Ethics education in accounting: An investigation of the importance of ethics as a factor in the recruiting decisions of public accounting firms

In recent years, significant attention has been directed to the role of ethics in the business environment and to the ethical development of business students. This study explores the importance of ethical behavior as a factor in the recruiting decisions of public accounting firms. Factors related to the ethical behavior of entry-level employees were compared with other personal characteristics that are traditionally viewed as important to public accounting firms (e.g., personality, appearance, academic performance, etc.). Recruiters from both Big-Six and non-Big-Six firms indicated strong views on the importance of the students' ethical propensities. In fact, ethics received the highest rating by the public accounting firms regardless of their size. The results of this study provide strong evidence for accounting educators to continue to stress to their students the importance of ethical behavior and to continue their efforts to more fully integrate ethics education into the accounting curriculum.     

The Perceived Importance of an Ethical Issue as a Determinant of Ethical Decision-making for Accounting Students in an Academic Setting

In this study, we investigate the impact of an ethical decision-making construct, the ‘perceived importance of an ethical issue’ (PIE) for accounting students in an academic setting. One objective was to test the measure of this construct for generalizability in gauging ethical decision- making. The other objective was to draw inferences on the PIE construct for pedagogical purposes. Using tests of validity, the measure reasonably captured the ‘perceived importance of an ethical issue’ construct. In addition, the PIE construct was significantly related to both ethical judgment and behavioural intention. Implications for accounting educators and ethics training in business are discussed.     

Teaching ethics in accounting: a discussion of cross-cultural factors with a focus on Confucian and Western philosophy

There has been pressure from various business and professional accounting bodies to place greater emphasis on ethics education. This has been reflected in academic research and curriculum development. The purpose of this paper is to expand the debate on accounting ethics education to take into account the globalization of business, accounting and educational services and to draw attention to the importance of cross-cultural factors. To illustrate this the paper discusses the impact that Confucius has had on the ethical thinking of East and South East Asia. Where appropriate, comparisons are made with Western attitudes and secular philosophies. This focus has been chosen because of the current and future importance of the Asian area to global commerce, and the fact that an understanding of its ethical thinking and behaviour is not possible without an appreciation of Confucian thought.     

会计伦理决策影响因素研究——基于计划行为理论的检验

诚信建设是社会主义文化大发展大繁荣的重要组成部分,会计诚信是社会诚信的重要基础,会计诚信的建设立足于会计人员高标准的伦理道德水平。本文以计划行为理论为基础,采取情景实验研究法,通过问卷调查的方式探讨了我国会计人员的伦理决策现状以及影响其伦理决策的因素。结果发现,在被调查样本中,只有60%左右的会计人员能做出符合伦理标准的决策,其中,态度和主观规范对他们的伦理意向有显著影响,认知行为控制对伦理意向的影响程度视情景性质而定。本文的研究表明,我国应加强对会计人员的伦理意识和规范意识的教育,同时应注重组织伦理氛围的营造。     

The Impact of Australian Accounting Education on Repatriates' Career Development

The aim of this article is to explore the impact of Australian accounting education on the career development of Chinese self‐initiated repatriates (SIRs) in different business settings. It is acknowledged in the literature that international education has an impact on the career development of SIRs. However, in this study, we explore the impact in terms of professional knowledge, qualifications and international exposure. A multi‐case study was conducted with Chinese SIRs in different industries in an effort to understand the specific impacts and potential adverse effects across different types of enterprises in China. Our research found that international accounting knowledge has a positive influence on individuals’ careers, especially in foreign enterprises. Skills obtained from international experience are highly valued in the foreign financial industry, while the CPA qualification is highly valued in accounting firms. Readjustment, competition from local counterparts and employers’ unreasonable expectations do have adverse effects. By analysing how SIRs’ professional knowledge in accounting disciplines has impacted their job performance in different industries, this article not only contributes to contemporary literature from a direct perspective but also presents practical recommendations regarding Chinese and Australian professional education.     

中国注册会计师行业改革与发展报告(2011-2012)

财政部会计司课题组根据会计师事务所2011年度报备材料,完成了对注册会计师行业2011-2012年度发展状况的研究分析。分析结果表明,注册会计师行业在"十二五"规划的开局之年取得了较快发展,事务所业务规模、执业质量、人才素质等均有大幅提升。报告同时试图从政府主管部门角度,对2013年注册会计师行业改革与发展的若干重点工作提出意见。     

The impact of perceived ethical intensity on audit-quality-threatening behaviours

Although there has been significant interest among researchers in audit-quality-threatening behaviours (QTBs), the decision process through which staff auditors engage in those behaviours has received relatively little attention. It seems likely that the ethical intensity of the behaviours perceived by auditors may play an important role in that process; to date, this has not been tested. This study examines the mediating role of perceived ethical intensity in the relationship between perceived ethical culture of the firm and the auditors' ethical evaluation of, and intention to engage in, three different forms of QTBs. A multi-item measure of ethical intensity is developed and the findings provide the first empirical evidence of a direct relationship between perceived ethical intensity and ethical decision-making regarding QTBs. Moreover, the findings show that perceived ethical intensity fully mediates the relationship between perceived ethical culture and ethical decision-making. Implications of the findings for accounting firms and for researchers are discussed and areas for future research on the mediating role of perceived ethical intensity are suggested in the paper.     

Discussion of “economic analysis of accountants’ ethical standards: the case of audit opinion shopping”

In his paper, Cushing (Cushing, B.E., (1999). Economics analysis of accountants’ ethical standards: The case of audit opinion shopping. Journal of Accounting and Public Policy 18 (4/5)) argues for an increasing role of “laissez-faire” approaches to professional accounting ethics. To formally present his argument, Cushing (1999) employs a classic auditor–client dispute over a financial reporting issue; the dispute’s resolution is framed within a prisoner’s dilemma game. Three increasingly sophisticated models are used to examine both strict (explicit rules and monitoring) and laissez-faire (moral training and leadership) approaches to induce ethical auditor play within the prisoner’s dilemma game.My comments are an effort to consider if Cushing's (1999) arguments for a laissez-faire approach are practicable. To do this I first relate Cushing's (1999) arguments to the theoretical attributes of a profession. Second, I extend his arguments to include ethical disposition. Two bases of ethical disposition are discussed, moral reasoning theory and the persona of individuals. I conclude that a movement toward a laissez-faire approach to ethics is a strategy the profession should not ignore.     

Unintended consequences of expense ratio guidelines: The Avon breast cancer walks

This case study examines how donor and rating agency focus on percentage-based expense ratios exacerbated pressures on the Avon Product Foundation’s breast cancer walks. Beginning in 2002, Avon changed its business and accounting practices in ways that eventually helped it report better compliance with charity monitor guidelines. However, the number of walkers and amounts of funds raised dropped; the new accounting practices are less transparent and of questionable conformity with GAAP.     

Controlling-minority shareholder incentive conflicts and directors’ and officers’ liability insurance: Evidence from China

This paper examines the demand for directors’ and officers’ liability insurance (D&O insurance) by Chinese listed companies where controlling-minority shareholder incentive conflicts are acute due to the concentrated and split ownership structure. We hypothesize and find evidence that the incidence of seeking D&O insurance is positively related to the extent of controlling-minority shareholder incentive conflicts – a finding not previously documented in the literature. Using an event study, we find that the announcements of D&O insurance decisions in firms that engage in earnings management, and/or are controlled by a local government (such firms tend to have stronger incentives to tunnel), seem to have a negative wealth effect. In addition, the incidence of the D&O insurance decision is positively related to the proportion of independent directors and several litigation risk proxies. Therefore, the breakthrough in corporate governance and judicial reforms has created non-negligible perceived securities litigation risks in China.     

Is it Shameful to be an Accountant? GenMe Perception(s) of Accountants' Ethics

The function that accountants fulfil in the economic system is dependent on their ability to maintain the perception of high ethical standards. Building on the idea that birth cohorts, otherwise known as generations, are a useful proxy for the socio‐cultural environment of different time periods, we focus on the so‐called ‘GenMe’, that is, students and young workers born in the 1980s and 1990s. In particular, combining the accounting and business ethics literature, the purpose of our paper is to contribute to an increased awareness of the GenMe perceptions of accountants, with special attention given to ethical aspects. We believe that the perceptions of this age group are particularly crucial for the future of the accounting profession as it is these young people who will either become professional accountants or the accountants' future clients. Using an extensive database of 1,794 questionnaires, results show that the impression of the accountant as a corrupt professional is not dominant among GenMe and seem to suggest the existence of a multifaceted perception of accountants' ethics. Specifically, the factors that contribute to influencing GenMe perceptions of accountants' ethics are level of education, having attended an accounting course at high school level, gender, and belonging to the accounting profession. Finally, our study indicates that there is room for improving public perceptions of accountants' ethics through university courses in ethics, continuing education programs, and focused communication strategies by accounting firms and professional bodies.     

Ethical evaluations and behavioural intentions of early career accountants: the impact of mentors,peers and individual attributes

This study examined how mentoring support, peer influence and individual attributes of early career accountants (ECA) influence their ethical evaluations and behavioural intentions. Respondents indicate that their evaluation of the seriousness of the ethical conflict is affected by the perceived standard of ethical conduct of their peers, their personal ethical orientation, the extent of ethics education at university, and gender. ECAs’ evaluation of a senior colleague's unethical behaviour is affected by mentoring support and the perceived standard of ethical conduct of peers. In terms of ECAs’ willingness to contact accounting professional bodies for ethical advice, the size of the accounting firm and the extent of their ethics education at university are significant factors. Furthermore, the likelihood of respondents choosing a more ethical decision is correlated with his or her individual ethical orientation and the extent of ethics education at university.     

The Ethics Development Model Applied To Declining Ethics in Accounting

This paper presents the Ethics Development Model (EDM) as a lens by which to view declining ethics in accounting and other business professions. The paper also provides a background on fraud (one type of ethical breakdown) and its causes. The EDM comprises personal ethical understanding, application of ethics to business situations, ethical courage and ethical leadership. The model is applied to declining ethics, teaching styles and educational responsibility .     

Inconsistencies in the business law education of accounting students: A survey of accounting educators

A general requirement for an accountant to take the CPA examination is the completion of a course in business law. It appears that what constitutes the business law course requirement is rather loosely defined and leaves excessive room for interpretation. What is a business law course? A survey of accounting educators regarding the business law requirement and the law courses taught at their respective schools reveals, inter alia, a divergence of opinion regarding the business law requirement, the perceived objective of teaching business law to accounting students, the importance of the legal topics included on the CPA exam, and the coverage of those topics at their respective institutions. In general, accounting educators are encouraged to both review their current business law requirements and to take a more active role in monitoring the business law curriculum.     

Critical thinking about creative accounting in the face of a recent scandal in the Turkish banking sector

In the last two decades, serious accounting scandals occurred in large companies (e.g. WorldCom and Enron) and in the banking sector (e.g. BCCI, Barings, Allied Irish Bank and Baninter). Then the problem of creative accounting with its legal and illegal aspects has come into agendas of business firms and governments. In this paper, a certain type of creative accounting practices (i.e. fraud) has been examined in the light of a Turkish case (i.e. the Imarbank Scandal). It has been found that deficiencies in the legal frameworks for banking and accounting, inadequacies in the autonomy of governmental regulation and supervision bodies, practical difficulties in enforcing legal and ethical rules due to the slow functioning of the judicial system are significant reasons for creative accounting practices in addition to the personal greed of both owners&top management of Imarbank and its customers. However, the intention and capability of political power in combating such kind of corruption are also crucial.     

Without 'Reinventing the Wheel': Business Accounting Applied to the Public Sector

This article considers why a business accounting model was applied in an early adoption of public-sector accrual accounting. The history of that change shows that large private-sector consulting firms were active in the promotion and implementation of a commercial model of public-sector accrual accounting. It is argued here that the consulting firms' actions are best understood using concepts of mimetic isomorphism and the interplay between self-interest and perceived public interest. They formed an epistemic community in which self-interest was present but with a zealous belief that private-sector accounting was an inherently righteous objective for the public sector.     

Without `Reinventing the Wheel': Business Accounting Applied to the Public Sector

This article considers why a business accounting model was applied in an early adoption of public-sector accrual accounting. The history of that change shows that large private-sector consulting firms were active in the promotion and implementation of a commercial model of public-sector accrual accounting. It is argued here that the consulting firms' actions are best understood using concepts of mimetic isomorphism and the interplay between self-interest and perceived public interest. They formed an epistemic community in which self-interest was present but with a zealous belief that private-sector accounting was an inherently righteous objective for the public sector.     

Economic consequences of firms’ depreciation method choice: Evidence from capital investments

This study identifies several interrelated reasons why firms’ depreciation method choice is likely to influence managers’ capital investment decisions. We find that firms that use accelerated depreciation make significantly larger capital investments than firms that use straight-line depreciation. Further, we find that there has been a migration away from accelerated depreciation to straight-line depreciation over the past two decades. Firms that make such accounting changes make smaller capital investments in the post-change periods than in the pre-change periods. These results suggest that a choice made for external financial reporting purposes influences managers’ capital investment decisions.