An Analysis of International Accounting Codes of Conduct

The International Federation of Accountants (IFAC) has recently issued a revised “Code of Ethics for Professional Accountants” (IFAC Code). As a requirement for membership in IFAC, a national accounting organization must either adopt the IFAC Code or adopt a code of conduct that is not “less stringent” than the IFAC Code. In this paper, we examine the extent to which 158 national accounting organizations have adopted the revised IFAC Code as their own. Our results indicate that 80 of our sample organizations have adopted the IFAC Code (sometimes with minor modifications), while the remaining 78 opted not to utilize the model IFAC Code. We then test the hypothesis that national accounting organizations in lower income economies would be less likely to adopt the IFAC Code than those in high income economies. Our results do not support the hypothesis. We argue that one potential reason for such a finding is that adopting the IFAC Code may be a cost effective means of adopting a code of ethics for organizations in lower income economies.     

The Impact of Cultural Differences on the Convergence of International Accounting Codes of Ethics

The International Federation of Accountants (IFAC) has issued a revised “Code of Ethics for Professional Accountants” (IFAC Code). The IFAC Code is intended to be a model code of ethics for national accounting organizations throughout the world. Prior research demonstrates that approximately 50% of IFAC member organizations have adopted the IFAC Code as their organizational code of conduct. There is therefore empirical evidence that international convergence of accounting ethical standards is occurring. We employ Hofstede’s (2008, http://www.geert-hofstede.com/hofstede_dimensions.php) cultural dimensions in an attempt to empirically explain accounting organizations’ decisions about whether to adopt the IFAC Code or to retain their organization-specific code. Our results indicate that accounting organizations in cultures with high levels of Individualism and Uncertainty Avoidance are less likely to adopt the model IFAC Code. Organizations in high Individualism and Uncertainty Avoidance societies are therefore less likely to surrender the setting of ethical standards to an outside, international organization.     

Global harmonisation of the professional behaviour of accountants

This paper reports findings from a study into national associations of accountants from the perspective of the model code of the International Federation of Accountants (IFAC), Code of Ethics for Professional Accountants . Using data collected from a survey document, the paper analyses the extent of the model code's influence in an international process of harmonisation of ethical rules for accountants. Obstacles to the adoption of the model code are examined, as is the impact that government supervision of codes has had on harmonisation efforts. Particular attention is paid to the relationship between professional independence and close family relationships and culture. Findings are also presented on other issues of code content, and the most appropriate body for interpreting national codes is identified. These items were included as matters of then current concern to the Ethics Committee of IFAC.     

Toward a cross‐cultural theory of “exemplary organizations”: Evidence from Cuba

Management interest in “good companies to work for,” or “exemplary organizations,” has attracted the interest of researchers in the United States and Europe. We contribute to the literature on exemplary organizations by studying the representation of “exemplary organizations” in an unusual context, Cuba, and by inviting scholars to explore the cross‐cultural differences between what in different countries is viewed as an exemplary organization. Until now, studies on the best companies to work for have focused on companies operating in capitalistic economies. We aim to develop a better understanding of the representation of what a good place might be in an economic and ideological context that is in sharp contrast with the contexts in which this theme has been studied previously. © 2007 Wiley Periodicals, Inc.     

MNCs,Worker Identity and the Human Rights Gap for Local Managers

This paper documents the development and implementation of an ethically valid code of ethics in a newly formed national professional organization. It describes the experience and challenges faced by the National Association of Senior Move Managers (NASMM) and its leaders as they worked to establish ethics as an organizing framework early in its evolution. Designed by the investigators and supported by the NASMM Board, the process took place over a 2 year period and more than 130 people participated. It provides a model for code development that is both practical and grounded in theory. Although the content of a code of ethics (the “product”) provides guidance to organizational members in the conduct of everyday business, especially when they face ethically challenging situations, how the code is developed (the “process”) influences its ethical validity. Few published cases document an organization’s experience developing a code, and this is the first case, to our knowledge, that provides a first-hand longitudinal account of an effective code development process.     

Does International Trade Catch Up with National Trade of Countries? Yes

The article applies an index suggested by Jeffrey Frankel on how to measure the gap between the intensity of national versus international transactions of a country to more than 100 countries over four periods between 1990 and 2005. The gap stands for “incomplete” globalization. It is shown that the gap has steadily declined for most countries over the sample period, irrespective of income levels. While larger economies are still less globalized than small economies, differences in domestic market size have become less important as a dividing line between more and less globalized economies.     

Professional Ethics Code Conflict Situations: Ethical and Value Orientation of Collegiate Accounting Students

Public accounting in the United States is generally guided by the Code of Professional Conduct of the American Institute of Certified Public Accountants (AICPA). It has been suggested that education in understanding and accepting their ethical code would increase accountants' adherence and ethicality. This study was designed to examine the level of consensus to AICPA ethical standards by accounting students (ethical orientation). Situation ethics provided the theoretical rationale for this study. The data were gathered by contacting colleges in the New York Metropolitan Area who offered curriculums which were registered by the State Education Department of New York State for Certified Public Accountancy preparation. The final sampling units for this study consisted of 306 beginning accounting students and 294 advanced accounting students. Included in the secondary sampling units were both private and public colleges, secular and non-secular colleges, and American Assembly of Collegiate Schools of Business (AACSB) and non AACSB-accredited colleges. Three instruments were used to collect data for this study: a student demographic questionnaire; the Rokeach Value Survey (RVS); and a researcher-adapted questionnaire, the Index of Ethical Congruence (IEC) which measured the level of consensus to the AICPA Code of Conduct (ethical orientation). T-tests were used to compare the levels of consensus to the Code (IEC score) between beginning and advanced accounting students, and between accounting students who had, or had not, taken a course in ethics. No significant difference in scores were found for those students who had been exposed to the Code or who had taken a course in ethics. Significant differences in IEC scores were found for those students who had attended AACSB-accredited colleges and meaningful differences for those students who had attended public colleges as compared to private colleges. Multiple regression analyses were used to test the relationship between the ethical orientation score (IEC) and personal values measured by the RVS. No relationship between personal values measured by the RVS and ethical orientation was found by this study. This study does not support the influence of situation on ethical orientation. The results indicate that ethical orientation is not significantly improved through exposure to the AICPA Code of Conduct in collegiate courses in accounting.     

Cluster-Based Advantages in the Innovation Process: The Diffusion of Nanotechnology in Two Chinese Cities

Researchers have shown that “cluster” is a more useful unit of analysis than “nation” in innovation studies. Clusters are characterized by interconnected organizations, shared resources and frequent knowledge flows. Within national boundaries, multiple clusters with different relative advantages may coexist, and exhibit very different innovation patterns. Yet, in studies of innovation in emerging economies, there remains little attention on cluster-based advantages, and how these advantages generate distinct patterns of innovation. To bridge this gap, this study analyzes the diffusion patterns of nanotechnology in two Chinese clusters—Beijing and Shanghai. With different relative advantages, the diffusion of nanotechnology has been oriented by different levels of “imitation” and “innovation” forces in the two Chinese clusters. This study applies the Bass Model to quantify imitation and innovation forces, and compare the resultant diffusion patterns of nanotechnology in the two clusters with other technologies. Supplementary qualitative data is also provided to show how Chinese scientists perceive their relative advantages in different clusters. Among other things, the findings suggest that scientists of emerging economies favor the learning-by-doing principle while utilizing external networks.     

Climate Negotiations,EITE Industries,and the WTO: Facing the Conflicts

Though developed countries have contributed the lion's share of greenhouse gases to date, developing countries are rapidly catching up – and seem unlikely to adopt meaningful GHG controls in the near term. This prospect concerns major developed countries, since their own GHG controls could cause carbon-intensive production to migrate to unregulated countries, a phenomenon called “carbon leakage.” This article surveys progress in international negotiations to date. It argues that, given the slow pace of efforts to create a global GHG control framework, carbon tariffs and other border measures are likely to be invoked as an alternative means of preventing carbon leakage. The article illustrates the legal and economic pitfalls of border adjustments and urges major emitting countries to suspend the imposition of border measures for a limited time while negotiating a “Code of Good Practice” to guide their trade-related climate measures going forward. The Code that we describe would constrain the scope of border measures and sharply limit their negative consequences.     

Protect,profit, profess,promote: Establishing legitimacy through logics of diversity in Canadian accounting firm recruitment documents

Prospective accounting recruits are increasingly diverse. Drawing on a theoretical framework that combines legitimacy theory, impression management, and institutional logics, we use content analysis to examine how the eight largest Canadian accounting firms refer to diversity in their recruitment websites. Our analysis reveals accounting firms adopt multiple institutional logics and various impression management strategies to enhance legitimacy in the eyes of prospective diversity‐sensitive employees. We find four “Ps” of diversity‐related institutional logics—protect, profit, profess, and promote—all of which are at play in accounting firms' websites. Further, we find that diversity is far from being an institutionalized concept. Copyright © 2015 ASAC. Published by John Wiley & Sons, Ltd.     

Ethics and self-regulation for CPAs in the U.S.A.

This paper explores three questions: (1) Why should Certified Public Accountants (CPAs), as a group, adhere to their code of ethics? (2) Why should an individual CPA adhere to the code? (3) Of what significance are the answers to these questions in regards to possible changes in the accounting curriculum and the CPA profession's present concern for self-regulation through quality control reviews? The paper concludes that all college accounting majors should be required to take an ethics course and that the current quality review program should be mandatory, not voluntary.     

Confidentiality decisions: The reasoning process of CPAS in resolving ethical dilemmas

As in other professions, such as law and medicine, accounting has a Code of Professional Conduct (Code) that members are expected to abide by. In today's legalistic society, however, the question of “what is the right thing to do,” is often confused with “what is legal?” In many instances, this may present a conflict between adhering to the Code and doing what some may perceive as proper ethical behavior. This paper examines (1) the reasoning process that CPAs use in resolving ethical issues related to confidentiality; and, (2) whether or not there is a perceived conflict in adhering to the Code and the moral values of some CPAs. The results indicate that although most CPAs sampled resolve ethical issues in accordance with the Code, such decisions do not always reflect their belief of what is morally right. Although the results are useful in understanding how some CPAs reason in making moral choices involving confidentiality decisions, care should be exercised in drawing further inferences from this study due to the limited sample size.     

Whistle Blowing and Rational Loyalty

Today's complex and decentralized organization gives rise to organizational needs for both loyalty and institutionalized whistle blowing. However, ethicists see a contradiction between both needs. This paper argues there is no such contradiction. It shows why earlier attempts to go beyond the dilemma are not satisfying. The solution proposed in this paper starts from an organizational perspective instead of an individual one. It does so by reframing the concept of loyalty into “rational loyalty”. This means that the object of loyalty is not the physicality of an organization, but its corpus of explicit mission statement, goals, value statement and code of conduct. An implication is that organizations are – as their side of the duty of loyalty – obliged to institutionalize whistle blowing.     

On the Middle Income Trap,the Industrialization Process and Appropriate Industrial Policy

In the 1960s, Kaldor defined the manufacturing sector as the engine of growth, suggesting that industrialization might help accelerate growth rates in low income economies. This is still relevant in today’s world, where growth rates in countries in the middle income trap slow down, extending their time in the trap. In some of these economies, industrialization slows down while others face “premature deindustrialization.” Adding to this scenario, this paper describes, in Kaldorian fashion, the streamlined features of industrialization, technical capabilities and technical progress, which offer explanations as to why sectoral industrial policies are necessary in releasing countries from the trap. It presents a taxonomy of industrial policies and discusses how industrial policy and science, technology and innovation policies should be sequenced along the process of industrialization. Finally, the paper develops a methodology to identify the “strategic” sectors on which industrial policy could focus.     

How host organizations prepare for and learn from expatriate assignments

This article reveals what goes on inside host organizations prior to and during expatriate assignments. On the basis of analyzing organizational documents and conducting 43 interviews with host country nationals (HCNs) and expatriates in 30 Vietnamese organizations that host external foreign assignments, we provide a detailed account of HCNs' experiences and unearth sophisticated preparation and management activities designed to maximize these organizations' learning. We depict what we call “a host organization lifecycle” and extract five lessons: (a) host organizations prepare carefully in advance to learn as much as possible from expatriates; (b) HCNs experience quite dramatic adjustments and burdens during expatriates' placements; (c) mutual trust between expatriates and HCNs is a prerequisite for HCNs' learning; (d) most of HCNs' learning occurs informally via interactions with expatriates or observing how they work; (e) host organization managers actively manage HCN–expatriate relationships. Our findings outline a “wish list” of practices that expatriate‐using organizations could consider deploying for expatriate assignments that focus on the benefit of the host organization' development.     

Limits to learning from the west: How western management advice may prove limited in Eastern Europe

The West's aid to the emerging Eastern European economies includes consultancy and education. This will have considerable impact on their economic and managerial activity, even though the theories of organization and management on which it is based are much criticized here. As these theories are applied in the extreme economic, social and political circumstances of the Soviet collapse, we are likely to be both surprised and pushed into a period of critical organizational theorizing. Much of the criticism comes from institutionalists who reject a generic approach to economics and management. They argue instead that organizations are embedded within a specific environment of social, legal, economic, and technological institutions which fashion their activities. They are saying “things are different over there and we should recognize that our advice presumes our own institutional arrangements.” The first part of this study reviews the reasoning behind this critique. It has two threads: (a) the institutional context and the way that shapes economic transactions and their costs; and (b) the way institutions develop as collective responses to social uncertainties. We look at organization theory's dependence on the social institutions, such as contract law, professional training, and the market for insurance. We take these and many other Western institutions for granted, and seldom stop to analyze them. In Eastern Europe, managers lack such institutional infrastructures and face uncertainties beyond our experience. This article's second part focuses on the processes by which organizations respond to uncertainties. There are many types of uncertainty and we pick out that of adopting a new technology. Problems arise because of “gaps” between the organization's in-place work practices, knowledge, and attitudes, and those which they must eventually adopt if they are to use the new technology effectively. Recent research into workplace know-how suggests that such gaps are bridged by workers developing a new “tacit” understanding of the technology through learning-by-doing. This knowledge generation (KG) works best when it is also communal, when creative teams form. By definition, this kind of team cannot be managed bureaucratically, in ways that depend on an understanding of the task in hand. We see that bureaucracy is a theory of knowledge application (KA) which breaks down in the absence of the necessary knowledge, rules, measurements, communications, and sanctions. Creative teams can operate under the conditions of bureaucratic failure because they are held together by institutional forces rather than by rational administration. The context of social institutions outside the organization becomes important because it defines the institutional bases for such teams. In the final section we look beyond creative teams as internal uncertainty resolvers. The new institutional economists argue that firms should internalize the uncertain transactions that are difficult to contract, and so precipitate market failure. We suggest that entrepreneurs also look outside the firm at those social institutions which enable them to externalize uncertainties. In general, the institutionalist critique reveals that entrepreneurs have several domains of action. The formal KA part of the firm, the focus of classical organization and management theory, is but one of these domains. Other equally important KG domains lie both within the firm and in the interorganizational networks and social institutions beyond its boundaries. The uncertainties of the Soviet collapse move us on from the simplicities of Western organization theory toward a richer set of ideas more relevant to our Eastern European colleagues—and to ourselves.     

The East Asian model and the Baltic states

The three Baltic states of Estonia, Latvia and Lithuania had higher national incomes than most of the other states of the USSR. The “Southeast Asian miracle” economies often did not reach comparable levels until the 1980s. Now that the Baltic states have regained independence, are there any lessons to be drawn from the experience of the “tigers”?     

Institutionalizing Ethical Innovation in Organizations: An Integrated Causal Model of Moral Innovation Decision Processes

This article answers several calls—coming as well from corporate governance practitioners as from corporate governance researchers—concerning the possibility of complying simultaneously with requirements of innovation and ethics. Revealing the long-term orientation as the variable which permits us to link the principal goal of organization, being “survival,” with innovation and ethic, the article devises a framework for incorporating ethics into a company’s processes and strategies for innovation. With the principal goal of organizations being “survival” in the long-term, it is assumed that innovation is necessary in order to realize a going concern. Firms that do not innovate and adapt to rapidly changing business environments are less likely to be sustainable. Thus, it is in a business’ best interests to adopt an innovation process for long-term success. We posit that there are two simultaneous sources of innovation and change that are unavoidable and embedded in the corporate landscape. First, we argue for genetically embedded, Darwinian explanations for adaptations that enable an entity’s survival. This view is combined with more conventional, social science explanations for change. Our new, comprehensive model of the governance of innovation processes hinges on the one hand on an organization’s long-term orientation, which we argue, is not possible without a consideration of an ethical dimension. On the other hand, the model employs, for the first time, the concept of duality, in order to make the positive coexistence of innovation and ethic analytically visible. Guided by this concept the roots of the ethic within innovation are traced from both natural science forces for change, and cultural pressures operating on members of an organization. We present our Integrated Causal Model of Innovation and propose theoretical relationships that will generate numerous avenues for future research in the field, and help managers to reorient their governance strategies.     

虚拟企业中的内生交易费用

虚拟企业是由于专业化与分工进一步深化而产生的一种新的企业组织模式。采取虚拟企业这种组织模式能够在社会范围内获得专业化经济与分工经济的好处。但是在获得这种好处的同时 ,虚拟企业也在社会范围内增加了交易费用。这里从博弈论的角度分析了虚拟企业中的内生交易费用是如何在合作成员企业间产生的。     

Marketing by CPAs

Abstract

Until the late 1970s, the AICPA discouraged commercial advertising and some other marketing tactics by practicing accountants. This study contacted 600 CPAs in the U.S. in an attempt to discover what kinds of marketing they employ, how useful they think it is, and how appropriate do they feel the AICPA's rules and regulations are in regard to marketing an individual CPA's services. Most thought the AICPA was fair. Accountants doing the most marketing tend to be younger males. “Conflict of Interest” was the area of most current concern in light of the ongoing problems of public accounting firms doing both auditing and consulting for the same client. “Newspaper” was the preferred advertising medium. Most of those surveyed were pleased the AICPA relaxed its restrictions on marketing and advertising, even though many CPAs still do not market their services to any great extent. This may change as younger accountants fill leadership positions in U.S. accounting firms.