An empirical investigation into the influence of ethical accounting on financial reporting quality

The credibility of financial information is fundamentally influenced by the ethical conduct of accounting professionals and the standards guiding financial reporting practices. This study empirically examines the impact of ethical accounting practices on the reliability and transparency of financial reporting within organizations. Using a structured survey administered to 120 accounting professionals, including accountants, auditors, and financial managers, the research explores the relationship between ethical behavior, adherence to accounting standards, and the perceived quality of financial information. The findings reveal that organizations with strong ethical frameworks and regular ethics training demonstrate higher levels of financial reporting reliability and transparency. A significant majority of respondents (68%) agreed that ethical awareness and compliance reduce the likelihood of misstatements and manipulation in financial reports. However, challenges such as pressure from management, lack of ethical oversight, and weak enforcement mechanisms were identified as key barriers to maintaining ethical standards. The study concludes that ethical accounting practices play a critical role in enhancing the credibility of financial information, thereby strengthening stakeholder confidence and promoting corporate accountability. It recommends integrating ethics-focused training, stringent internal controls, and transparent corporate governance policies to ensure consistent ethical compliance in financial reporting. 92.5% of respondents are aware of professional ethical standards. 85–90% agree that ethics enhances reliability and transparency in financial reporting. The adjusted R² value of 0.62 shows that 62% of the variation in financial reporting quality can be explained by ethical practices, confirming the acceptance of the alternative hypotheses (H₁₁ and H₁₂). Regression analysis confirms a strong positive impact of ethics on financial reporting quality (p < 0.01).