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Article
Publication date: 8 February 2013

William E. Shafer, Margaret C.C. Poon and Dean Tjosvold

The primary objective of this study is to examine the moderating influence of professional commitment (PC) on the associations among ethical climate…

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2095

Abstract

Purpose

The primary objective of this study is to examine the moderating influence of professional commitment (PC) on the associations among ethical climate, organizational‐professional conflict (OPC) and organizational commitment (OC) among public accountants. It aims to replicate recent findings on the relationships among ethical climate, OPC and OC. It also aims to extend prior research by investigating the association between ethical climate and both functional specialization and organizational rank in an accounting firm.

Design/methodology/approach

The authors surveyed all professional employees in the Singapore office of an international accounting firm.

Findings

Significant associations were found between ethical climate, OPC and OC. Participants' degree of affective commitment to their profession moderated the relationship between the public interest (benevolent/cosmopolitan) climate and perceived conflict and OC. Specifically, professionally committed employees reported less conflict and greater commitment when they felt the firm placed more emphasis on the public interest. These relationships were not present for employees with lower levels of professional commitment. It was also found that taxation specialists perceived the least emphasis in the firm on serving the public interest.

Originality/value

No prior study has documented the moderating influence of affective professional commitment on the association between ethical climate and accountants' OPC or OC. This finding has important implications, suggesting that accounting firms' ability to retain professionally committed employees will depend in part on the degree to which the firm upholds professional ideals such as serving the public interest. The fact that tax specialists perceived less emphasis on serving the public interest than other functional areas implies that tax practices may be overemphasizing client advocacy at the expense of public service.

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Article
Publication date: 21 June 2011

William E. Shafer and Richard S. Simmons

The purpose of this paper is to examine the impact of organizational ethical culture on the ethical decisions of tax practitioners in mainland China.

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3947

Abstract

Purpose

The purpose of this paper is to examine the impact of organizational ethical culture on the ethical decisions of tax practitioners in mainland China.

Design/methodology/approach

The study is based on a field survey of practicing public accountants.

Findings

As hypothesized, certain dimensions of ethical culture had highly significant effects on intentions to engage in aggressive tax minimization strategies. Cultures characterized by strong ethical norms and incentives for ethical behavior significantly reduced the reported likelihood of engaging in unethical behavior in a high moral intensity case. In a low moral intensity case, intentions to engage in questionable behavior were significantly higher when participants felt that top managers in their firm were unethical and rewarded unethical behavior. Relativism judgments (judgments of what is traditionally or culturally acceptable or acceptable to one's family) emerged as the strongest determinant of behavioral intentions across both cases. Participants also appeared highly sensitive to questions regarding what is traditionally or culturally acceptable in Chinese tax practice.

Originality/value

This is the first study of ethical decision making among tax practitioners in mainland China, and the findings add to a growing body of literature documenting the significant effects of organizational ethical context on public accountants' decision making processes. This has important implications for CPA firms, suggesting that proactive steps should be taken to promote supportive ethical contexts. The findings for the effects of relativism judgments raise concerns regarding the ethical decisions of Chinese tax practitioners, implying they are likely to engage in unethical behavior if they feel such behavior is common in their cultural environment.

Details

Accounting, Auditing & Accountability Journal, vol. 24 no. 5
Type: Research Article
ISSN: 0951-3574

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Article
Publication date: 18 January 2016

William E. Shafer, Richard S. Simmons and Rita W. Y. Yip

The purpose of this paper is to document relationships between accountants’ socioeconomic beliefs and attitudes and their professional commitment and ethical decisions in…

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4769

Abstract

Purpose

The purpose of this paper is to document relationships between accountants’ socioeconomic beliefs and attitudes and their professional commitment and ethical decisions in a domain-specific context. Specifically, it investigates the relationships among Chinese tax accountants’ level of belief in the importance of corporate ethics and social responsibility, affective/normative professional commitment and ethical judgements/intentions in a case involving client pressure to commit tax fraud.

Design/methodology/approach

The study employs a survey of tax practitioners employed by public accounting firms in China. The data are analyzed using linear regression and structural equation modelling.

Findings

The stakeholder view, representing both normative and practical support for the importance of corporate ethics and social responsibility, was strongly and positively associated with professional commitment among tax practitioners. The stakeholder view also exhibited a strong negative association with intentions to engage in tax fraud. Tax accountants who possessed higher levels of professional commitment judged tax fraud as more unethical, and such ethical judgements were associated with a lower likelihood of intending to engage in fraud.

Originality/value

The associations between: first, professional accountants’ beliefs in the importance of corporate ethics and social responsibility and their level of professional commitment; and second, professional commitment and tax professionals’ ethical judgements have received little attention in the prior literature. The findings of this study suggest that the integrity of public accounting services may be influenced by relatively broad socioeconomic attitudes, and that this effect may operate partially through commitment to professional values.

Details

Accounting, Auditing & Accountability Journal, vol. 29 no. 1
Type: Research Article
ISSN: 0951-3574

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Article
Publication date: 20 April 2010

William E. Shafer and Zhihong Wang

The purpose of this paper is to addresses the impact of organizational ethical context (ethical climate and ethical culture) and Machiavellianism on…

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2122

Abstract

Purpose

The purpose of this paper is to addresses the impact of organizational ethical context (ethical climate and ethical culture) and Machiavellianism on organizational‐professional conflict (OPC) and affective organizational commitment (OC) among Chinese accountants. The paper also aims to test for interactive effects of ethical context and Machiavellianism.

Design/methodology/approach

The paper is based on a field survey of 89 professional accountants employed by companies operating in Mainland China.

Findings

Two aspects of the organizational ethical culture, expectations of obedience to authority and strong ethical norms/incentives, emerged as the dominant influences on both OPC and affective commitment. Strong negative correlations are observed between OPC and OC, and between Machiavellianism and OC. Contrary to expectations, the organizational ethical context had the greatest impact on OC among high Machiavellians. For low Machiavellians, OPC fully mediated the relationship between ethical context and OC, but no such mediation effects are found for high Machiavellians.

Originality/value

This is the first study of the relationships among ethical context, OPC and OC among industry accountants in China, and the first study of the effects of Machiavellianism on these relationships. The results generally support our contention that organizational ethical context will be a key determinant of OPC and OC. The fact that weaker ethical cultures were strongly associated with increased conflict and decreased commitment suggests that managers of accounting/auditing departments should take a proactive approach to developing and nurturing positive or supportive cultures. The differences in results for high and low Machiavellians also raise interesting questions that should be addressed in future research.

Details

Managerial Auditing Journal, vol. 25 no. 4
Type: Research Article
ISSN: 0268-6902

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Abstract

Details

Research on Professional Responsibility and Ethics in Accounting
Type: Book
ISBN: 978-0-76231-239-9

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Article
Publication date: 18 September 2009

William E. Shafer

The purpose of this paper is to focus on the effects of the ethical climate in Chinese certified public accounting (CPA) firms on auditors' perceptions of…

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4035

Abstract

Purpose

The purpose of this paper is to focus on the effects of the ethical climate in Chinese certified public accounting (CPA) firms on auditors' perceptions of organizational‐professional conflict (OPC) and affective organizational commitment (OC). We also test for differences in the perceived ethical climates of local and international CPA firms.

Design/methodology/approach

The study is based on a survey of 167 professional auditors (seniors and managers) employed by local and international CPA firms operating in the People's Republic of China.

Findings

Certain dimensions of the perceived ethical climate are significantly related to OPC, and to affective OC. As anticipated, there was also a strong negative relationship between OPC and OC. There was no clear pattern of differences in the perceived ethical climates in local and international CPA firms. Impression management was highly correlated with OPC, OC, and three of four ethical climate dimensions, suggesting that Chinese auditors bias their reports of these variables in a socially desirable fashion.

Originality/value

To our knowledge, this is the first study to address the relationship between ethical climate and OPC, and the first to examine OPC and OC among auditors in Mainland China. The findings support our contention that the perceived ethical climate is a key determinant of OPC, suggesting that future research on OPC should place more emphasis on organizational characteristics. In addition, the apparent tendency of auditors to bias their reports of OPC, OC, and ethical climate stresses the importance of controlling for social desirability response bias in surveys of professional accountants.

Details

Accounting, Auditing & Accountability Journal, vol. 22 no. 7
Type: Research Article
ISSN: 0951-3574

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Article
Publication date: 15 March 2013

William E. Shafer, Margaret C.C. Poon and Dean Tjosvold

The aim of this study is to examine the relations among organizational ethical climate, goal interdependence (cooperative vs competitive goals), and organizational and…

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1619

Abstract

Purpose

The aim of this study is to examine the relations among organizational ethical climate, goal interdependence (cooperative vs competitive goals), and organizational and professional commitment among auditors in Asia.

Design/methodology/approach

The authors conducted a field survey of 293 auditors employed in two offices of an international accounting firm: one in Hong Kong and one in Singapore.

Findings

Structural equation analyses indicate that instrumental ethical climates that focus on the pursuit of self‐interest and firm profitability promote more competitive and less cooperative goals among auditors. Benevolent/cosmopolitan (public interest) climates appear to enhance cooperative goals among employees. Cooperative goals in turn were associated with increased affective and normative organizational and professional commitments. Competitive environments significantly reduced affective and normative organizational commitment as well as affective professional commitment. Compared with their Hong Kong counterparts, Singaporean auditors perceived the ethical climate in their firm to be more positive or supportive of ethical values, and also felt the work environment in the firm was more cooperative and less competitive. In addition, the Singaporean auditors exhibited somewhat higher levels of emotional attachment to both their firm and the public accounting profession.

Originality/value

No prior accounting study has examined the influence of cooperative/competitive goals on work outcomes in a public accounting setting, or the role of ethical climates as potential antecedents of such goals. The results of the current study indicate that the development of cooperative and competitive goals is significantly related to the perceived ethical climate in public accounting firms, and that such goals may have significant effects on employee commitment not only to their organization but also to their profession. The significant differences between auditors in Hong Kong and Singapore have not previously been documented, and raise questions for future research.

Details

Managerial Auditing Journal, vol. 28 no. 3
Type: Research Article
ISSN: 0268-6902

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Article
Publication date: 24 May 2011

William E. Shafer and Zhihong Wang

The purpose of this study is to investigate the effects of Chinese industry accountants' perceptions of the ethical context in their organization and Machiavellianism on…

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2364

Abstract

Purpose

The purpose of this study is to investigate the effects of Chinese industry accountants' perceptions of the ethical context in their organization and Machiavellianism on attitudes toward earnings management.

Design/methodology/approach

The research is based on a survey of professional accountants employed by companies in Mainland China.

Findings

The results indicate that perceptions of a strong organizational emphasis on serving the public interest (benevolent/cosmopolitan climate) significantly reduced professional accountants' willingness to condone accounting earnings management. Professionally certified accountants also judged accounting earnings management more harshly. Consistent with our expectations, high Machiavellians judged earnings management more leniently, although this effect was only marginally significant in the case of accounting earnings management. In contrast to prior studies of earnings management in the USA, the participants judged accounting earnings management more leniently, but judged operating earnings management more harshly.

Originality/value

This is the first study to document that an organizational emphasis on serving the public interest can restrain aggressive behavior among industry accountants. Claims of serving the public interest in accounting have traditionally focused on the role of the independent auditor in protecting the public from misleading financial reporting. The results indicate that appeals to public interest obligations also have resonance for professional accountants in industry. The fact that certified accountants were less tolerant of accounting earnings management also has important implications, demonstrating the practical value of professional certification programs and their associated training and socialization processes. The contrast observed between the ethical judgments of our Chinese participants and US accountants surveyed in previous studies raises important questions for further research.

Details

Managerial Auditing Journal, vol. 26 no. 5
Type: Research Article
ISSN: 0268-6902

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Article
Publication date: 20 June 2008

William E. Shafer and Richard S. Simmons

The purpose of this paper is to investigate the effects of attitudes toward the perceived importance of corporate ethics and social responsibility, and Machiavellianism, a…

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8970

Abstract

Purpose

The purpose of this paper is to investigate the effects of attitudes toward the perceived importance of corporate ethics and social responsibility, and Machiavellianism, a general measure of the propensity for manipulative and deceitful behaviour, on tax professionals' willingness to participate in aggressive tax avoidance schemes of corporate clients.

Design/methodology/approach

The paper is based on a survey of tax professionals in Hong Kong.

Findings

The paper finds that Machiavellianism affects tax advisors' expressed viewpoints toward the importance of corporate ethics and social responsibility, which affect professional judgements toward aggressive tax minimisation. As anticipated, high Machiavellians are more likely to endorse the traditional “stockholder view” of corporate responsibility (which holds that corporations have little responsibility beyond maximising their profits), and less likely to support the “stakeholder view” (which recognises corporate responsibilities to a broader range of potential stakeholders). The stockholder view (but not the stakeholder view) of corporate responsibility mediates the relationship between Machiavellianism and ethical/social responsibility judgements. Machiavellianism also had significant direct effects on ethical and social responsibility judgements.

Originality/value

The paper provides insights into the decision processes used to justify aggressive tax minimisation strategies. The findings indicate that commonly articulated views toward corporate ethics and social responsibility may be used to support unethical strategies. In particular, the finding that the stockholder view mediates the relationship between Machiavellianism and ethical/social responsibility judgements suggests that the stockholder view may be adopted to rationalise overly aggressive tax avoidance.

Details

Accounting, Auditing & Accountability Journal, vol. 21 no. 5
Type: Research Article
ISSN: 0951-3574

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Article
Publication date: 1 August 2001

William E. Shafer, Roselyn E. Morris and Alice A. Ketchand

This study investigates the effects of personal values on auditors’ ethical decision making. Previous accounting research has investigated the value profiles of practicing…

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9366

Abstract

This study investigates the effects of personal values on auditors’ ethical decision making. Previous accounting research has investigated the value profiles of practicing CPAs and accounting students, and the effects of values on accounting students’ ethical decisions. However, the current study is the first to empirically address the role of values in the ethical decision processes of professional auditors. We surveyed a random sample of AICPA members to assess their value preferences and reactions to an ethical dilemma involving client pressure for aggressive financial reporting. Contrary to our hypothesis, personal value preferences did not influence auditors’ perceptions of the moral intensity of the ethical dilemma. As hypothesized, perceptions of moral intensity influenced both ethical judgments and behavioral intentions.

Details

Accounting, Auditing & Accountability Journal, vol. 14 no. 3
Type: Research Article
ISSN: 0951-3574

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