Accounting ethics in Central and Eastern Europe: The institutional conditions for (un)ethical behavior in the accounting profession

In this chapter, we investigate the role of the institutional context in the construction of (un)ethical accounting behavior. We consider the changing environment of Central and Eastern Europe (CEE), a region characterized by a formal adoption of Western standards and norms accompanied by delays and improvised responses to reforms. We mobilize vignettes from prior research conducted in the region to illustrate certain practices and meanings that are relevant to a general awareness of accounting ethics and to provide an agenda for future research. We show how professionals’ behavior, particularly that of accountants, is shaped by cultural and societal values bearing the imprints of CEE’s past and by the reactions to the transition to capitalism. Less than functional capital markets, low levels of business acumen in many local entities’ management, and a bookkeeping, tax-compliance image of the accounting profession provide the background for unethical accounting behavior, warranting future investigation.