Ethical Perceptions on Earnings Manipulation in Turkey : An Exploration of Differences in Preparers and Users’ Perspectives

This study examines the ethical perception differences concerning the three types of earnings manipulations; which are income smoothing, earnings management and big bath accounting, between users and preparers' perspectives of financial information in Turkey. A structured questionnaire composed of seven scenarios was used to elicit responses from users; based on 76 financial analysts and 6 portfolio managers' responses, and preparers of financial statements; using responses from 56 independent and 56 dependent accountants. Results reveal that there are significant differences between the ethical perceptions of users and preparers related to some types of earnings manipulations. Additionally, the most unethical tool of earnings manipulations is fraudulent accounting, then manipulation through accounting changes and manipulation through operational changes. This study provides insight on the current and potential direction of earnings manipulation in Turkey and help regularity bodies in their efforts to tighten and improve reporting standards and regulations