, Volume 9, Issue 2, pp 115-126

The effectiveness of a complaint-based ethics enforcement system: Evidence from the accounting profession

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Abstract

Many professions, in order to enforce their ethics codes, rely on a complaint-based system, whereby persons who observe or discover ethics violations may file a complaint with an authoritative body. The authors assume that this type of system may encourage ethical behavior when practitioners believe that a punishment is likely to result from a failure to adhere to the rules. This perceived likelihood of punishment has three components: detection risk, reporting risk, and sanction risk. A survey of potential violation witnesses related to the accounting profession revealed that the profession's complaint-based enforcement system may not provide practitioners with the necessary disincentive to refrain from code violations.

S. Douglas Beets is an Assistant Professor of Accounting at Wake Forest University. He is also a Certified Public Accountant, licensed in the state of Tennessee. Dr. Beets served on the accounting staffs of Armco Steel Corporation, Eastman Kodak Company, and Russell and Purkey, CPAs. Recently, he was selected as a faculty intern for Arthur Andersen and Co.
Larry N. Killough is the Peat Marwick Professor of Accounting at Virginia Polytechnic Institute and State University. Dr. Killough is a Certified Public Accountant and served on the staff of Arthur Young and Company. His articles have appeared in numerous academic and practitioner journals.