The Effect of Firm Size and Financial Leverage on Ethical Decision-Making by Using Structural Equation Modeling Nikoomaram Hashem*, Roodposhti Fraydoon Rahnamay*, Eshlaghi Abbas Toloie**, Lotfi Farhad Hoseinzadeh***, Gilani Yousef Taghipouriani* *Dept. of Accounting, Science and Research Branch, Islamic Azad University, Tehran, Iran **Dept. of Management, Science and Research Branch, Islamic Azad University, Tehran, Iran ***Dept. of Mathematics, Science and Research Branch, Islamic Azad University, Tehran, Iran Online published on 7 November, 2013. Abstract The purpose of this paper is to evaluate the effect of financial leverage and firm size on ethical decision making of accountants and financial managers. The statistical population in this study consists of firms listed on the Iran Stock Exchange. Respondents to the ethics questionnaire were accountants and financial managers working in companies listed on the Stock Exchange in Iran. To analyze and hypotheses testing, we used structural equation modeling method. In general, in parallel with the reduction in size of firms, the positive relationship between financial leverage and ethics increases in both the individual and corporate level; and with increasing in firm size, this relationship is reduced. Also, in parallel with the reduction in financial leverage of firms, the positive relationship between size and ethics increases in both the individual and corporate level; and with increasing in financial leverage level, this relationship is reduced. Top Keywords Firm Size, Financial Leverage, Ethical Decision-Making, Structural Equation Modeling. Top |