Why Good People Do Bad Things At Work

Document Type


Publication Date


Publication Title

Strategic Finance


[...]the Sarbanes-Oxley Act of 2002 (SOX) requires that external auditors assess a company's tone at the top as part of its audit of the organization's internal control over financial reporting. In 2019, PPG Industries, Inc., a global supplier of paints and specialty coatings and materials, reached a settlement with the U.S. Securities & Exchange Commission (SEC) over charges that it intentionally manipulated its financial accounting multiple times to improve reported performance. Both of these examples point to the importance of practicing management accountants and other financial professionals, companies, auditors, and regulators focusing on the tune in the middle and the tone at the top when assessing the likelihood of unethical behavior. According to this theory, individuals faced with an ethical dilemma where they need to choose whether to gain a benefit by behaving unethically or to maintain a positive self-image by doing the right thing will find a "balance" between these two competing motivations.