An Examination of the U.S. Public Accounting Profession’s Public Interest Discourse and Actions in Federal Policy Making

Participation in the political process by the United States public accounting profession often blurs the role of the profession as advocates for the public interest with its role as advocates for its own private interests. In this study, we draw from prior theoretical and empirical work to investigate recent federal political activities of the public accounting profession to shed light on these sometimes contradictory roles. In particular, we investigate ten contemporary regulatory issues of interest to the AICPA. We analyze 36 AICPA legislative advocacy letters related to these issues that were provided to federal policy makers. In addition, we analyze the public accounting profession’s federal lobbying reports that were submitted during this same time period. The analysis allows us to assess the public interest discourse present in the AICPA legislative letters as well as the extent of political action taken by the profession related to these issues based on the profession’s lobbying efforts. Our analyses (1) demonstrate that the profession’s discourse and actions often reflect both public and private interest motivations, (2) allow us to categorize the profession’s advocacy efforts as arising from specific motivations, and (3) show that the profession’s public interest arguments used to advocate for their policy positions change depending upon the specific legislative issue being considered.     

Ethical Decision Making in the Public Accounting Profession: An Extension of Ajzen’s Theory of Planned Behavior

The purpose of this study is to expand our understanding of the factors that influence ethical behavioral intentions of public accountants. Recent scandals have dominated the news and have caused legislators, regulators and the public to question the role of the accounting profession. Legislative changes have brought about major structural changes in the profession and continued scrutiny will surely lead to further changes. Thus, developing an understanding of the personal and contextual factors that influence ethical decisions is critical. An extension of the theory of planned behavior [Ajzen, I.: 1985, Action Control-From Cognition to Behavior (Springer, Heidelberg)], the model used in this study examined the influence of personal, social and organizational factors on ethical intentions. Specifically, the individual level model tested direct effects of attitudes, subjective norms, perceived behavioral control, moral sensitivity and ethical climate. Professionals from five accounting firms completed a survey that measured responses to ethical dilemmas related to the public accounting domain. To minimize the potential impact of common method bias, the survey instrument was administered in two phases. Hypotheses were evaluated using a structural modeling technique, partial least squares. Results show strong support for a direct relationship between attitudes and ethical intentions. The proposed direct effect of subjective norms was not supported. However, a significant relationship between subjective norms and attitudes was found. Professionals’ attitudes towards ethical issues clearly influence intentions. Moreover, this study illustrates the potential influence of social factors in attitude formation. Future research should explore the factors in the public accounting domain that most strongly influence attitude formation. This study suggests that the theory of reasoned action offers a useful framework for exploring these issues.     

The Accounting Standards Setting Process in the U.S.: Examination of the SEC–FASB Relationship

In the U.S. there is a close relationship between the Securities and Exchange Commission (SEC), a governmental agency legally responsible for setting accounting standards, and the Financial Accounting Standards Board (FASB), a private sector body to whom the SEC has delegated this responsibility. In this paper we examine the influence of the SEC on the FASB as evidenced by all major statements issued by the FASB. Minor statements, amendments, and strictly technical pronouncements were omitted because of their limited exposure to the political process. Our analysis reveals that the SEC applied substantial pressure on the FASB in the standard setting process and has not adopted a position of benign neglect.     

Discussion of “Recognizing Ethical Issues: An Examination of Practicing Industry Accountants and Accounting Students”

Although the political and consumer consciousness has turned increasingly green, many firms continue to resist the adoption of environment-friendly technological innovations—even in the face of higher costs, negative health effects, and stricter government oversight. This article examines how business owners weigh the trade-offs associated with environment-friendly innovations by examining the role of prosocial motivation in their decision-making process. We use primary data to overcome a common restriction in studying environmental innovations—the scarcity of relevant data—to analyze how business owners’ expectations, perceptions, and motivations affect innovation in organizational processes and, consequently, the level of environmental friendliness of their products or services. We found that prosocial motivation had a significant negative impact on innovation adoption and that it is expressed differently under high and low levels of customer compatibility—possibly because business owners have a larger number of competing social objectives and priorities. Our results further showed that the innovation’s ability to satisfy downstream customer demands has the greatest impact on environment-friendly innovation adoption decisions by business owners. This study enhances our understanding of how business owners make innovation decisions based on competing business, environmental and social objectives and provides a foundation for future research in this area.     

Discussion of “Does the Accounting Profession Discipline Its Members Differently after Public Scrutiny?” by D. F. Mescall,F. Phillips,and R. N. Schmidt

The paper by Mescall et al. (J Bus Ethics, 2016) provides an opportunity to consider the meaning of “accounting professionalism” in the twenty-first century. To examine the paper, this discussion focuses on three areas, the research question Mescall et al. addresses, contributions of their paper, and what the paper tells us about accounting professionalism.     

An Analysis of U.S. Multinationals’ Recruitment Practices in Mexico

The frequency of discriminatory language in job advertisements placed by U.S. multinational corporations operating in Mexico was compared with that of Mexican companies using content analysis. A sample of 300 ads placed by companies from each culture was analyzed and coded by two groups of coders to calculate the frequency of discriminatory language in the job ads with respect to age, gender, physical appearance and marital status. Results of a chi square analysis revealed that U.S. multinationals firms in Mexico utilize discriminatory language in job ads less frequently in the categories of age, gender and marital status. This result suggests that the legal and cultural framework of the country of origin of U.S. enterprises in Mexico may be influencing their actual recruitment practice in Mexico, and in turn, help them in setting a positive example of non-discrimination in recruitment among their Mexican counterparts.     

What’s in it for Me? An Examination of Accounting Students’ Likelihood to Report Faculty Misconduct

Since there are so few controls over detecting and preventing faculty misconduct, one of the most common ways in which it is discovered is through student reports (in other words, whistleblowing). Given the importance of student reports in bringing to light faculty’s ethical lapses, this paper seeks to understand what factors influence students’ likelihood to report faculty misconduct. We develop an empirical model that integrates the decision process of the Prosocial Organizational Behavior (POB) Model with insights from the emotional perspective on whistleblowing. Specifically, we use an experimental survey to examine how students’ perceived unfairness of the faculty misconduct, feelings of anger, and the students’ self-interest in the situation in conjunction with situational “cues for inaction” lead to the intention to blow the whistle. Overall, the results from our structural model partially support our theoretical model. Interestingly, these findings demonstrate that, in the case of faculty member misconduct, anger and perceptions of unfairness play a greater role than the more rational cost-benefit process of the POB model. These results could aid in development of ethics education for students and could also inform the development of university policies that encourage students to come forward when faced with faculty misconduct.     

Colombian consumers’ outshopping of apparel in the U.S.

Outshopping is defined as purchasing goods outside of consumers’ trading areas. Despite threatening local economies, outshopping generates opportunities for the new trading areas in which it occurs. Studies on outshopping have reported contradictory results and academics suggest further research, especially in relation to consumers’ micro-level characteristics. Moreover, few studies have focused on the U.S. as the trading area and apparel as the traded product. Based on the theory of reasoned action, this quantitative study explores how attitudes toward international outshopping and subjective norm influence purchase intention of apparel goods among international outshoppers in the U.S. by focusing on four characteristics of international outshoppers – self-control in terms of spending, the desire for unique products, age, and gender – as antecedents of attitudes toward outshopping. Colombian consumers (South America) were chosen as respondents because market reports indicate that the U.S. is their top favorite international tourist destination. Findings suggest that more positive attitudes toward outshopping apparel in the U.S. were found among female consumers with higher self-control over their expenditures. Respondents were also influenced by the opinion of others; while age and desire for unique products were found non-significant. By understanding international outshoppers, marketers can develop unique market strategies for attracting global consumers.     

Are Conglomerates Less Environmentally Responsible? An Empirical Examination of Diversification Strategy and Subsidiary Pollution in the U.S. Chemical Industry

This paper is an attempt to address the limited amount of research in the realm of organizational ethical climate in the not-for-profit sector. The paper draws from Victor and Cullen's (1988) theoretical framework which, combines the constructs of cognitive moral development, ethical theory, and locus of analysis. However, as a point of departure from Victor and Cullen's work, the authors propose an alternative methodology to extract ethical climate dimensions based on theoretical considerations. Using the Ethical Climate Questionnaire (ECQ), an exploratory factor analysis is conducted followed by a confirmatory factor analysis using LISREL. The resulting five dimensions are labelled as: individual caring, machiavellianism, independence, social caring, and law and code. Findings provide a somewhat disparate perspective of the ethical climates in a not-for-profit context. First, there is a more discriminating perception of benevolent climate than its for-profit counterpart. Second, the dimensions are polarized between the individual and the cosmopolitan loci of analysis. These findings are then discussed with implications and direction for future research.     

Review of Reflections on Allan H. Meltzer’s Contributions to Monetary Economics and Public Policy

Business Economics -     

U.S.to Continue Tightening Trade Policy on China——A review of the establishment of the U.S.Interagency Trade Enforcement Center

U.S.President Barack Obama signed an executive order on February 28,2012 to set up Interagency Trade Enforcement Center (ITEC) in a bid to coordinate with U.S.trade rights,and domestic trade laws enforcement matters.This can be seen as a more tightening protectionism sign for U.S.bilateral trade relation especially with China.As stated in the executive order,the purpose of the Center is to advance U.S.foreign policy and protect the national and economic security of the United States through strengthened and coordinated enforcement of U.S.trade right under international trade agreement and enforcement of domestic trade laws.     

COVID-19’s impact on the U.S. labor market as of September 2020

Business Economics - This paper summarizes the impact of COVID-19 (through mid-September 2020) on the U.S. labor market through the lens of measures found in monthly Bureau of Labor...     

Relationship Marketing and Repurchase Intention in Ghana’s Hospitality Industry: An Empirical Examination of Trust and Commitment

Globally, the hospitality industry ranks as one of the most competitive business sectors, with competing organizations relying on a cocktail of strategies such as relationship marketing to stay relevant, and attract and retain customers. This article examines how relationship marketing impacts trust, commitment, and repurchase intension of customers in the Ghanaian hospitality industry. The data collection questionnaire was administered to 167 randomly selected customers at a four-star hotel in the Accra metropolis. The data analysis used structural equation modeling to ascertain the significance of the relationship that exists between trust, commitment, and customer repurchase intension regarding the relationship marketing practices of hoteliers in Ghana. The findings show a positive and significant relationship between trust, commitment, and repurchase intension. The study also revealed that commitment partially mediates the association between trust and repurchase intension. This implies that both trust and commitment are necessary to attain repurchase and, eventually, loyalty.     

Can Spending Time in the Minors Pay Off? An Examination of the Canadian Junior Public Equity Markets

This paper tests whether the junior public equity markets serve as an effective development market for early‐stage firms compared to private venture capital (VC). Focusing on the Canadian market, we compare the long‐run stock performance of firms that graduate from the Toronto Venture Stock Exchange (TSX‐V) to the Toronto Stock Exchange (TSX) against the performance of VC‐backed firms that have a direct IPO on the TSX. Controlling for various confounders and possible selection biases, we find that TSX‐V graduations significantly outperform VC‐backed IPOs by 28.2 percentage points in the three years following the TSX listing. Our results are consistent with the idea that a TSX‐V listing provides the insiders of early‐stage companies with valuable public‐markets experience.     

Regulation and the Promotion of Audit Ethics: Analysis of the Content of the EU’s Policy

Accounting literature has commonly judged the impact of regulation on auditors’ ethical commitment by studying daily audit practice. We argue that the content of the regulations themselves is an important determinant of such an impact. This paper evaluates the capacity of the content of regulation to promote audit ethics by reference to the European Union’s (EU) audit policy. Anchored in the extant conceptual perspectives on ethics, our analysis of relevant policy documents shows that the EU’s approach to audit ethics relates most strongly to the deontological perspectives on ethics and leaves largely unexplored other means of promoting auditors’ ethical stance, such as by stimulating virtue ethics. We find that it is the EU regulators’ restricted view of the conceptual foundations of audit ethics that limits the capacity of their policy to effectively stimulate auditors’ ethical commitment. The paper also discusses the potential implications of our analysis for the design of future audit policy.     

The Strength of an Accounting Firm’s Ethical Environment and the Quality of Auditors’ Judgments

This study examines the impact of the strength of an accounting firm’s ethical environment (presence and reinforcement vis-à-vis the presence of a code of conduct) on the quality of auditor judgment, across different levels of audit expertise. Using a 2 × 2 full factorial ‹between subjects’ experimental design, with audit managers and audit seniors, the impact of different levels of strength of the ethical environment on auditor judgments was assessed with a realistic audit scenario, requiring participants to make judgments in respect of an inventory writedown. Based on prior research, and as hypothesized, participants possessing greater auditing experience made higher quality technical judgments. While there were no significant differences between the quality of audit judgments made by participants in the stronger ethical environment, over-all results indicate that managers are more sensitive to differences in the strength of the ethical environment than seniors. This is consistent with the hypothesis, and with prior research which suggests that the impact of the code will only be significant if it has been bilaterally internalized by individuals. This has important implications for accounting firms and regulators, given that the International Standard on Quality Control 1, requires the communication and reinforcement of ethical principles as part of firms' quality control processes. It suggests that firms will need to carefully consider the means by which they communicate and reinforce ethical principles, as it is possible to differentially impact auditors of different rank.     

A Note on the Incidence and Possible Cost of “Critical Circumstances” Penalties in U.S. Antidumping Enforcement

This article examines the incidence and possible cost of “Critical Circumstances” penalties in U.S. antidumping enforcement. Critical Circumstances penalties are surprisingly common. Of the 297 foreign firms that were assessed antidumping duties greater than 25% during the period 1980–1995, 89 (or 30%) were also assessed a Critical Circumstances penalty. The volume of imports affected by these Critical Circumstances penalties was approximately $991 million over the 15 year period (or about $66 million per year). The average level of the Critical Circumstances penalties was about 79% of the value of the relevant commerce, assessed for a period of up to 90 days, or as much as $13 million per year. The economic cost to the United States from Critical Circumstances penalties comes largely from the reduction in export levels (increase in prices) that foreign firms may make in the expectation that a Critical Circumstances penalty may be assessed. The article presents evidence that foreign firms have restricted their exports to the United States to avoid or minimize Critical Circumstances penalties, and discusses a simple model that may illustrate how foreign firms react to the possibility of such penalties.     

Who Survives in Japan? An Empirical Analysis of European and U.S. Multinational Firms in Japanese Manufacturing Industries

This paper provides new evidence on exit patterns of European and U.S. firms in Japanese manufacturing industries. Specifically, the paper tests two sets of hypotheses: (1) Japans distinctive business institutions and practices work against foreign firms and constitute a barrier to operate in Japan; and (2) the international configuration of business activities of foreign firms determines their post-entry performance in Japan. Using a new sample of 366 subsidiaries established during the 1973–1994 period in Japan, the paper finds, most importantly, that the exit pattern of foreign firms in Japan is influenced significantly by the industry-specific factors that determine infant mortalities and the subsidiary-specific factors that determine the subsidiarys international activities. On the contrary, this paper finds that Japans distinctive business practices are less likely to affect the exit pattern.     

Assessment of the Economic Benefits From U.S. Meat Export Federation (USMEF)’s Marketing Investment in South Korea

In 2007, the United States and South Korea agreed for partial access of U.S. beef to South Korea under the Korea–U.S. (KORUS) FTA concession, and started to import sizable U.S. beef to South Korea in 2008 despite some negative sentiments of Korean consumers for U.S. beef due to the safety concerns. From 2011 to 2015, the USMEF is scheduled to invest approximately US$10 million on promotion of U.S. beef in South Korea. Thus, it is important to access effectiveness of USMEF promotional strategies and to justify accountability of its marketing investment in the Korean beef market. The objective of this study is to estimate the economic impact of USMEF marketing investment for beef on U.S. beef performance in South Korea. The study determines the effectiveness of USMEF’s generic beef market development and promotion program in South Korea, by developing an econometric import demand model for U.S. beef and eliciting benefit–cost ratio (BCR) of USMEF’s promotion investment. From this analysis, (1) the relationships between selected uncontrollable and controllable economic variables and the U.S. beef demand in South Korea are assessed; and (2) with BCR simulation analysis, the return on promotion investment (ROI) of USMEF is derived.