Hypothesis 1a predicts that an individual with a more idealistic ethical orientation will be less likely to engage in earnings management behavior, and the observed path coefficient ()0.04) is significant and supports this hypothesis. Similarly, Hypothesis 1b predicts that an individual with a relativistic ethical orientation will be more likely to engage in earnings
management behavior, suggesting a positive relationship between relativism and earnings management behavior. The significant path coefficient (0.33) supports hypothesis 1b. These results are consistent with Douglas and Wier (2000)