An empirical investigation into the relationship of organizational ethical culture to ethical decision-making by accounting/finance professionals in the insurance industry in the U.S.A (Connecticut, Pennsylvania, Colorado, North Carolina, Virginia)

This research examined the relationship between organizational ethical culture and ethical decision-making of accounting/finance professionals working in the insurance industry in U.S.A. Ajzen's (1991) theory of planned behavior was used as a model for the study. Bad debt write-off and insider trading ethical vignettes were used to operationalize ethical decision-making. The standard measures of attitude toward behavior, subjective norm, perceived behavioral control, and behavioral intention as constructs in the theory of planned behavior were used (Gibson and Frakes, 1997). Organizational ethical culture was measured using the valid and reliable Organizational Ethical Culture Questionnaire (Key, 1999; Trevino et al., 1998).; One hundred accounting/finance professionals from five organizations in the insurance industry across the states of Connecticut, Pennsylvania, Colorado, North Carolina, and Virginia responded to the accounting ethics survey. The results indicate that there is a significant positive relationship between organizational ethical culture and ethical decision-making in the bad debt write-off, as well as insider trading scenarios. The findings also support Ajzen's (1991) theory of planned behavior (TPB), which provides a significant explanation of ethical behavior of accounting/finance professionals in the insurance industry in U.S.A. Attitude toward behavior, subjective norm, and perceived behavioral control together showed a significant positive relationship to bad debt write-off, as well as insider-trading ethical decision-making.