Islamic Business Ethics Solutions to the Ethical Dilemmas of the Management Accountant Profession

Management accountants were bound by the profit motive of the company. Accounting regulations still have many loopholes for creative interpretation. The objective of this conceptual article is to criticize the ethics of management accountants from several literatures, the phenomena of accounting scandals, and ethical dilemmas. Professional ethics are often ignored because strong fundamentals do not support them. Earnings management is a dilemma problem of an accountant's ethics. Deontologically, this behavior is wrong, but teleologically, the consequences are positive for the sustainability and future of the company and human resources. This article concludes to solve the dilemma problem based on business ethics in Islam where the highest position is the religious rule. Accountants must be able to implement the five axioms, namely unity, equilibrium, free will, responsibility, and benevolence, by holding the principles of ridho and ta'awun in carrying out their profession.


Introduction
What do people seek in life?Pursuing the hereafter and the world will follow or vice versa.This context if put into the world of the management accountant profession will cause a dilemma problem.Accountants are faced with the dilemma of working ethically solely for the pleasure of God or pursuing company profits at all costs to gain satisfaction and power.
Money is the root of all evil (Kurniawan & Anjarwati, 2020; Tang et al., 2008;Tang & Chiu, 2003; Tang & Sutarso, 2013; Tang et al., 2005).The materialistic nature of humans is often one of the reasons for the righteousness of an unethical act.This conceptual article aims to criticize the ethics of the management accounting profession, which over the past few years has often led to financial scandals and dilemmas.Furthermore, this article will propose to introduce and apply Islamic ethics in solving ethical dilemmas problems to realize the enforcement of professional ethics of management accountants.
Several cases of earnings manipulation involving management accountants often occur in several companies, including well-known companies.The responsibility of management accountants to the public through financial reports must fulfill the principles of accountability, transparency, responsibility, independence, and fairness.Toshiba, a very powerful Japanese company, in 2015 was caught in a scandal involving management accountants for earnings management behavior.The company's management accountants allegedly committed fraud worth 1.22 billion US dollars.This action was an attempt to achieve profit targets because since 2008 Toshiba has recorded financial difficulties, especially during the global crisis (www.integrity-indonesia.com).Another scandal that shocked the public was PT Garuda Indonesia, Tbk, which embellished its 2018 financial statements by reporting a significant profit of 11.3 billion.This is odd because in the third quarter of 2018, the company suffered a loss of 1.66 Trillion.Finally, it was revealed that Garuda's management accountant recognized revenue from one of its partners even though it was still receivable.A similar condition also occurred at PT Jiwasraya Insurance.The top-level management of the insurance company manipulated its 2017 financial statements.Management is considered less careful in managing the company and there are allegations that manipulation has occurred since 2006.Management accountants reported false profits through accounting engineering.These scandals are evidence that the morale of management accountants in Indonesia is still low (www.integrity-indonesia.com).
The motive of management accountants is always looking for worldly benefits alone so that they forget their love for God even though God is a very perfect lawmaker for the entire cycle of human life.Humans were created to live their role, namely worship by doing as much good deeds as possible.Islam itself has discussed the issue of ethical dilemmas clearly and comprehensively (Muhammad et al., 2020).Ethics in Islam are good principles and values based on Islamic sources, namely the Al-Quran and Hadith.These two guidelines become ethical standards that are presented as a solution to reveal what is right and wrong.Islam has set limits on what can (halal) and cannot (haram) be done as our standard of behavior (Puspitasari, 2019).
The nature of a Muslim is to always comply with all the rules that have been set in the Al-Quran and Hadith.Accountants as a profession that must always abide by the rules and code of ethics of their profession seem to forget that the highest rules in this mortal world are religious rules.All religions must teach goodness.One form of people's obedience to their religion is to return everything following Islamic law.The number of accounting scandals that have occurred recently is due to a lack of understanding of fundamental Islamic law.The main focus of management accountants is still limited to profit because of the undeniable nature of materialism in humans.Management accountants still often favor profit and money over loving their God.In Islam, love is the abundance of God's affection for all his creatures with all perfection (Indriasari, 2015;Mulawarman, 2018;Sylvia, 2014).Personal value theory explains that excessive materialism and love of money will be more likely to justify unethical choices (Flurry & Swimberghe, 2016).
There have been many studies related to the love of money.However, its relationship with ethical behavior provides a different perspective.Lu et al. (2010) found that Indonesians who have more materialism tend to be high in ethically questionable behavior.Other research suggests that the love of money is not the main determinant of unethical behavior (Flurry & Swimberghe, 2016).The love of money will only influence actions passively.Unethical behavior is most likely to occur when there are drivers and one's involvement in ethical dilemmas.
The topic of earnings management has also been widely raised in research.However, there are differences in the ethical views of some parties who are directly or indirectly involved in this behavior.
Let's say that earnings management is a game where there are winning and losing parties.The winning party will benefit so that they view the game as fair and ethical.Meanwhile, the audience of the game can approve or reject depending on how moral they are.Earnings management practices place management accountants in the gray zone between regulatory compliance and falling into the black zone of the financial reporting process so as to mislead users.Jooste (2011) states that the use of inappropriate information allows misinterpretation, manipulation, and intentionality in crime so that earnings management practices can violate ethics and immoral.Thus, earnings management can be an unethical or ethical act (Elias, 2002(Elias, , 2004 Ethics is a normative field because it regulates what to do or not do.Professional ethics only limits the terms of reference of a company.The most important point is how the rules should be that can regulate and guide management accountants in carrying out their profession.In Islam, the Quran as a guide describes the concepts of goodness, truth, equality, balance and justice, truth and right, known and approved, and piety (Beekun, 1996).Based on this perfection, professional ethics should be compiled based on religious law, namely the Al-Quran and Hadith.The weakness of human morals is basically because he has not upheld the sharia and ethical principles of his religion.Islamic business ethics will make management accountants more sensitive to their professional code of ethics so that they can help in dilemmatic conditions and various problems that may not be resolved by relying on competence alone.Religion is not only how to solve problems but also how to build strength so that we truly believe in God's help (Rahmat, 2017).Axioms in Islamic ethics provide strength for management accountants to always obey the rules and act according to the correct principles, namely seeking the pleasure of God and taawun (convenience).Tawhid1 , justice, freedom, responsibility, and virtue are the pillars that management accountants must always hold as a fundamental basis in carrying out their profession.When religion is prioritized by relying on God in being guided by the guidance taught in the profession, a person's tendency to act unethically will decrease because in themselves there is a fear of being judged before God in the future.Islam provides freedom but also holds the concept that a business must be fair and responsible for the common good.Companies must carry out their operations fairly, correctly, and not oppress one party.Islam is full of love and peace.Islam views love as the basis of brotherhood between people.The real and true love belongs only to God, the Most Perfect and the Owner of Love.If everything is done solely with the intention of worship and according to the guidance taught by God, a person will submit to all of God's commands and always fear every bad deed (Efferin, 2015;Mulia, 2014;Puspitasari, 2019;Sari, 2016).
Based on the phenomenon of accounting scandals, previous research, and cases of ethical dilemmas in the management accounting profession, this article will open a new perspective by linking religion, especially Islam.This article will consist of five main parts, namely, an introduction related to the phenomenon of the moral crisis of the management accountant profession, a literature review, methodology, a discussion consisting of four sub-sections, and ends with conclusions and proposals in response to future challenges.

Literature Review
Earnings management is defined in several diverse meanings.The former Chairman of the SEC likened earnings management to "accounting hocus-pocus" where management accountants try to exploit flexibility rules in the financial reporting process to obtain expected profits (Levitt Jr, 1998).Some other studies define earnings management as arising from managers' considerations in smoothing transactions to mislead stakeholders and increase or decrease earnings reporting (Fischer & Rosenzweig, 1995;Healy, 1985).Fiolleau and Kaplan (2017) examined that management accountants tend to form business schemes and use the term aggressive accounting practices.The use of the term implicitly covers up impropriety so that the ethics of earnings management become blurred because it focuses more on economic emphasis than ethical aspects.In essence, the meaning of earnings management is an intention or consequence to meet expectations that could be harmful due to the failure of accrual earnings estimates to increase earnings upwards.
There are two main drivers for earnings management, namely external and internal factors (Elias, 2002).External factors are when management accountants try to meet the expectations of financial analysts who may be jeopardized by the failure of accrual earnings estimates to increase earnings upwards.Internal factors, namely managerial incentives such as bonus plans so that management accountants try to get these incentives through earnings management.The important point is how stakeholders and the public assess the company's earnings management behavior.The worst consequence is that stakeholders consider the action unethical for whatever reason so that all parts of the company including management accountants will lose reputation and trust.Some students as research subjects in the scenario of Kaplan (2001), act as users of financial statements and categorize the company's managerial actions into actions that benefit the company or only benefit individual management accountants themselves.This means that shareholders will judge earnings management actions as ethical behavior when they benefit the company as a whole.Vladu et al. (2017) argue from a positive point of view of earnings management that if management accountants engage in earnings management practices, it means that their attitude is not too hard on ethics.In utilitarian ethics, every action does not require moral consideration as long as everything is permitted and according to certain considerations.In line with this thought, Parfet (2000) stated that earnings management is not always a negative phenomenon and if the behavior is good then it should not be prohibited and said to be manipulative.If the results are logical and necessary and by the rules, the behavior becomes permissible and ethical.Earnings management can be said to be ethical when management accountants achieve consistent financial performance and acceptable decision-making.However, earnings management can be bad when managers make fictitious transactions and estimates beyond reasonable limits.Merchant (1990) distinguishes earnings manipulation into operating manipulation related to changes in operating decisions that affect cash flow and net income, and accounting manipulation that uses the flexibility of accounting standards in playing earnings figures.Elias (2002) shows that shareholders consider both operating and accounting manipulation behavior to be unethical.However, managers view operating manipulation as more ethical than accounting manipulation.In general, all respondent groups rated accounting manipulation as an ethical violation (Elias, 2002).However, the assessment of the violation is spread between weak to strong.Accounting students rated earnings management more leniently than experienced practitioners.Indeed, the location of the assessment of ethical earnings management or not is deep in one's heart and beliefs.Management accountants as gatekeepers of corporate reputation have been criticized for failing to warn of unethical management behavior and even engaging in such behavior themselves.The flexibility of financial reporting becomes a justification.Excessively high profit targets pressure management accountants so that they justify all means including unethical actions (Duncan, 2001).Islam itself views earnings management as not by Sharia principles because it uses certain techniques so that the financial statements presented can be used to achieve the interests of achieving profit targets (Arisandy, 2020).

Methodology
This study is qualitative research that is developed by literature review and conceptual thinking approach.The source of literature is collected from previous studies in journals and books from the year 1990 until 2020 and also the Quran and Hadith to get broad data and not bound by time (Bungin, 2007).This study is also based on the observation of the phenomena that are happening and often encountered by researchers in real practice.Furthermore, based on the data and empirical phenomena, a proposed concept is built to uphold the professional ethics of management accountants.The concept is built from the point of view of deontological and teleological ethics and then explains the code of ethics of the management accountant profession incorporated in the code of ethics of the Indonesian Accountants Association (IAI).The existing theories and rules are used to examine the ethical dilemmas that occur in the management accounting profession.Finally, a proposal is formed that the axioms and principles of Islamic business ethics are the foundation for upholding the ethics of the management accountant profession.

Deontological and Teleological Ethical Perspectives
Deontological ethics emphasizes on judging a behavior as right or wrong, while teleological ethics focuses on the morality of a particular behavior and the impact of that behavior (McPhail & Walters, 2009).Based on the deontological ethical view, the behavior of management accountants in manipulating earnings is considered morally wrong because that type of behavior contradicts the categorical imperative.Regardless of its positive consequences and allowed in accounting standards, the act of earnings management is wrong because the behavior is not expected to be done in a universally applicable law (Colimah et al., 2019;Leitsch, 2006;Rahmawati & Riyanto, 2017).
Ethics in teleologically, the right or wrong of earnings management refers to its consequences.If earnings management harms stakeholders and the public, it is considered an unethical act.When earnings management is carried out due to liquidity problems and to save the company and its employees to survive, it is a permissible action according to teleological ethics.This deontological and teleological ethical concept causes dilemmatic problems for management accountants.Management accountants are faced with a difficult choice to save the company or stick to moral principles.Management accountants are indeed given flexibility in financial reporting but that freedom certainly has its limits.If without limits, it means that humans compete with God Almighty (Puspitasari, 2019).Even though when making decisions, management accountants feel that they are correct and appropriate, it does not mean that for others, the action is justified.As with accounting cases that have occurred, disclosure of earnings manipulation does not occur right away, it could be revealed in the next year or several years.
The righteousness of an action is a subjective one.Truth belongs only to God.Therefore, when management accountants are faced with a dilemma, they must return to their religious beliefs (Tang, 2010(Tang, , 2016;;Wong, 2008).Religion is the highest rule in the world.Religion has regulated all things on this earth.So, regardless of the purpose of an earnings management action whether for financial growth or other purposes such as justice, management accountants must return to religious law that teaches to do good solely for the sake of God and leave disbelief, wickedness, and disobedience.Islam teaches us to love faith and put it in the heart (Surat Al-Hujurat: 7).The form of faith is to carry out actions and professions according to sharia according to the teachings of the Prophet as an example of mankind, not based on human desires.

Code of Ethics for Management Accountants
The management accountant profession is one of the compartments in the Indonesian Accountants Association (IAI) so the professional code of ethics refers to the code of ethics from IAI.The IAI code of ethics is the result of joint coordination with the Indonesian Institute of Public Accountants (IAPI) and the Indonesian Institute of Management Accountants (IAMI).This code of ethics was formed in the context of developing the accounting profession in Indonesia to create synergy between all accounting professional organizations and bring about compliance in every action of the accounting profession (IAI, 2016).
The IAI code of ethics is not a barrier to management accountants in fulfilling their responsibilities in each company, but as a limiting condition that might reduce compliance with ethical principles.Accountants must create "moral accounting" in every action in the eyes of the law (Franklin, 1999;Leitsch, 2006;Ntayi et al., 2006).In addition, management accountants must also follow the Good Corporate Governance mechanism established by the company.Management accountants must comply with the five basic ethical principles for accountants, namely integrity, objectivity, competence, confidentiality, and professional behavior (IAI, 2020).Management accountants must maintain their integrity, be straightforward and honest in carrying out fair company management for all company stakeholders.The management accountant profession must be objective, meaning that all actions and all information reporting must be relevant and not tied to certain parties but purely for the benefit of the company.Management accountants must always improve their competence, expertise, knowledge, and carry out professional duties following applicable accounting standards.Management accountants should also not discuss company confidentiality issues with unauthorized parties except in front of the law.Management accountants must always maintain every professional behavior according to applicable rules and laws.
The issue of the code of ethics for management accountants who follow the code of ethics of the IAI raises dilemmatic problems against threats that may arise in the wider business world.Management accountants must be able to determine the appropriate accounting treatment for each business transaction and there are demands from upper management that at all cost management accountants must be able to solve these problems (Azhar et al., 2019;Duncan, 2001;Mulawarman & Ludigdo, 2010;Rahmawati & Riyanto, 2017;Reinstein et al., 2006;Sisodia, 2009).Finally, pressured conditions and irrational targets lead management accountants to take unethical actions such as manipulating financial information.In fact, the IAI code of ethics has not been able to solve this problem in detail.In one part of the IAI code of ethics, explains that in an emergency condition, if threats from various parties to management accountants cannot be avoided, eliminated, and no solution can be made to reduce the threat to an acceptable level, accountants are welcome to resign from the organization where they work.
In general, management accountants must stand on the organization when resolving conflicts.The problem is that when management or people in the company act defiantly, the position of management accountants becomes unsafe even though the IAI code of ethics has not been able to provide detailed solutions.For this reason, Islamic business ethics in accordance with religious law is a solution for the management accountant profession.

The Ethical Dilemma of Management Accountants: Love of Money or Love of God
Money means a measure in a valuable trade instrument.However, money is a definite form visible, whether in physical or nominal form (Tang, 2016).Money is more valuable and more visible, making humans sometimes mistake and forget their main role in the world is to worship God.Dilemmas arise because there are pressures that make it difficult for management accountants to take sides (Fischer & Rosweenz, 2016).
Love of money is associated with Monetary Quotient (MQ) as a type of social intelligence that involves an individual's ability to monitor their love of money motives, stewardship behaviors, and cognitions and use that information to guide their thinking and actions in daily life (Tang, 2016;Tang et al., 2012).In the study of Ambrosi (2018), humans appear to be indifferent to calculation, but are highly calculative about fairness and merit.If observed, humans scientifically care about the amount they have.In fact, in Islam, God has regulated the sustenance of His people and increases their sustenance if they can be grateful.If humans count God's favors, they will not be able to determine the amount (Surah An Nahl: 18).So, as Muslims who believe in God and love Him, don't worry about what you have in the world because it's all entrusted and temporary.
Management accountants need to remember that they must prioritize God, do a lot of goodness, justice, and be responsible for what has been entrusted by God.Real happiness is when people can feel God's presence in their hearts.The peak of true happiness is when humans can cleanse their minds of anything that is not under religious rules (Muhammad et al., 2020).As Muslims, we should follow the ethics that follow Sharia, namely Islamic business ethics.When faced with an ethical dilemma that is quite draining, mind-boggling, and even morally destructive just to achieve profit, go back to God and your religion.Islam is a universal and comprehensive religion (Sirajudin, 2013).This means that Islam can be implemented in every time and place until the end of time.Islam has also regulated all aspects of life, from relationships between humans and relationships with God.Therefore, in facing an ethical dilemma, think not only about the physical material form received, but how the accountability for the ugliness of profit manipulation will be judged in the hereafter.Acting by religious teachings is more soothing to the heart and each of our actions will also bring God's love and compassion through blessings, namely goodness that continues to increase.Blessings will always be with him and his company.

Islamic Business Ethics
The morals of accounting principles and regulations have long been blurred (McKernan & MacLullich, 2004).Human morals can exacerbate their behavior (Heinz et al., 2013).Human morals make a lot of regulatory neglect even for honorable positions in a company.The company's board of directors and management accountants deny any non-compliance with professional ethics under the pretext of creative accounting.Indeed, this is not purely due to low morale, but the rules set are still open to interpretation and creative financial reporting behavior.
Agree with McKernan and MacLullich (2004) that accounting regulations, principles, and standards cannot be fully expected to be effective while there are still many loopholes and human morals are still low.Therefore, this article proposes that religion is the only rule that has no loopholes.Everything has been regulated in religion to always do good and avoid bad.Seeking profit in a company is allowed as well as in Islam which encourages buying and selling, but it must be in the right way and according to Islamic law.
Islam is a source of values and ethics in all aspects of human life including the discussion of comprehensive insights into business ethics (Muliasari & Dianati, 2014).Islamic ethics is different from secular ethical systems and moral codes adopted by other religions (Beekun, 1996).Other models generally propose an ethical system separate from religion.The moral code in Islamic business ethics emphasizes man's relationship to his creator.The all-perfect and all-knowing God has given His people guidelines that are not time-bound or biased by human desires so that the Islamic code of ethics will always be the most perfect enforcer of ethics.Therefore, every problem that exists in human life must always be returned to religious rules.
There are five axioms as pillars that need to be recognized and implemented by management accountants according to Islamic business ethics.First, is unity, which is known as tawhid in Islam.Tawhidic management accountants will see that all assets, property, and wealth, both corporate and personal, in this world belong to God.God, the Most Rich, entrusts the mandate to humans to manage it (Arisandy, 2020).As a Muslim, tawhid is the basis of the greatest religion of Islam.Tawhid is the greatest essence of Islam.Tawhid means to deify God, to believe in the existence of God, and to prioritize God in every life.Muslims who are tawhid must do everything because of God.This means that management accountants must carry out the mandate to manage the company with consistent intentions from start to finish only to expect the pleasure of God.The financial reporting process starting from recording transactions to forming financial reports must be because of God.Indeed, a person works on orders from superiors, but the work is not to get false worldly pleasures but to worship because of his love for God.Likewise, when faced with a confusing dilemma, go back to the first Islamic business ethics which is tawhid.
Second, equilibrium or justice.This means that all actions and decisions of management accountants must not benefit only the majority or minority groups.Everything must be based on contracts in which all parties agree with each other.If any party is harmed directly or indirectly, it is unethical.
Thirdly, free will or freedom, which shows that Islam is beautiful with freedom but must not violate accountability and justice.Islam gives humans the right to express creativity in running a trade.Management accountants do have the right to be creative in running the company but it must follow the principles of Islamic economic law, namely halal.Islam highly upholds honesty, justice, and balance.Earnings management in Islam is not following halal law because this behavior includes deception so it misleads users of financial statements by modifying earnings information to achieve high profits and company performance.
Fourth, the responsibility that must be fulfilled and carried out with all the energy and strength in carrying out the management accountant profession.Management accountants must be accountable for all decisions they have made before God because Islam requires that everyone only comply with God.
Fifth, is benevolence or ihsan, which is useful in this world and the hereafter.Management accountants should not be personally oriented and selfless.All ethical decisions made must be based on the Quran and Hadith.Management accountants must actively participate in their profession to behave ethically by providing benefits to others as provisions in the afterlife.
The five pillars must be instilled and implemented as management ethics in carrying out the profession at all company levels, especially the management accounting profession.Companies must be able to create an ethical environment that upholds religious law.This is because all levels of the company must be a drivers and reinforce that manipulation of financial statements is unacceptable and unethical.Earnings manipulation is a form of fraud because financial statements are modified in such a way as to gain profit.In Surah An Nisa verse 29, it is explained that business transactions should not be carried out in a way that is false and there must be pleasure in carrying out business transactions.The Prophet also called for in the Hadith not to take advantage in buying and selling by deceiving.Islam teaches that the profit that is allowed is reasonable, not detrimental, and does not reduce the rights of all parties involved in business transactions.
Islam also explains the basic principles that must be met in business transactions.First, the principle of mutual consent in transactions.This means that management accountants and all parties including stakeholders in carrying out company business transactions must ensure that all processes that occur must be clear in the contract until the final decision is made.Second, the principle of taawun or convenience.This means that management accountants are required to prepare financial reports by holding the principle that the profits obtained are not for the personal benefit of officials, but are expected to provide benefits to all levels of the company and society.Humans are weak-hearted creatures and temptation can come from anywhere.Therefore, management accountants must strengthen the fundamentals with the five pillars of Islamic business ethics and hold the principles of ridho and taawun.
To support the implementation of Islamic business ethics, companies must provide a strong environment for the realization of a high ethical environment and support each other to always present financial reports that are transparent, accurate, relevant, and useful for its users.If there is one part of the company that encourages unethical behavior, the company's pressure will make people around it and including management accountants will rationalize the behavior to make it morally acceptable (Shafer & Wang, 2011).The application of Islamic business ethics must begin both within the management accountant personally and followed by the company.The company in addition to implementing the Good Corporate Governance mechanism, and adhering to the code of ethics from IAI, must also begin the introduction and affirmation of the concept of love of God in the five pillars and two principles of Islamic business ethics for all elements in the company.In addition, management accountants also need to have the characteristics of shiddiq (honest), amanah (trustworthy), tabligh (retrieved), fathanah (smart) with istiqamah, which is consistent from time to time to do good deeds (Marzuqi & Latif, 2010).

Conclusion
In Islam, ethics regulates all aspects of life.Islamic ethical values in the form of unity (tawhid), equilibrium, free will, responsibility, and benevolence are the fundamental basis for the management accounting profession in solving ethical dilemma problems and enforcing ethics in the work environment.Enforcement of ethics is the key to providing public trust and will enhance one's reputation.God is the highest lawmaker.So, all problems that exist in carrying out the profession must always be returned to Islamic ethics.Management accountants must explore the science of tawhid with the belief that God will help them in carrying out their profession and solve all existing problems even though the company's problems and ethical dilemmas that must be faced are very heavy and feel unresolved but believe that nothing is impossible for God because God is the Almighty over everything.Management accountants must carry out the profession by holding the value of equilibrium or justice and free will or freedom but must remain responsible for the benevolence of the people based on religious law.However, in my opinion, deontologically and Islamically, earnings management is a form of unethical manipulation regardless of its purpose and consequences.
Hopefully, Islamic business ethics will be recognized and implemented for management accountants to uphold their professional ethical awareness.Ethical awareness based on religion exceeds material goals.In line with research by Yulia et al. (2017) and Indriasari (2015), God's orders must be better.Islamic business ethics, of course, has fulfilled the law according to the Quran and Hadith based on the teachings and examples of the Prophet, which are undoubtedly the truth rather than laws and rules made by humans.Islamic business ethics describes a management accountant who achieves the success of his company by inviting all that is good and forbidding the unlawful.Later, in the afterlife, management accountants will be able to account for all their deeds.