional ethical behavior, providing the basic framework for the

rules of ethics, and set implementation of the provision of professional services by

members, which include:

In carrying out his responsibilities as professionals, each member

must always use moral considerations and professionals in all the

activities done.

b. Principle of public interest

Each member is obligated to always act within the service

framework to the public, honor the public trust, and demonstrate

commitment to professionalism.

c. Principle of integrity

To maintain and enhance public trust, each member must fulfill his

professional responsibilities with integrity as high as possible.

d. Principle of objectivity

Each member should maintain objectivity and be free from conflict

of interest in fulfilling his professional obligations.

e. Principle of competence and professional caution

Each member must perform his professional services with care,

the client or employer get benefit from a competent professional

service based on the development of practices, legislation and the most

recent techniques.

f. Principle of confidentiality

Each member have to respect the confidentiality of the information

acquired during the conduct of professional services and should not be

used or disclose such information without consent, unless there is a

right or professional or legal obligation to reveal it.

g. Principle of professional behavior

Each member must behave consistent with the reputation of the

good profession and avoid actions that could discredit the profession.

h. Principles of technical standards

Each member must perform his professional services in accordance

with technical standards and relevant professional standards. In

accordance with the expertise and carefully, members have an

obligation to carry out assignments from the service recipient during

the assignment is in line with the principles of integrity and

Comparison of Sections at the Draft of Code of Ethics and Code of

conduct Current Applicable

Table 2.1

Basic principle of IAPI code of ethics

Section Draft of Code of Ethics Section Current code of ethics 100 Part A: Basic Principle Part I: Basic Principle

110 Integrity Integrity

120 Objectivity Objectivity

130 Competence, Accuracy and Professional Caution

Competence and

Professional Caution

140 Confidentiality Confidentiality

150 Professional Behavior Professional Behavior

Professional

Responsibility

Public Interest

Professional Standard

Table 2.2 Ethics Rules

Section Draft Code of Ethics Section Current Code of Ethics Part B : Ethic Rules Part II : Ethic Rules 200 Threats and Prevention 100 Independency, Integrity

and Objectivity 210 Practitioners Appointment,

Public Accounting Firm, and Public Accounting

200 General Standard and Accounting Principles

client

230 Second Opinions 400 Responsibility to the colleagues

240 Professional Fees and Other Forms of Remuneration

500 Responsibility and other practical

250 Marketing Professional Services

Section Draft Code of Ethics Section Current Code of Ethics 260 Acceptance of Gifts or

Hospitality Form Other

D. TH E ISLAM

IC ETHICAL SYSTEM

270 Storage of Client-Owned Assets

280 Objectivity-All Professional Services

290 Independence of the assurance Commitments

M.S. Antonio (2001, p. 3) asserted that man is the Caliph (Khalifah) on

earth. Islamic view that the earth with everything in it is a mandate of God to the

Caliph (Khalifah) to the best use for the common good. God gives guidance

through His messengers to mankind, both aqidah, akhlaq, or sharia. Two major

components of human needs, namely aqidah and akhlaq, which is constant. Both

did not experience any changes with different time and place. The sharia changing

needs and level of human civilization, which vary according to the respective

messengers. This is written in the Qur'an:

…..

☯

…..

“To each among you, we have prescribed a Law and a clear way.” (Al Maidah: 48)

Sharia is not only a thorough or comprehensive, but also universal.

Comprehensive means Islamic Sharia summarizes all aspects of life, both ritual

(religious) and social (muamalah). Universal meaning of Islamic Sharia can be

applied in every time and place until the end of the day. Universality is obvious

especially in the field of muamalah. In addition to a broad and flexible coverage,

muamalah not differentiate between Muslims and non-Muslims. This fact is

implied in a phrase narrated by Sayyidina Ali, (M. S. Antonio, 2001, p. 4)

“In muamalah, their obligations are our obligations and their rights are our rights”

The nature of this muamalah possible because Islam knows what is termed

as the tsawabit wa mutaghayyirat (principles and variables). In the economic

sector, which is the principle is the prohibition of usury, profit-sharing system,

taking advantage, the introduction of charity, and others. (M. S. Antonio, 2001, p.

5)

The muamalah is given to be rules of the game or the rules of human

social life. Completeness of the muamalah system presented by Prophet

Muhammad SAW summarized in scheme 1. (Zarqa, cited in M.S. Antonio, 2001,

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business person performs from the permissible and the prohibited perspective. It

includes the norms, which regulates his relations with his colleagues, person

having business with him, and his employees. (Shahata and Adh-Dhahir, 2005, p.

51)

Items of the Islamic Codes of Ethics for Business People (Shahata and

Adh-Dhahir, 2005, p.52)

1. Personal Formation of the Business Person which consists of three items.

a. Sincerity of Intention and Purity of Faith

The intention behind work of the business person should be

earning and developing legitimate money that gives him sustenance in

his worship of Allah. Purify of faith should empower his heart. He

should turn to Allah with a sincere intention in whatever he does in

order to win His Pleasure.

b. Noble Morals

The Muslim business person should stick to noble morals such as

honesty, sincerity, loyalty, magnanimity, facilitation, contentedness,

temperance, satisfaction, trust in Allah, and many other moral, which

are bases for dealings according to Allah’s ordinances.

Good treatment of people is crystallized in business people’s

treatment of those who work for them and those who deal with them

in any business field.

2. Determinants of Lawful Business Spheres

d. Legitimate Dealings

All dealings should be carried out within the limits and rules of

Shari’ah. This implies that these dealings should be lawful. Avoiding

areas of suspicion and the forbidden is an obligation irrespective of

the temptation in attaining more money, profit or being promoted in

rank and stature.

e. Conducting Business in What Is Good and Pure.

Business should be in good and pure dealings and be restrained

from the illicit, no matter the amount of wealth and profit involved.

f. Adherence to Islamic Priorities

One should adhere to Islamic priorities in investment, production

and consumption. He should give priority to the necessities over the

luxurious things so as to avoid wasting money in unnecessary things.

3. Business People’s Relations with Others

Values, elevated morals and technical efficiency must be the

criteria for selecting partners.

h. Good Selection of Workers

Workers should be chosen on the basis of their moral qualities as

well as their technical competence. The development of these

characteristics according to the principles of Islam is essential to raise

the efficiency and quality of performance.

i. Cooperation between Business People

Cooperation with other business people is necessary in order to

exchange information and experience. It is a legal necessity

particularly in the case of confronting and challenging the enemies

who threaten the wealth of our Ummah.

j. Consultation in the Fields of Management and Decision making

This item stresses on the importance of consulting experts in the

management field in general and in adopting managerial resolutions in

particular. According to Islamic thought, it is known as shura

(consultation) while it is perceived by the prevalent political thought

4. Towards Perfect Work and Wholly Improved Quality

k. The Use of Up-to-Date Technological Methods

The use of up-to-date technological methods in the business sphere

is a necessity in order to develop and improve business and

production.

i. Perfection and High Quality

Bringing work to a perfect state through following Islamic norms

and technical specifications achieve the optimum amount of public

interests and face competitions.

j. Paying Heed to Research and Advancement

Improving work and developing money operating through legal

channels are objectives of the Islamic Shariah, as they are included

within the sphere of money preservation.

5. Discipline and Certification of Contracts and Transactions

Discipline and organization in business are practical necessities

leading to efficiency of work and service.

l. Recording and Witnessing Transactions

It is obligatory to record and witness transactions at the time they

are conducted using whatever means suit the time, place and context.

m. Certification of Business Dealings and Contracts.

Everything should be clear and evident before striking any

business deals. Transaction must be certified by recording and signing

contracts in the attendance of the witnesses.

The prophet Muhammad (pbuh), called us to comply with our

obligations and covenants,saying ;

"Never break nor throw aside a covenant you have signed with anybody till the period of covenant ends by itself."

n. Amicable Arbitration in Disputes

On the eruption of dispute or conflicts over the items of contract

and transactions, there must be recourse to amicable arbitration.

The rights of the employee are briefly represented in determining

the nature of work assigned to him, his wage, compensations,

reimbursements, and the time due for their fulfillment.

p. Debt-Payment in Due Date

Every debtor is obliged to settle his liabilities in their due date as

long as he is able to. Moreover, this is a sort of commitment

fulfillment, which is considered a bright feature in a Muslim.

q. Quick Fulfillment of Allah's Obligations

Binding by Allah's obligations, which He has proscribed on the

rich's wealth to accure to the poor.

r. Haste in Giving Society its Rights

The country's rights are duties that must be fulfiied, and in their

fulfillment leads to many benefits for the entire society as a

whole.Giving alms and spending money in the cause of Allah are

streams of goodness which never run dry.

Islam has rules about ethic called Islamic ethical system. R. I. Beekun

(1997) stated that the Islamic ethical system differs from secular ethical systems

and from the moral code advocated by other religions. In secular models, a system

often stressed values that de-emphasize our existence in this world. By contrast,

the moral code embedded in Islamic ethics emphasizes the relation of man to His

Creator (Allah SWT). Because Allah SWT is Perfect and Omniscient, Muslims

have a code that is neither time bound nor biased by human whims (p. 8)

Navqi (1981) cited in Beekun (1997, p. 20) asserted that five key

axioms govern Islamic ethics are unity, equilibrium, free will, responsibility,

and benevolence.

1. Application Of The Unity Axiom to Business Ethics (R.I. Beekun,

1997, p. 22) :

A Muslim businessman will not:

a. Discriminate among his employees, suppliers, stakeholder on the

basis of race, color, sex, or religion. This is consistent with

Allah’s purpose for creating mankind:

“mankind! Lo! We have created you male and female, and have made you nations and tribes, that you may know one another”.(Al Hujurat :13)

b. Be coerced into unethical practices, since he has only Allah to

fear and love. He follows the same, unified code of behavior

whether he is in the mosque, earning a living or acting out other

aspects of his life. He will be content:

⌧

“Say: Lo! My worship and my sacrifice and my living and

my dying are all for Allah, Lord of the Worlds.” (Al

An’am:163)

c. Hoard his wealth avariciously. The concept of amanah or trust is

of critical importance to him because he knows that any worldly

merit is transient, and must be used wisely. A Muslim is not

solely guided by profits, and is not seeking to accumulate wealth

at any cost. He realizes that:

“Wealth and sons are allurements of the life of this world: but things that endure -good deeds- are best in the sight of your Lord, as rewards, and best as (the foundation for) hopes”. ( Al

Kahfi :46)

2. Application of the Equilibrium Axioms to Business Ethics (R.I.

Beekun, 1997, p. 24) :

The principle of equilibrium or balance applies both

figuratively and literally to business. For example, Allah admonishes

Muslim businessman to:

☺

⌧

“Give full measure when you measure and weigh with a balance that is straight: that is the most fitting and the most advantageous in the final determination”. (Al Israa’ :35)

Balanced transaction is equitable and just. Islam wants to curb

man’s propensity for covetousness and his love for possessions.

3. Application of the Free Will Axiom to Business Ethics (R.I. Beekun,

1997, p. 25) :

Based upon the axiom of free will, man has the freedom to make a

contract and either honor or break it. A Muslim, who has submitted to

the will of Allah, will honor all contracts.

 

“O you who believe! Fulfill (all) obligations”. (Al Maidah :1)

Yusuf Ali (cited in Beekun, 1997, p. 25) asserted that the word

“Uqud” is a multidimensional construct. It implies the divine obligations

that spring from our spiritual nature and our relation to Allah, our social

obligations such as marriage contract, our political obligation such as

treaty, and our business obligations such as a formal contract to perform

certain tasks or a tacit contact to treat our employees decently.

4. Application of the Responsibility Axiom to Business Ethics (R.I.

Beekun, 1997, p. 27)

Should a Muslim business person behave unethically, he cannot

blame his actions on the pressures of business or on the fact that

everybody else is behaving unethically. He bears the ultimate

Allah states in Quran (Al Muddatstsir: 38 )

☺

⌧

“Every soul will be (held) in pledge for its deeds”.

All obligations must be honored unless morally wrong.

5. Application of the Benevolence Axiom to Business Ethics

According to al Ghazzah (cited in Beekun, 1997, p. 28), There are

six kinds of benevolence:

1. If a person needs a thing, one should give it to him, making as little

profit as possible. If the giver forgoes the profit, it will be better for

him.

2. If a man purchases anything from poor person, it will be more

graceful on his part to suffer a little lost by paying him more than

what he considers to be the proper price. Such an act must produce

an ennobling effect, and a contrary act is likely to have the reserve

effect. It is not praiseworthy to pay a rich man more than his due

when he is notorious for charging high rates of profit.

3. In realizing one’s dues and loans one must act benevolently by

one should make reductions in loans to provide relief to the

debtors.

4. It is only proper that people who want to return the goods they have

purchased should be permitted to do so as a matter of benevolence

5. It is a graceful act on the part of a debtor if he pays his debts

without being asked to do so, if possible long before they are due.

6. When selling things on credit one should be generous enough, not

to press for payment when people are not able to pay on the

stipulated terms.

AXIOM DEFINITION

UNITY Related to the concept of tawhid. The

political, economic, social, and religious aspects of man’s life form a homogeneous whole, which is consistent from within, as well as integrated with the vast universe without. This is the vertical dimension of Islam.

EQUILIBRIUM Related to the concept of ‘adl. A sense of balance among the various aspects of a man’s life mentioned above in order to produce the

best social order. This sense of balance is achieved through conscious purpose. This is the horizontal dimension of Islam.

Five key axioms govern Islamic ethics are summarized in Table 1 ( Navqi, cited

in R.I. Beekun, 1997, p. 21)

E. Previous Research

This research is expanding from previous research that conducted on

similar variables or methodologies. The researcher credits these previous

researchers in the reference section and citing them when they are present. The

most significant and similar research done previously before this research are:

1. Ethical Attitudes of Accounting Practitioners: Are Rank and Ethical

Attitudes Related? by Stephen J. Conroy, Tisha L. N. Emerson, and Frank

Pons (2009).

FREE WILL Man’s ability to act without external coercion within the parameters of Allah’s creation and as Allah’s trustee on earth

RESPONSIBILITY Man’s need to be accountable for his actions

BENEVOLENCE Ihsan or an action that benefits persons other than those from whom the action proceeds without any obligation.

The research use rank and ethical attitudes as the variables. The research

goal is to analyze the inverse rank-ethical beliefs phenomenon. This

research use a multiple vignettes approach to test for the existence of the

inverse rank-ethical belief effect. In multiple vignettes approach, the

respondents are asked to rank the acceptability of behavior depicted in 30

ethically charged scenarios. It also uses multivariate analysis in order to

control for demographic characteristic.

2. Ethical Attitudes of Accountants: Recent Evidence from a Practitioners’

Survey’ by Tisha. L .N. Emerson, S. J. Conroy and C. W. Stanley (2007).

The research focused on ethical behavior within the accounting profession,

especially at Enron and WorldCom cases. The sample of this research are

accounting practitioners and a multidisciplinary student sample at two

Southern United States universities after Enron scandals, and this research

compare sample responses to 25 ethically charged vignettes to test whether

they differ.

3. The Moral Floor: A Philosophical Examination of the Connection

Between Ethics and Business by Brian K. Burton and Michael G. Goldsby

(2009).

The research examines the philosophical basis for the argument that there

explored the philosophical arguments and empirical evidence regarding

these statements and states some research questions for exploration in this

area. In particular the research propose the possibility that a moral floor

exists above which firms that engage in ethical activities will not reap

rewards, but below which firms that engage in unethical activities will be

punished by actors in the economic marketplace.

4. Factors that Influence the Moral Reasoning Abilities of Accountants:

Implications for Universities and Profession by Gail Eynon, Nancy

Thorley Hill and Kevin T. Stevens (1997).

The research examines the Moral Reasoning Abilities (MRA) of Certified

Public Accountants (CPAs) practicing in small firms or as sole

practitioners and the factors that affect MRA throughout their working

careers. The result indicate that small-firm accounting practitioners exhibit

lower MRA than expected for professionals and that age, gender and

socio-political belief affect the moral reasoning abilities of small firm

practitioners.

F. Research Framework

Figure 2.2

Accounting practitioners’ performance

Based on the previous journal, seniority is therefore likely to be positively correlated with experience and knowledge (conroy, et al, 2009, p.1). In this research, the key indicators of seniority are experience and knowledge. Second variable are ethical attitudes. The key indicators of ethical attitudes are Islamic business ethics and the Indonesian Institute of Accountants (IAI) code of ethics. Previous journal indicates that higher levels of religiosity are associated with stronger ethical attitudes (Conroy and Emerson, 2004). Dependent variable is accounting practitioners performance.

G. Hypothesis

Formulation of hypothesis proposed in this research aims to test whether

the seniority and ethical attitudes influence on the performance of accounting

practitioners. On the basis of these ideas, the hypotheses are:

H0: Seniority does not influence the accounting practitioners’ performance.

Ha_ı: Seniority influence the accounting practitioners performance.

H0: Ethical attitudes do not influence the accounting practitioners’ performance.

Ha2: Ethical attitudes influence the accounting practitioners’ performance. Islamic business

ethics

Ethical Attitudes

CHAPTER III METHODOLOGY

A. Research scope

Research will be done by collecting primary data obtained by spreading

questionnaires. Secondary data coming from written and digital literature found in

book, journal, and the internet. The population of this research is the auditors and

B. Sampling Method

The sampling method used in this research is convenience sampling.

Convenience sampling is a non-probability sampling technique where subjects are

selected because of their convenient accessibility and proximity to the researcher.

(Joan Joseph Castillo, 2009).

The subjects are selected just because they are easiest to recruit for the

study and the researcher did not consider selecting subjects that are representative

of the entire population.

In all forms of research, it would be ideal to test the entire population, but

in most cases, the population is just too large that it is impossible to include every

individual. This is the reason why the researcher relies on convenience sampling.

The researcher prefers this sampling technique because it is fast, inexpensive,

easy and the subjects are readily available.

The criteria for the respondents are:

1. Senior and Junior auditors

2. Accountants

thod C. Data Collection Me

Data collection will be used questionnaires given to auditors and

accountants. Questions will order systematically while answers are in the form of

multiple choices.

The questions are closed questionnaire by giving value from every answer

to questions of the questionnaire based on Likertscalemethod, as follows:

S A A

• trongly agree : value weight 7

• gree : value weight 6

• gree somewhat : value weight 5

• Undecided : value weight 4

• Disagree somewhat : value weight 3

• Disagree : value weight 2

• Strongly disagree : value weight 1

D. Research Design

The researcher uses two different kinds of variables, namely exogenous

and endogenous variables, also known as independent and dependant variables.

Figure 3.1

Independent variables Dependent variable

Conroy et al, 2009

X2

Conroy et al,2009 Emerson,et al, 2006

Colby and Kohlberg ,1987 Conroy et al, 2009

A. Exogenous / Independent Variables: X1 = Seniority

X2 = Ethical Attitudes

B. Endogenous / Dependant Variables:

Y1 = Accounting Practitioners Performance

It is hypothesized that X1 and X2 has a direct affect on Y1.

Y = a + b1X1 + b2X2 + ε Relationship Model:

X1 = Seniority as Independent variable

X2 = Ethical Attitudes as Independent variable

Y = Accounting Practitioners Performance as Dependent variable

a = Constant ( Y value if X= 0 )

b = Coefficient

ε = epsilon /disturbance’s error (if any)

Accounting practitioners performance

E. Data Analysis Techniques

For data processing, there are several statistical techniques were used for

different purposes. This includes frequency, descriptive statistics, data quality test,

correlation analysis, and regression analysis (F test and t test).

1. Frequency analysis

In this research, the researchers used frequency analysis to measure the

pattern of respondent’s background. Frequency analysis will analyze gender,

age, job, experience, last position and education.

2. Descriptive statistics

After all data collected, then it will be processed and analyzed by

descriptive statistics. Based on Lind et al (2005, p. 6), descriptive statistics

are methods of organizing, summarizing, and presenting data in an

informative way. Descriptive statistics are numbers that are used to

summarize and describe data. The word data refers to the information that has

been collected from an experiment, a survey, an historical record, etc. One

important use of descriptive statistics is to summarize a collection of data in a

clear and understandable way. The limitation of descriptive analysis is the

these limitations, descriptive statistics provide a powerful summary that may

enable comparisons across people or other units.

A descriptive statistic is a numerical summary of a dataset. In this

research, mean is used to calculate data. There are several different types of

mean, but by far the most commonly used is the arithmetic mean, which is

simply the sum of the measurements divided by the number of measurements.

This is typically what people refer to as the average.

3. Quantitative Analysis

The quantitative analysis Tcan be ensure by validity, reliability test,

normality test and classic assumption test.

st a. Validity te

Validity test intended to measure the extent to which the variables used

to measure really what should be measured. Testing the validity of using the

Pearson correlation that is by calculating the correlation between the scores of

each item questions with a total score (Ghozali, 2001). The criteria used is

valid or invalid if the correlation between the score of each of the questions

with a total score has a level of significance under 0:05 so the questions can

be said to be valid, and if the correlation score of each of the questions with a

total score has a significance level above 0:05 hence the questions are not

The formulation coefficient that used in this study is product moment

(Sutrisno Hadi,1991) as follows:

rXY = n(∑ XY) – (∑X ∑Y)

√[n∑X² - (∑X)²] [n∑Y² - (∑Y)²] Where:

n = Total of resondent

x = Answer score on the question (item)

y = Score total of question (item)

st b. Reliability te

Reliability test was used to measure the variables used completely free

of errors that produce consistent results. Reliability test results with the help

of SPSS will produce a Cronbach Alpha. If the results of the Cronbach Alpha

below 0.05 it is said that the data which has reliability (reliable) is relatively

low (Singgih, 2000, p. 290). Test the quality of this data using SPSS version

17.0.

r =

1

∑

Where: r = Reliability

article

=

Table 3.1

Scale of Instrument Reliability

Inter lity

∑

= Total variance p Total Variance

val Coefficient Level of Reliabi < 0.200 Very low

0.200 - 0.399 Low

0.400 - 0.599 Sufficient

0.600 - 0.799 High

0.800 - 1.00 Very High

Source : Sugiono (2005)

c. Normality test

Normality test performed to see whether the data was normally

distributed or not, because the data obtained directly from the first party via a

questionnaire.

There are four type of classic assumption test such as Normality test,

Autocorrelation, Heteroskesdastisity and multicollinearity.

1. Autocorrelation

Autocorrelation is aimed to test a linear regression model

whether there is a correlation between disturbance variables (et )

with the previous disturbance variable (et – 1). If there is no

correlation then the problem called autocorrelation. To detect

autocorrelation, we can see Durbin Watson test.

The formulation of Durbin Watson as follows :

Table 3.2

Durbin Watson Autocorrelation Measurement Durbin Watson Conclusion

Less than 1.10 Autocorrelation Available

1.10 – 1.54 Without conclusion

More than 2.90 Autocorrelation Available

Source : Muhammad Firdaus (2004,101)

2. Heteroskedasticity

Heteroskedasticity is aimed to test whether the regression

model of the residual variance inequality occurs to one observation

to another. Heteroskedasticity occurs when the variance of the

disturbance is not constant. But homoskedastic occurs when the

variance of the disturbance is constants. A good regression model

is homoskedastic.

3. Multicollinearity

Multicollinearity is aimed to test whether the regression

models found a correlation between independent variables or not.  In a good regression model, there is no correlation between

independent variables, because if this happens then these variables

are similar. This test is to avoid the habit in decision-making

process regarding the partial effect of each independent variable

toward dependent variable. To detect whether there is a

multicollinearity problem or not, it can be seen at the value of

tolerance and Variace Inflation Factor (VIF).

Regression analysis will be used to test hypotheses formulated for

this study. Two variables (seniority and ethical attitudes) were entered.

a. F- test

An F-test is any statistical test in which the test statistic has an

F-distribution if the null hypothesis is true. It is most often used when

comparing statistical models in order to identify the model that best

fits a given set of data (Lomax, 2007).

b. t-test

A t-test is any statistical hypothesis test in which the test

statistic follows a t distribution if the null hypothesis is true. It is most

commonly applied when the test statistic would follow a normal

distribution if the value of a scaling term in the test statistic were

known (Buonowikarto,2009, p. 27).

t test to know the significance of each independent variable .

t test = b – Se Sb

Sb = Se

√∑ Y² - ∑X ² n

Hypothesis:

H0 = there is no significant influence between independent variable

with dependent variable

H_ı = there is significant influence between independent variable and

dependent variable

Decision-making (based on probability):

If the probability> 0.05 hence H0 is accepted

If probability <0.05 hence H0 is rejected

F. Variable Used

There are two kinds of variable, which are independent variable and

dependent variable.

1. Independent variable

The independent variables used in this research are seniority

and ethical attitudes. Seniority can be measure from experience and

first indicators for ethical attitudes are good or bad attitudes related to

discipline, obedience, accounting trick, accounting scandals, bribery,

etc. The next indicators are age, genders, the ethics rules from IAI and

the last indicator is Islamic business ethics.

2. Dependent variable

The dependent variable in this research is accounting practitioners’

performance. It can be measure from good or bad performance of

accounting practitioners.

CHAPTER IV

ANALYSIS AND INTERPRETATION

A. Research Object

1. Location and Time of the Research

firms where some public accountants join together to conduct its business

as an ally or colleague.

Before the researcher spreading the real questionnaires to the

respondents, I conducted try out questionnaires to the 10 numbers of

respondents. These try out questionnaires are used to get the validity and

reliability. If the questionnaire pass the validity and reliability test, so the

questions can be used to real questionnaire spreading to 50 respondents.

The researcher was delivered the questionnaires to ten public accounting

firms. Five questionnaires are distributed for each firm.

The questionnaire was delivered on the April 2010 until June 2010

in the several public accounting firm as follows:

Table 4.1

List of Public accounting firm

No  Name of  Public Accounting Firm  Address 

1  KAP Drs. Heroe Pramono & Rekan  Jl. Prof. Dr. Soepomo,SH No. 3 Jaksel 12870  KAP Kanaka Puradiredja, 

Suhartono 

The Royal Palace, Jl. Prof. Dr. Soepomo No. 178A Block C29 , Jakarta 

12810 

2 

3  KAP Trisnowati & Mariati  Gedung Waskita Karya Lt.2 , Jl. MT. Haryono Kav. No. 10 Jakarta Timur  KAP Aryanto, Amir Jusuf & Mawar 

Pusat 

4  Gd. Plaza Abda Lt. 10 & 11, Jl. Jend Sudirman Kav 59, Jakarta 12190 

Ariobimo , sentral 3rd floor Jl, H.R Rasuda Said Blok X‐2 Kav 5  5  KAP EPPS Kreston 

Jl. Cempaka putih tengah no. 41B RT.  001/ 08, Cempaka putih timur  Jakarta pusat 

7  KAP Ellya Noorlisyati & Rekan 

8  KAP Soejatna , Mulyana & Rekan  Komplek Rukan Taman Meruya Blok M 78 Jakarta 11620  KAP  Abdul    Hamid  Chebba  & 

Kairun Nisa 

9  Jl. Ir. H.Juanda, ciputat 

10  KAP busroni dan Payatma  Jl. Jatipadang Pasar Minggu, Jakarta selatan 

2. Characteristic of Respondents

Questionnaire that has already distributed is 50 questionnaires to

all 50 respondents (auditors and accountants) in public accounting firm in

Jakarta.

Table 4.2

Characteristic of the respondents

Characteristic Information Total Percentage

1. gender Male 32 53.3

Female 28 46.7

2. age 20-29 years old 42 70.0

30-39 years old 8 13.3

Auditor 57 95.0

4. last position Junior 45 75.0

Senior 15 25.0

5. education D3 3 5.0

S1 54 90.0

S2 3 5.0

6. experience 1-5 years old 48 80.0

6-10 years old 2 3.3

More than 10 years old 10 16.7

The table 4.2 shows that the respondent genders from 60

questionnaires which be sample in this research are 28 (46.7%) female and

32 (53.3%) male respondents. The highest frequency of age is related to

the age group 20-29 where they are 42 (70%) of respondents and the

lowest frequency of age is related to the age groups >40 where they are 8

(13.3%). It means that all the respondents in period age from 20 to 40

years old. Most of the respondents are auditor, where 57 (95%) are auditor

and 3 (5%) are accountant. the frequency of junior level is 45 (75%) while

the total of senior is 15 (25%). The educational backgrounds of the

respondents are 3 respondents (5%) from D3 degree, 54 (90%)

respondents from S1 degree and 3 (5 %) respondents from S2 degree. The

highest frequency of experience is 1-5 years where 48 respondents (80%),

second is >10 years where 2 respondents (3.3%) and 6-10 years where 10

B. Analysis and Discussion 1. Descriptive Analysis

To see the significance of the data collected, the results of the

questionnaire is analyzed according to its value using the Likert scale.

This questionnaire is negative questions, means every question is

talking about bad ethics, bad moral and bad performance of the

accountants or auditors itself. The types of questions are related to bad

ethics, bad performance happen in Indonesia. As discussed in Chapter

3, the Likert scale used in this research has the format of seven levels /

points, which are:

• Strongly agree : value weight 7

• Agree : value weight 6

• Agree somewhat : value weight 5

• Undecided : value weight 4

• Disagree somewhat : value weight 3

• Disagree : value weight 2

• Strongly disagree : value weight 1

a. Seniority

The reponses of respondents on seniority variable are

divided into two questions, shown in table 4.3 below:

Table 4.3 Seniority

No Classification Likert Scale Mean Frequency

N= 60 Absolute Relatives 1 Violate the

rules

1.Strongly Agree 1 1.7

2. Agree - -

3. Agree Somewhat - -

4.Undecided 6.22 3 5.0

5. Disagree Somewhat 4 6.7

6. Disagree 23 38.3

7. Strongly Disagree 29 48.3

2 Financial statement manipulation

1.Strongly Agree 5 8.3

2. Agree 3 5.0

3. Agree Somewhat - -

4.Undecided 5.62 4 6.7

5. Disagree Somewhat 1 1.7

6. Disagree 23 38.3

7. Strongly Disagree 24 40.0

Total 5.92

Table 4.3 shows that most of the respondents strongly

disagree for the seniority problem. That means junior should have

good moral than their senior. Question number one shows 29

respondents strongly disagree, 23 respondents disagree, 4

respondents disagree somewhat, 3 respondents undecided, 1

respondent agree, and none of the respondents agree and agree

somewhat.

Question number two shows the financial statement

manipulation doing by senior. The result are 24 respondents

strongly disagree, 23 respondents disagree, 1 respondents disagree

somewhat, 4 respondents undecided, 3 respondent agree, 5

respondents strongly agree and none of the respondents agree

somewhat.

The total mean for the seniority variable is 5.92. Based on

the likert scale, it means that respondents mostly disagree with the

questions given. This means that senior auditor should have good

performance.

b. Ethical Attitudes

The reponses of respondents on ethical attitudes variable

No Classification Likert Scale Mean Frequency

N= 60 Absolute Relatives

1 Manipulation 1.Strongly Agree 1 1.7

2. Agree 9 15.0

3. Agree Somewhat 3 5.0

4.Undecided 5.8 1 1.7

5. Disagree Somewhat 5 8.3

6. Disagree 12 20.0

7. Strongly Disagree 27 54.0

2 Tax manipulation 1.Strongly Agree 5 8.3

2. Agree 14 23.3

3. Agree Somewhat 2 3.3

4.Undecided 4.7 3 5.0

5. Disagree Somewhat 3 5.0

6. Disagree 19 31.7

7. Strongly Disagree 14 23.3

3 Nepotism 1.Strongly Agree 5 8.3

2. Agree 6 10.0

3. Agree Somewhat 4 6.7

4.Undecided 5.2 2 3.3

5. Disagree Somewhat 13 21.7

6. Disagree 14 23.3

7. Strongly Disagree 16 26.7

4 Corruption 1.Strongly Agree 6 10.0

No Classification Likert Scale Mean Frequency

N= 60 Absolute Relatives

3. Agree Somewhat 2 3.3

4.Undecided 5.34 4 6.7

5. Disagree Somewhat 12 20.0

6. Disagree 21 35.0

7. Strongly Disagree 13 21.7

5 Reduce tax 1.Strongly Agree 11 18.3

2. Agree 3 5.0

3. Agree Somewhat 7 11.7

4.Undecided 4.94 2 3.3

5. Disagree Somewhat 3 5.0

6. Disagree 17 28.3

7. Strongly Disagree 17 28.3

6 Violate Islamic ethics

1.Strongly Agree 9 15.0

2. Agree 7 11.7

3. Agree Somewhat 1 1.7

4.Undecided 4.74 6 10.0

5. Disagree Somewhat 11 18.3

6. Disagree 18 30.0

7. Strongly Disagree 8 13.3

Total 5.12

about manipulation shows that 27 respondents strongly disagree, 12

respondents disagree, 5 respondents disagree somewhat, 1

respondents undecided, 3 respondents agree somewhat, 9 respondent

agree, and 1 respondents strongly agree.

Question number two about tax manipulation shows that 14

respondents strongly disagree, 19 respondents disagree, 3

respondents disagree somewhat, 3 respondents undecided, 2

respondents agree somewhat, 14 respondent agree, and 5

respondents strongly agree.

Question number three about nepotism shows that 16

respondents strongly disagree, 14 respondents disagree, 13

respondents disagree somewhat, 2 respondents undecided, 4

respondents agree somewhat, 6 respondent agree, and 5 respondents

strongly agree.

Question number four about corruption shows that 13

respondents strongly disagree, 21 respondents disagree, 12

respondents disagree somewhat, 4 respondents undecided, 2

respondents agree somewhat, 2 respondent agree, and 6 respondents

strongly agree.

Question number five about reduce tax shows that 17

respondents disagree somewhat, 2 respondents undecided, 7

respondents agree somewhat, 3 respondent agree, and 11

respondents strongly agree.

Question number six about violate Islamic ethics shows that

8 respondents strongly disagree, 18 respondents disagree, 11

respondents disagree somewhat, 6 respondents undecided, 1

respondents agree somewhat, 7 respondent agree, and 9 respondents

strongly agree.

The total mean for the ethical attitudes variable is 5.12.

Based on the likert scale, it means that respondents mostly disagree

with the ethical attitudes problem.

c. Accounting Practitioners Performance

The reponses of respondents on accounting practitioner

performance variable shown in table 4.5 below:

Table 4.5

No Classification Likert Scale Mean Frequency

N= 60 Absolute Relatives

1 Violation 1.Strongly Agree 5 8.3

2. Agree 3 5.0

No Classification Likert Scale Mean Frequency

N= 60 Absolute Relatives

5. Disagree Somewhat 4 6.7

6. Disagree 14 23.3

7. Strongly Disagree 29 48.3

2 Under pressure 1.Strongly Agree 3 5.0

2. Agree 9 15.0

3. Agree Somewhat 10 16.7

4.Undecided 4.4 3 5.0

5. Disagree Somewhat 8 13.3

6. Disagree 11 18.3

7. Strongly Disagree 16 26.7

Total 5.06

Source: primary data

Table 4.5 shows that most of the respondents strongly

disagree for the performance problem. Question number one about

performance of auditor violation shows that 29 respondents strongly

disagree, 14 respondents disagree, 4 respondents disagree somewhat,

3 respondents undecided, 2 respondents agree somewhat, 3

respondent agree, and 5 respondents strongly agree.

Question number two about performance of under pressure

auditor shows that 16 respondents strongly disagree, 11 respondents

undecided, 10 respondents agree somewhat, 9 respondent agree, and

3 respondents strongly agree.

The total mean for the accounting practitioners’ performance

variable is 5.06. Based on the likert scale, it means that respondents

mostly disagree somewhat with the questions given.

2. Quantitative Analysis est a. Validity T

Try out questionnaires are used to test validity and

reliability. In the validity test, the question is valid when it has

significant level lower than α (alpha). In this research, I used α = 0.05. All questions in seniority variable has significant level lower

than 0.05. It means all of the questions are valid. The results of

seniority are explained below:

Table 4.6

Try out questionnaire: Seniority Pearson Correlation

Validity Variable Significance Level

Sen1 0.013 0.749 Valid

Table 4.7 shows the result of ethical attitudes variable. In

this variable, the significant levels are below 0.05. It means that all

questions are valid.

Table 4.7

Try out questionnaire: ethical attitudes Variable Significance Level Pearson

Correlation

Validity

Eth_Att1 0.000 0.922 Valid

Eth_Att2 0.000 0.943 Valid

Eth_Att3  _0.000 0.929 Valid 

Eth_Att4  _0.001 0.890 Valid 

Eth_Att5  _0.003 0.832 Valid 

0.944

Eth_Att6 _0.000 Valid 

The last variable, the result of the significant level also

lower than 0.05. So, the accounting practitioners’ performance

Table 4.8

Try out questionnaire: accounting practitioners performance Variable Significance Level Pearson

Correlation

Validity

Acc_Perf1 0.000 0.895 Valid

Acc_Perf2 0.001 0.876 Valid

summarized

test score

By using significant level = 5% and N= 10, so r table is

0,632. If r of each variable is more than r table, it means that there is

a correlation between variables. The result of validity testing is

Table 4.9 Validity Test Result

Variable Item r r Description

(X1) X1.1 0.772 0.632 Valid

Seniority X1.2 0.950 0.632 Valid

(X2) X2.1 0.907 0.632 Valid

Ethical Attitudes

X2.2 0.932 0.632 Valid

X2.5 0.796 0.632 Valid

X2.6 0.933 0.632 Valid

(X3) X3.1 0.804 0.632 Valid

Accounting Practitioners Performance

X3.2 0.783 0.632 Valid

The result of validity testing for the questionnaire of study

as shown in the table above that all the variables are valid ,where r

test> r score.

b. Reliability Test

After doing validity test, next step is reliability test. The

researcher used SPSS 17.0 to test reliability test. All variable are

used to test the reliability. Table 4.9 shows the result of the

reliability test.

Table 4.10 Cronbach’s Alpha

Variable Cronbach’s Alpha Reliability

b. Ethical Attitudes 0.816 Reliable

c. Accounting Practitioners Performance

0.886 Reliable

Table 4.11 Reliability test

No Variable No. Question

Corrected Item-Total Correlation

Cronbach's Alpha if Item deleted

Reliability 0.553 0.770

1 Seniority (X1) 1 Sen_1 Reliable

0.916 0.744 Reliable  2 Sen_2

Ethical Attitudes

(X2) 1 Eth_Att1

2 0.869 0.748 Reliable 

2 Eth_Att2 0.478 0.763 Reliable 

3 Eth_Att3 0.799 0.750 Reliable 

No Variable No. Question

Corrected Item-Total Correlation

Cronbach's Alpha if Item deleted

Reliability

6 Eth_Att6 0.784 0.749 Reliable 

3

Accounting ractitioners

(Y1) 1 Acc_Perf1 0.763 0.750

Reliable  P

Performance

2 Acc_Perf2 0.196 0.780 Reliable 

Source: Primary data

the table above, the question used are all valid and reliable.

The Cr

c. Normality Test From

ormality test was conducted in order to determine the N

distribution of data in the variables that will be used in research. In

this research, the normality of data is determined by the normal

P-P plot. Normal P-P- P-P plot on the picture or the line of normality

were used to test data or indicate whether the differences in

respondents in the research data to the data which is very different

among the others. Normal data will follow the line of normality. In

the figure, it can be seen that the data follow the line of normality

so that data is considered normal. The picture show that the

distribution of variable data points spread around the diagonal line

of research and dissemination of data points the direction to follow

the diagonal line. Thus, data on the whole variable can be said to

have normal distribution. Acctually, the hypothesis test in

normality test inversely related to t test and f test. In my research,

seniority accept H0 and reject H1. But ethical attitudes reject H0

d. Classic Assumption Test 1. Autocorrelation

Table 4.12

Model Summaryb

Adjusted R Std. Error of the

Model R R Square Square Estimate Durbin-Watson

1 .695a .483 .464 2.338 1.631

b. Dependent Variable: performance

To know the test whether there is autocorrelation or not,

can done by using the certainty that is in the table 3.2 Durbin

Watson. The result of Durbin Watson test is 1.631 with the

standard of significant 0.05, hence according to the table said

before, there is no conclusion in this multiple linier regression

model. To fine the upper and lower bound in the Durbin-Watson

test (autocorrelation test) we must have α, n, k, and Durbin-Watson Significance Table.

α= significance level n = number of sample

k = regressors / dependent variables

In this research, n= 60, k= 3, α = 0.05

The results from Durbin Watson table are the upper bound

(dU) is 1.63 and lower bound (dL) is 1.46. Since the Durbin

Watson formula is ( 4-d ) > dU, where (4 – 1.459 ) > 1.63, it can

2. Multicollinearity Test Table 4.13

Coefficientsa

Collinearity Statistics

Model Tolerance VIF

1(Constant)

seniority .504 1.983

ethical attitudes .504 1.983

a. Dependent Variable: performance

If VIF value less than 10, it means free from

multicollinearity indication. The VIF value in seniority is 1.983

and an ethical attitude is 1.983. It means VIF less than 10. So, my

data is free from multicollinearity indication.

                   

 

The scatterplot above shows that the data are scattered and

the distribution of data are not in a clear pattern. It can be

concluded that there is no Heteroskesdastisity on multiple

regression models. So that proper regression model of factors

affecting seniority and ethical attitudes of accounting practitioners

performance.

²) 1. Coefficient determination (R

Table 4.14 Coefficient determination

Model Summaryb

Adjusted R Std. Error of the

Model R R Square Square Estimate

1 .695a .483 .464 2.338

a. Predictors: (Constant), ethical attitudes, seniority b. Dependent Variable: performance

R-value of 0.695 indicates that the correlation or

relationship between performance and two others independent

variable is strong.

R square value or the coefficient of determination is 0.483

(come from 0.695 x 0.695). Because of my research uses two

independent variables, then the researcher use the R square. It

means that 48.3% of performance variation can be explained by the

variation of the two independent variables while the rest (100% -

48.3% = 51.7%) explained by other causes.

Standard error of the estimate (SEE) is 2.338. The smaller

of the Standard error of the estimate (SEE) will make the

appropriate regression model in predicting the dependent variable.

Table 4.15

Coefficientsa

Unstandardized Coefficients

According to the Table 4.14 above has got the similarities of regression as follows:

Y = 2.887 + 1.084 X1 – 0.082 X2+ ε Where:

Y = accounting practitioners performance X1 = seniority

X2 = ethical attitudes

ε = error

As shown with the equation above, if the value of seniority is

added by a value of 1, performance will increase by 1.084. If the

ethical attitudes are added by a value of 1, performance will decrease

by 0.082.

The error variance can be calculated with:

Model B Std. Error

1(Constant) 2.887 .652

seniority 1.084 .171

ethical attitudes -.082 .042

The error variance for accounting practitioners performance

can be calculated as:

ε acc_perf = √ (1 - 0.483) = 0.517

a . Accounting practitioners performance and Seniority

The first regression analysis was carried out to determine

the relationship between seniority and accounting practitioners

performance. The regression outputs are presented in the table 4.16

and table 4.17.

The output for seniority is major criteria to know the

performance of accounting practitioners. From the table below, the

Durbin Watson value is 1.456. The result of Durbin Watson also

indicates that there is no conclusion.

Table 4.16

Model Summaryb

Model R R Square

Adjusted R Std. Error of the

Square Estimate Durbin-Watson

.655a

1 .429 .417 2.407 1.456

a. Predictors: (Constant), seniority b. Dependent Variable: performance

Table 4.17

Coefficientsa

Standardized Unstandardized Coefficients Coefficients

Model B Std. Error Beta T Sig.

1 (Constant) 2.714 .647 4.192 .000

seniority .795 .132 .655 6.005 .000

a. Dependent Variable: performance

b. Accounting practitioners performance and Ethical Attitudes

The second regression analysis was carried out to determine the

relationship between ethical attitudes and accounting practitioners

performance. The regression outputs are presented in the table 4.18 and

table 4.19.

The output for ethical attitudes is major criteria to know the

performance of accounting practitioners. From the table below, the Durbin

Watson value is 1.315. The result of Durbin Watson also indicates that

there is no conclusion.

Table 4.18

Model Summaryb

Model R R Square

Adjusted R Std. Error of the

Square Estimate Durbin-Watson

.508a

1 .258 .243 2.743 1.315

Table 4.19

Coefficientsa

Standardized Unstandardized Coefficients Coefficients

Model B Std. Error Beta t Sig.

1 (Constant) 3.023 .830 3.643 .001

ethical attitudes .173 .042 .508 4.087 .000

a. Dependent Variable: performance

3. F test ( Simultaneous test )

The values below are the output of f test calculation using the SPSS 17.0.

F-test / ANOVA Table 4.20

ANOVAb

Model Sum of Squares df Mean Square F Sig.

1 Regression 290.649 2 145.324 26.577 .000a

Residual 311.684 57 5.468

Total 602.333 59

a. Predictors: (Constant), ethical attitudes, seniority b. Dependent Variable: performance

The ANOVA test shows that the F test value is 26.577 with a level

of significance of 0.000. Because the significance value is 0.000 < 0.05, it

can be concluded that seniority (X1), and ethical attitudes (X2) in the same

condition simultaneously influences the accounting practitioners

Furthermore, by comparing F test with F table with standard error

5% and degree of freedom (df) 1 = 2 (3-1) and (df) 2 = 57 (60-3) therefore

obtaining a F table of 3.16. The F test is 26.577 > F table 3.16. Thus, the

conclusion of the variables; Seniority (X1) and ethical attitudes (X2)

simultaneously have been influence towards accounting practitioners

performance (Y2).

t) 4. t test (partial tes

Table 4.21

Coefficientsa

Standardized Unstandardized Coefficients Coefficients

Model B Std. Error Beta t Sig.

1(Constant) 2.887 .652 4.429 .000

seniority 1.084 .171 .852 6.351 .000

ethical attitudes -.082 .042 -.259 -1.930 .059

a. Dependent Variable: performance

The significance value of seniority based on t test above is 0.000

which lower than the significance level (

α

) 0.05. This means that seniority has significant influence to the accounting practitioners’ performance. But

for the ethical attitudes, the significant value is 0.059, bigger than the

accounting practitioners performance. It can be concluded that from

seniority point of view, there is enough evidence. But, for ethical attitudes

point of view, there is not enough evidence.

If t test > t table it means that the independent variable has

significant influence towards the dependent variable. If t test < t table it

means that the independent variable has no significant influence towards

the dependent variable. The standard level of significance used is 5% or (α) = 0.05.

Both variables are deemed significant with by the significant value.

With a standard error of 5% and a degree of freedom (df) = n – k. where n

is total sample and k is total of independent and dependent variables. The

result is degree of freedom (df) = 60 – 3 = 57, the result of T table is

2.00247. The value of t test for seniority is 6.351 and the value for ethical

attitudes is – 1.930. The value for seniority is larger than the t table but the

value for ethical attitudes is lower than t table. Therefore, it can be

concluded that seniority (X1) has significant value toward accounting

practitioners performance (Y1) but ethical attitudes (X2) has no significant

G. Interpretation

There are several interpretations that can be summarized based on the

analysis. First, Seniority and ethical attitudes have a mean Likert score of 5.92

and 5.12 based on descriptive statistics. My questionnaires are negative questions

regarding to bad performance. Most of the respondents are disagree with bad

ethics and bad performance that happen in Indonesian case. Most of accounting

practitioners disagree with bad ethics, but it still happen in reality.

The value of the F test is 18.382 with a significance level of 0.000. Since

the probability (0.000) is much smaller than the significance level (

α

) 0.05, then the regression model can be used to predict performance. Both of seniority and

ethical attitudes affect the accounting practitioners’ performance.

The significance value based on t test value of seniority is 0.000 which

lower than the significance level (

α

) 0.05. This means that seniority have significant influence to the accounting practitioners performance. The significant

value of ethical attitudes is 0.366 > (α) 0.05. As seen in its significance value, B score, and t test score, it cannot be considered as a significant variable towards

accounting practitioners performance.

It can be concluded that the factor influence the performance of

accounting practitioners itself are influenced significantly by seniority.

CHAPTER V

CONCLUSION AND IMPLICATIONS

A. Conclusion

There are several conclusions that can be derived from the research results

above. To validate this research those results must reflect the research question

and fulfill the research goals.

1. As discussed above, seniority has significant influence to accounting practitioners performance, but ethical attitudes do not have significant

influence to accounting practitioners performance.

2. Both of seniority and ethical attitudes influence the accounting practitioners’ performance. The significance value is 0.000 < 0.05, it can be concluded that

seniority (X1), and ethical attitudes (X2) in the same condition simultaneously

influences the accounting practitioners performance (Y2).

B. Research Implications

According to the research that the researcher has done this research is

always be limitation and weaknesses. The limitation in this research is the

methodology that the researcher used is just a simple methodology. The weakness

in this research is the sample of this research only 60 respondent and the senior

According to the research performance of Accounting Practitioners

performance in public accounting firm in Jakarta is positively influence by

seniority but negatively influence by ethical attitudes. Therefore Islamic business

ethics course is important to learn start from education so that when entering the

working environment, accounting practitioners can practice the Islamic business

ethics. The things that violate such manipulation, corruption, collusion and tax

evasion will not happen if every individual has an understanding of Islamic ethics.

C. Suggestion

The ethical attitudes of accounting practitioners in Indonesia still bad.

There a

ere are several suggestions for the future research. First, future re many violations doing by accounting practitioners whether it is from

senior or junior employee. The public accounting firm must seriously make the

strict rules for the employees who are violating the rules so that the violation will

be minimize.

Th

researchers can add the variables both dependent and independent variables.

Second, future researchers can improve the information about seniority and ethics.

Third, while the researcher has attempted to draw a nationally representative

sample, I had slightly fewer than 200 observations for this research. Even though

this compares favorably with previous investigation of this kind, I believe future

9. For all friends that I can’t explain one by one. Thanks for all support and prayer.

Finally, the researcher realized that in the implementation and the writing of this thesis still far from perfection. Therefore, the writer really hoped for any criticism and suggestion from various sides so that it can give more benefit on the next day.

ABSTRAK  

 

Performa dari praktisi akuntansi seperti akuntan dan auditor saat ini dipengaruhi oleh berbagai faktor. Diantaranya pengaruh senioritas dan sikap etika dari praktisi akuntansi itu sendiri. Senioritas sendiri dipengaruhi oleh pengalaman dan pengetahuan. Sedangkan perilaku etika praktisi akuntansi di Indonesia dipengaruhi oleh kode etik yang berlaku di Indonesia yaitu kode etik Ikatan Akuntansi Indonesia (IAI). Etika bisnis islam juga sangat mempengaruhi etika dari akuntan dan auditor di Indonesia sebagai negara mayoritas islam. Objek dan tujuan dari penelitian ini adalah mengukur sejauh mana senioritas dan sikap etika mempengaruhi performa dari praktisi akuntansi.

Hasil yang diperoleh menunjukan bahwa senioritas mempengaruhi performa praktisi akuntansi, sedangkan sikap etika tidak mempengaruhi performa praktisi akuntansi secara significant. Sampel yang digunakan dalam penelitian ini adalah sebanyak 60 respondent dengan mengunakan metode sampel berdasarkan kemudahan.

Kata kunci : senioritas, sikap etika, performa praktisi akuntansi, kode etik IAI, etika bisnis islam

ABSTRACT

Performance of accounting practitioners such as accountants and auditors currently affected by various factors. Among the influence of seniority and ethical attitudes of accounting practitioners themselves. Seniority itself influenced by the experience and knowledge. While the ethical behavior of accounting practitioners in Indonesia affected by the code of ethics that prevail in Indonesia that is the Indonesian Institute of Accountant (IAI) code of ethics. Islamic business ethics also influence the ethics of accountants and auditors in Indonesia as the country with Islamic majority.The object and purpose of this research was to measure the extent to which seniority and ethical attitudes influences the accounting practitioners performance.

The results obtained show that seniority affects the performance of accounting practitioners, while ethical behavior does not affect significantly. The sample used in this research are as many as 60 respondents using a method based on convenience sampling.

Keywords: seniority, ethical attitudes,accounting practitioners performance, IAI code of ethics, Islamic business ethics.

CONTENT

Acknowledgment i

Abstrak iii

Abstract iv

Table of Content v List of Table viii

List of Figure x

List of Formulation xi

CHAPTER I INTRODUCTION A. Background ……… 1

B. Research Problem ……… 7

C. Research Objective ……… 8

D. Research Benefits ……… 8

CHAPTER II LITERATURE REVIEW A. Seniority ……… 9

B. Ethical Attitudes ……… 10

C. IAI code of Ethics ……… 11

D. The Islamic Ethical System ……… 15

E. Previous Research ……… 30

F. Research Framework ……… 32

CHAPTER III METHODOLOGY

A. Research Scope ……… 34

B. Sampling Method ……… 34

C. Data Collection Method ……… 35

D. Research Design .……… 36

D. Data Analysis Techniques ……… 37

E. Variable used ……… 45

CHAPTER IV ANALYSIS AND DISCUSSION A. Research Object ……….. 46

1. Location and Time of Research ……… 46

2. Characteristic of Respondent..……… 47

B. Analysis And Discussion 1. Descriptive Analysis ……….. 49

2. Quantitative Analysis ……….. 58

A. Validity Test ………. 58

Reliability Test ………. 61

B. Normality Test……..……… 63

C. Classic Assumption Test ……… 65

1. Autocorrelation……… 65

2. Multikolinearity………... 66

3. Heterokedasticity……… 67

D. Multiple Linier Regression ……… .. 68

1. Coefficient determination (R²) ………. 68

3. F test ……… 72

4. t test ……… 73

E. Interpretation ………. 75

CHAPTER V CONCLUSION AND IMPLICATION

A. Conclusion……….. 76

B. Implication ………. 76

C. Suggestion ………. 77

REFERENCES

APPENDIX I

APPENDIX II