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Article
Publication date: 3 January 2017

Guangyou Liu and Hong Ren

This paper aims to investigate the impacts of audit engagement team’s ethical leadership, trainee auditors’ reporting intent and other selected factors on their likelihood…

Abstract

Purpose

This paper aims to investigate the impacts of audit engagement team’s ethical leadership, trainee auditors’ reporting intent and other selected factors on their likelihood of reporting client’s irregularities.

Design/methodology/approach

The present investigation is based on 150 effective questionnaire responses provided by a group of trainee auditors working for certified public accounting (CPA) firms. The questionnaire items relating to trainee auditors’ likelihood of reporting client’s irregularities are based on Crawford and Weirich’s (2011) classification of common forms of fraudulent financial reporting. The authors’ measurement of the audit engagement team leaders’ ethicality is based on the ethical leadership scale developed in Newstrom and Ruch (1975) and Kantor and Weisberg (2002). Regression models are used to testify the authors’ hypotheses on the correlations of the trainee auditors’ likelihood of reporting client’s irregularities with audit engagement team’s ethical leadership, trainee auditor’ reporting intents and other selected factors.

Findings

The major conclusion of this study is that there is a significantly positive correlation between trainee auditors’ likelihood of reporting client’s irregularities and their perception of audit engagement team leader’s ethicality. This paper also points out that trainee auditors’ higher evaluation of stable firm–client relationship reduces their likelihood of reporting client’s irregularities, whereas their concerns with future career development increase the likelihood of reporting. In addition, this paper documents the fact that male trainee auditors more easily perceive the ethicality of their team leader than females, and that trainee auditors with less academic achievements (lower GPA) tend to perceive more easily the ethicality of their team leader than those with better academic achievements (higher GPA).

Research limitations/implications

Two business ethics variables constructed and used in this study, i.e. trainee auditors’ likelihood of reporting client’s irregularities and engagement team leader’s ethicality, can be applied in future research on whistleblowing in the audit profession.

Practical implications

Practical implications can also be drawn from the findings to enhance the ethical management at both engagement and firm levels.

Originality/value

This paper contributes to the audit research literature by providing evidence on the significant positive impacts of team leader’s ethicality on the entry-level audit professional’s likelihood of reporting client’s irregularities.

Details

Journal of Financial Crime, vol. 24 no. 1
Type: Research Article
ISSN: 1359-0790

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Article
Publication date: 2 October 2017

Guangyou Liu and Siyu Liu

This paper aims to answer the following two research questions: Do corruption cases present different features before and since the new administration in China? How are…

Abstract

Purpose

This paper aims to answer the following two research questions: Do corruption cases present different features before and since the new administration in China? How are criminal penalties affected by these corruption features?

Design/methodology/approach

The investigation is based on the online disclosure of 269 state corruption audits and their consequences, which have been made public by China’s National Audit Office since 2011. By manual coding, these official reports were analyzed, and an appropriate-sized sample of corruption cases was chosen. The authors then adopted Welch’s t-test and regression model methods to test the research hypotheses relevant to the two research questions.

Findings

The authors find that larger embezzlement or bribery amounts and more organizational corruption cases have been detected and punished since the anti-corruption campaign was launched by the new administration. They also conclude that significantly tougher criminal penalties were given to corruption cases involving large monetary amounts, that bribery cases were more harshly punished compared to other occupational crimes and that individual perpetrators received tougher criminal penalties than organizational criminals. In addition, the authors observe a trend that criminal penalties for corruption have been increasingly harsher in recent years.

Research limitations/implications

The limitations of this study are quite clear as the Chinese corruption cases in this sample only include state corruption audit cases and does not refer to high-profile corruption cases investigated by the Central Commission of Discipline Inspection. However, this study suggests that state corruption audit results are a good research sample, which can be used to extend empirical tests to archival data acquired from state audit practices and can encourage more studies on public sector auditing and occupational financial crime.

Practical implications

State corruption audits can be an effective approach to successful anti-corruption campaigns, and the conclusions can be useful to policy makers and legislators in China and other developing countries.

Originality/value

This paper bridges some gaps in the existing financial crime literature. First, this study on corruption features is located within the context of a political administrative change; second, the state audit is highlighted as a supervising agency in the anti-corruption campaign; and third, the authors’ contribution adds to the empirical testing of data sets of state corruption audits within the existing financial crime literature.

Details

Journal of Financial Crime, vol. 24 no. 4
Type: Research Article
ISSN: 1359-0790

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Article
Publication date: 1 July 2019

Guangyou Liu and Hong Ren

This study aims to investigate the organizational learning of trainee auditors who represent the young generation of new entry-level professionals in CPA firms, and…

Abstract

Purpose

This study aims to investigate the organizational learning of trainee auditors who represent the young generation of new entry-level professionals in CPA firms, and examines the possible associations between organizational learning and job satisfaction.

Design/methodology/approach

A questionnaire survey is administered among the target group of trainee auditors to explore possible approaches to their organizational learning in CPA firms. The results are used to generate organizational learning variables, which enable us to empirically test the research hypotheses regarding the association between organizational learning and job satisfaction.

Findings

The authors conclude that there are three main dimensions of organizational learning for new entry-level professionals in CPA firms, namely: workplace interactions, supervising and monitoring and supportive informational systems. The authors also find that workplace interactions and supportive information systems are significantly associated with job satisfaction. The authors show that the females and males prefer different approaches to organizational learning in CPA firms. The authors also find that trainee auditors who work for bigger CPA firms enjoy more job satisfaction than those working for smaller CPA firms, and that male trainee auditors are more easily satisfied with audit jobs than female trainees.

Research limitations/implications

This study is limited in that its sample is composed of trainee auditors, who are used to proxy for entry-level professionals in CPA firms. Future studies can include a direct focus on the organizational learning of junior auditors in CPA firms. Future studies can also investigate organizational learning in the firm-wide context in which CPA firms and their employees are considered as part of a larger situational process of organizational learning.

Practical implications

The conclusions can help to improve practice management and human resource policies in CPA firms. The findings highlight the importance of establishing an effective organizational learning culture, and suggest how this can be achieved by providing friendly and instructive workplace interactions, helpful supervisory and mentoring relationships, and better information support.

Originality/value

This study contributes to the audit literature by identifying the three dimensions of organizational learning for entry-level professionals in CPA firms. The authors substantiate the argument that mentor-protégé relationships in CPA firms have different effects on job satisfaction for female and male trainee auditors.

Details

Accounting Research Journal, vol. 32 no. 2
Type: Research Article
ISSN: 1030-9616

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Article
Publication date: 27 September 2011

Guangyou Liu

The purpose of this paper is to test whether significant differences in ethical reasoning exist between Chinese accountants and managers when facing an ethical dilemma…

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Abstract

Purpose

The purpose of this paper is to test whether significant differences in ethical reasoning exist between Chinese accountants and managers when facing an ethical dilemma. Further tests are conducted to identify what professional contextual factors and personal value preferences can be introduced to explain the ethical reasoning differences observed.

Design/methodology/approach

Three research questions are raised and related hypotheses are developed and tested by the use of a defined issue test (DIT) instrument containing four hypothetical scenarios of different dilemmatic issues, and a Rokeach values survey questionnaire adapted to suit the Chinese business culture.

Findings

The findings and conclusions include: Chinese managers and accountants are not significantly differentiated in terms of ethical reasoning levels measured by the overall DIT instrument, however, the break‐down results of the DIT individual dilemmatic scenarios shows that significant differences exist between the two professional types in three out of four scenarios. Second, gender and frequency of making compromises are two significant contextual determinant of ethical reasoning levels of managers but not those of accountants, and for the accountants, no significant contextual factors are observed in the current study. Third, in determining the impacts of value preferences on ethical reasoning levels, the four‐factor classification approach produces a more contrasting result than the seven‐factor classification approach.

Research limitations/implications

The selection of the four scenarios in the DIT instrument is subjective according to the designation of the test, and Chinese business profession's ethical ideologies might differ among different regions. However, these research limitations might inspire further ethics research on cross‐regional comparisons in China and other emerging economies.

Practical implications

In Chinese surging markets, appropriate socio‐economic order can only be maintained by highly ethical reasoning and conduct on the part of business managers and accountants. The current results and findings would help to identify what factors and value preferences weigh more, in order to improve the professional ethicality.

Originality/value

This paper contributes to the research literature of business ethics by adding a managers‐accountants comparative study on ethical reasoning differences, especially the ethicality of two different professions in emerging economies; further, it includes contextual factors and value preferences in identifying those determinants of ethical reasoning differences.

Details

Asia-Pacific Journal of Business Administration, vol. 3 no. 2
Type: Research Article
ISSN: 1757-4323

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Book part
Publication date: 15 December 2011

Guangyou Liu and Hong Ren

Purpose – The paper presents a content analysis of the 2009 Exposure Draft of Code of Ethics for Professional Accountants in China. It aims to investigate how equivalently…

Abstract

Purpose – The paper presents a content analysis of the 2009 Exposure Draft of Code of Ethics for Professional Accountants in China. It aims to investigate how equivalently the Chinese Institute of Certified Public Accountants (CICPA) adopts the International Federation of Accountants (IFAC) Code with certain adjustments due to specific national circumstances. The investigation is intended to highlight the principles-based conceptual framework approach to settlement of ethical standards and regulation for professional conduct.

Design/Methodology/Approach – Regarding the codes of ethics for professional accountants as a genre of discourse text, this paper applies a content analysis method to the investigation of how the newly revised Code of Ethics for Professional Accountants in China adopts the IFAC Code of the same type. Both semantic content and presentation format are considered in the content analysis.

Findings – This study puts forward the argument that even though CICPA claims to have equivalently adopted the principles-based conceptual framework of the IFAC ethical codification, the rigid legalistic presentation format might, however, deviate from the newly revised codification of CICPA from ethical principles to regulatory rules. Our findings prove a practical and nation-specific form of combining direct import and legal enhancement at a time when the Chinese accounting profession is on its way to converging with the IFAC Code of Ethics.

Research limitations/Implications – One limitation of the current study is the lack of information about the motivation of CICPA in adopting the principles-based conceptual framework approach to ethical codification, besides the pragmatic needs of global economic and business environments. Also, the current study focuses its comparison on IFAC and CICPA, without limited consideration of differences in cultural traits.

Practical implications – Content analysis results and conclusions of the study might render pragmatic the implications for future adoptions of the IFAC Code by various national or regional professional bodies.

Originality/Value – This paper proposes a content analysis, in terms of semantic units and legislative formats in ethical codification documents, to identify the principles-based conceptual framework approach in the IFAC and CICPA codes of ethics.

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Article
Publication date: 28 October 2014

Guangyou Liu and Xiaohui Wang

This paper aims to investigate the relationship between ethical leadership and Ba Ling (霸凌) perceived by Certified Public Accounting (CPA) interns, and the influence of…

Abstract

Purpose

This paper aims to investigate the relationship between ethical leadership and Ba Ling (霸凌) perceived by Certified Public Accounting (CPA) interns, and the influence of gender factor of leaders and followers on the relation. Moreover, Workplace Ba-Ling (职场霸凌, a derivation of workplace bullying) as a new conceptual idea, specifically extracted from Chinese context, is first taken into consideration.

Design/methodology/approach

This research is based on the questionnaire responses of accounting interns enrolled in a university-CPA firms cooperative education programs, and the classical Ethical Leadership Scale and Negative Acts Questionnaire were applied in the survey to get empirical results.

Findings

The empirical results reveal the fact that ethical leadership of the audit project teams is negatively related to workplace bullying perceived by the accounting interns working in the CPA firms. No significant impacts were found of the gender factor on workplace bullying and ethical leadership; however, the further breakdown of the gender factor into the four dimensions of the leader – follower gender differences lead to the significant difference of ethical leadership among the four redefined gender difference groups. The ranking order in terms of ethical leadership further proves that female leaders tend to show higher ethicality than male ones.

Research limitations/implications

As public accounting industry has acted an important role throughout the drastic Chinese economic growth of more than three recent decades, this paper provides knowledge of the gender-differentiated relationship between ethical leadership and workplace bullying, which implies serious concerns to be given in the varied business and workplace contexts in China and other emerging economies.

Originality/value

There has been an increasing literature trend discussing workplace bully in Western business studies; however, rarely has existing literature addresses this kind of issue in the emerging economies like China, where workplace ethics has become a commonly criticized concern with the fast economic growth in recent decades. Additionally, this paper proposes the new Chinese term of Ba Ling corresponding with the Western workplace bullying.

Details

Chinese Management Studies, vol. 8 no. 4
Type: Research Article
ISSN: 1750-614X

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Article
Publication date: 14 September 2012

Guangyou Liu

The purpose of this paper is to investigate how cooperative accounting education (CAE) programs jointly activated by an accounting institution and its cooperating CPA…

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Abstract

Purpose

The purpose of this paper is to investigate how cooperative accounting education (CAE) programs jointly activated by an accounting institution and its cooperating CPA firms impact the students’ satisfaction with practising what they have learned in work placement.

Design/methodology/approach

A structured equation model is constructed to describe the explanatory framework of the student satisfaction with CAE programs based on the CPA firm internship. The paper also presents a survey of 192 accounting interns at 14 local CPA firms in South China, in order to test how satisfied the intern students are with the cooperative education program.

Findings

The results prove that student interns are quite satisfied with the arrangements and learning effects of CAE programs, but they are not much related to improvement of their socialization skills. The findings reveal that the CPA firm culture has considerable influence on the effectiveness of CAE; the student command of accounting expertise has moderate impacts on it; and university curriculum makes no significant differences to student satisfaction.

Research limitations/implications

The structural framework established in this study synthesizes the impacts of accounting expertise, CPA firm culture and university curriculum on student satisfaction with CAE programs could be implicative to further research on cooperative education or work integrated learning.

Practical implications

My study highlights the importance of student satisfaction with CAE programs based on the CPA firm internship. An effective CAE program requires the involvements of the universities, the students and the CPA firms. In particular, the firm culture greatly contributes to the student satisfaction with the program.

Originality/value

This paper points out the student satisfaction as a crucial perspective to evaluation the effects of CAE programs. This paper also synthesizes from prior literature a theoretical framework for investigating the effects of CAE programs based CPA firm internship.

Details

Asian Review of Accounting, vol. 20 no. 3
Type: Research Article
ISSN: 1321-7348

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Book part
Publication date: 15 December 2011

Abstract

Details

Accounting in Asia
Type: Book
ISBN: 978-1-78052-445-0

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Article
Publication date: 26 August 2014

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395

Abstract

Details

Asian Review of Accounting, vol. 22 no. 3
Type: Research Article
ISSN: 1321-7348

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Article
Publication date: 12 January 2021

Faheem Ur Rehman and Abul Ala Noman

China's outward foreign direct investment (OFDI) has risen remarkably over the past two decades. Does such increase affect the sophistication of Chinese exports, is a…

Abstract

Purpose

China's outward foreign direct investment (OFDI) has risen remarkably over the past two decades. Does such increase affect the sophistication of Chinese exports, is a significant issue that has surprisingly remained unaddressed? The purpose of this study is to investigate the impact of Chinese OFDI on bilateral export sophistication of China and its OFDI receiving partner countries during 2003–2017 by applying Poisson pseudo-maximum likelihood approach based on gravity model.

Design/methodology/approach

The analysis has been performed for total sample, region-wise grouped sample (Europe and Central Asia, Middle East and North Africa, Latin America and Caribbean, East Asia and Pacific, South Asia, North America and sub-Saharan Africa) and income-wise grouped sample (high income, upper middle income, lower middle income and lower income group sample).

Findings

The results confirmed the significant and positive effect of Chinese OFDI on bilateral export sophistication in total sample, regions-wise and income groups sample.

Originality/value

The study provides a helpful suggestion regarding policy towards achieving more sophistication in export and thus to achieve comparative advantage in trade.

Details

China Finance Review International, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2044-1398

Keywords

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