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This study explores auditors’ professional attitudes and behaviours. It tests the influence of public interest commitment, independence enforcement beliefs and organisational ethical culture on auditors’ acceptance of and engagement in practices that compromise their objectivity. The study is based on survey responses of 122 Spanish auditors. To analyse the combined effect of the variables under study, variance-based structural equation modelling (partial least squares, PLS) was employed. The results suggest that the regulatory efforts to improve auditors’ behaviours by enforcing independence rules have been internalised by auditors. The results also reinforce the need to instil the societal responsibilities of professional auditors, since auditors’ public interest commitment is related to their ethical decision making. Furthermore, this study reveals that firms’ ethical cultures influence auditors’ commitment to the public interest, as well as their ethical decision making. The study raises practical implications for auditing professionals, regulators and audit firms. Understanding auditors’ beliefs and behavioural patterns is critical to proposing mechanisms that enhance their ethical behaviours, which could ultimately enhance audit quality. The chapter contributes to the field by analysing the combined effect of the regulatory framework and organisational context on auditors’ professional values and behaviours.

Purpose — This paper explores the field of ethical conflicts of human resource (HR) managers in Slovenian organizations: unfair payments, extreme differences in rewards, not respecting employees’ rights, discrimination; using over excessive disciplinary power, not paying social contributions, and engaging in manipulations, among others. The main attention is paid to the implementation of employees’ rights and the factors that affect the process of the implementation of employees’ rights.Design/methodology/approach — We applied an ABC (antecedents — behavior — consequences) analysis of ethical organizational behavior. The survey encompasses 73 HR managers of Slovenian companies.Findings — HR managers perceive their role in an organization as being caught in a specific position in relation to senior management and employees. The study shows that in organizations where the “soft” and “combined” model of human resource management (HRM) is developed, the implementation of employees’ rights is more strongly realized.Research limitations — The sample size is one of the chapter’s limitations. The other is the use of quantitative statistical approach without applying other methods. In the future it should be accompanied with qualitative techniques by which dishonesty would be more directly linked to the violation of employees’ rights.Practical implications — Professional education can (1) form a solid system of professional values that can help to prioritize expectations and demands in the work place and (2) equip HR managers with competencies to solve ethical issues and to engage in ethical behavior.Social implications/value — The results show that first of all, HR managers are responsible in their role (responsibility of the role in developing the model of HRM which facilitates the implementation of employees’ rights) and only secondly, comes the responsibility of HR managers in an active sense of responsibility (responsibility as a virtue).

This research presents a comprehensive explanation of unethical pro-organisational behaviour (UPB), an emerging phenomenon in organisational behaviour and especially in moral behaviour research. The authors tested the fit of Culture-Identification-Ideology-UPB moral behaviour model. The results indicate that individuals having strong organisational identification and high relativism ethical ideology may indulge in the practice of UPB. Interestingly, our study also reveals that strong ethical organisational culture may not restrain, rather may facilitate UPB. The authors concluded with suggestions for the practitioners and future scope of research.

This study seeks to find an interactive effect between ethical leadership (EL) and corporate governance (CG) variables and investigate whether they would affect employee organizational citizenship behavior (EOCB) in a Malaysian organizational setting. The collected data from the 300 accounting/finance department employees were analyzed using Statistical Package for Social Sciences (SPSS) and Partial Least Square–Structural Equation Modeling (PLS-SEM; SmartPLS 3.0). Several primary results confirmed a coherent significant relationship between EL and ethical climate (EC), EL and EOCB, EL and CG, and CG and organizational success. Theoretically, it implies a more enhanced EOCB literature on how it can be infused in an organization. It also offers valuable knowledge by providing organizations with several insights concerning the improvement of EOCB, enabling the organization to achieve its desired success and, more importantly, how the findings could contribute directly and indirectly to emerging markets in terms of their industrial and financial performance.

Ethics initiatives are commonly used by organizations to influence members’ behavior with the expressed goal of aligning the behavior exhibited in the organization with the organization's stated rules and values (Laufer & Robertson, 1997; Schwartz, 2002; Tenbrunsel, Smith-Crowe, & Umphress, 2003; Trevino, Weaver, Gibson, & Toffler, 1999; Weaver, Trevino, & Cochran, 1999a, 1999b, 1999c). It is hoped that by emphasizing the organization's values and rules, organization members will be more thoughtful about their work behavior and consider these values and rules when making decisions at work.

We investigate the relationship among the Dark Triad personality traits, ethical fading, and unethical behavior. Our findings suggest that Machiavellianism and psychopathy have a significant relationship with ethical fading such that individuals with high Machiavellianism are more likely to exhibit ethical fading, and individuals with high psychopathy are less likely to exhibit ethical fading. We do not find a significant association between narcissism and ethical fading. In the supplemental analyses, we investigate whether ethical fading leads to more unethical behavior (i.e., fraudulent reporting) and if it mediates the effect of Machiavellianism and psychopathy on unethical behavior. Our findings suggest that, while all the dark traits have a direct effect on unethical behavior, only Machiavellianism has an indirect effect that flows through ethical fading.

Commentators have claimed that business schools encourage unethical behavior by using economic theory as a basis for education. We examine claims that exposure to agency theory acts as a self-fulfilling prophecy, reducing ethical behavior among business students. We experimentally test whether economics coursework or a manipulated competitive vs. cooperative frame affects measured ethical behavior in simulated decision settings. We measure ethical behavior using established tasks. We also measure ethical recognition to test whether agency theory reduces recognition of ethical issues. Exposure to agency theory in either prior classwork or the experiment increased wealth-increasing unethical behavior. We found no effect on unethical behavior that does not affect wealth. We found no effect of exposure to agency theory on ethical recognition. Usual laboratory experiment limitations apply. Future research can examine why agency theory reduces ethical behavior. Educators ought to consider unintended consequences of the language and assumptions of theories that underlie education. Students may assume descriptions of how people behave as prescriptions for how people ought to behave. This study contributes to the literature on economic education and ethics. We found no prior experimental studies of the effect of economics education on ethical behavior.

The beginning of the twenty-first century was plagued with extensive, evasive, and disheartening U.S. business and political leadership failures. Despite the accounting profession’s standards of professional ethics, accounting as a profession also was tainted with various ethical leadership indiscretions during this time. In response to these ethical leadership failings, renewed interest in developing accounting professionals with strong ethical principles and ethical leadership behaviors emerged. In many firms, training and development in ethical behavior is now at the forefront of communications and professional development efforts. The question remains, however, can the profession instill in its members the importance of ethical conduct? Can ethical leaders be developed who model ethical behavior? In response to the call for leaders who are ethical and moral, this research examined a model of ethical leadership and its impact on leader effectiveness for leaders within the accounting profession. The analysis shows that ethical and transformational leadership behaviors make independent and significant contributions to explaining leader effectiveness.

Ethical leadership is of great interest in the accounting profession. After numerous ethical and moral leadership failures over the last two decades, where accounting professionals played a significant role in the fraudulent behaviors that impacted individuals, businesses, and the economy as a whole, the profession has renewed its focus on promoting ethical behavior. To date, research contributing to improving ethical behavior in the accounting profession has been minimal. A plethora of research has identified the deficiency of ethical reasoning and conduct in accounting students and professionals but has provided minimal recommendations on how to improve the status quo. Earlier studies have also found that values based, ethical and transformational leadership behaviors contribute to leader effectiveness in the accounting and business professions. What has not been studied or identified are the specific ethical and transformational leadership behaviors that should be sought or developed in professionals that would improve the ethical conduct and effectiveness of accounting leaders. This study seeks to address the gap in the literature by using neuro network analysis to understand the individual components of ethical and transformational leadership that result in leaders that are more effective in the profession. It concludes that in this study of 212 accounting professionals, ethical leaders that: (a) communicate openly, (b) are trustworthy, (c) consider and support their subordinates’ interest and (d) are altruistic, with a selfless concern for the well-being of others and transformational leaders that encourage their followers to think creatively are innovative are more effective leaders.

Research has demonstrated that ethical leadership helps to limit subordinates' workplace deviance. In this chapter, we draw on social cognitive theory of moral thought and action to further understand why ethical leadership has a preventing impact on workplace deviance. We propose that the key mechanism between ethical leadership and deviance is moral disengagement, which refers to the process of making unethical behavior morally or socially acceptable. Specifically, subordinates learn cognitively and emotionally from ethical leaders to minimize the adoption of moral disengagement. When they decrease the use of moral disengagement, subordinates are less likely to display deviant behavior.