Corporate Ethical Values Research Articles

Impact of External Auditors’ Ethical Behavior on Audit Quality: A Client Perspective

Purpose: This study explores the impact of external auditors' ethical behavior on audit quality, with a particular focus on the perspectives of internal auditors in publicly listed Pakistani companies. It aims to address the gap in literature concerning the interplay between ethical behavior, corporate ethical values, and perceived audit quality. Design/Methodology/Approach: Using Structural Equation Modeling (SEM), the study examines the direct and indirect effects of external auditors' ethics on audit quality, with corporate ethical values as a moderating factor. Data were collected via a mail survey and Google Forms from auditors in listed Pakistani firms, yielding 232 usable responses (61% response rate). The analysis utilized SPSS and AMOS for reliability, validity, factor analysis, regression, and correlation. Findings: Results reveal a positive relationship between ethical behavior and perceived audit quality, amplified by strong corporate ethical values. Companies prioritizing ethics reported enhanced audit quality, providing valuable insights for regulators and auditors. Implications/Originality/Value: This research contributes to the understanding of ethical behavior in audit quality, offering actionable insights for improving ethical standards in audit practices. The findings are pertinent for regulatory bodies, auditors, and policymakers aiming to strengthen financial disclosure integrity in Pakistan

New ethical frontier: exploring the nexus of techno-ethical orientation and corporate ethical values moderated by digital citizenship behaviour

PurposeIn the information and technology age, where the “physical” world is merged with the “digital” world, the nature of social conditions, relations, citizenship and the flow of information has shifted from a moral and legal approach to a digital approach. Nowadays, the functioning, dissemination, conduct and governance of organisations and their members are regulated by techno-ethical and digital principles. Drawing on social cognitive theory, the study hypothesises that techno-ethical orientation predicts corporate ethical values (CEV) through the moderation of digital citizenship behaviour (DC). The study further proposes that each dimension of DC: online respect (OR) and online civic engagement (OCE), moderates the hypothesised relationship.Design/methodology/approach546 respondents from India participated in the study. The responses were captured using structured and well-established questionnaires. The analysis was performed using robust measures of correlation, regression, reliability (Cronbach’s alpha and composite reliability) and validity (convergent and discriminant validity). The moderation influence of DC was tested and analysed using structural equation modelling (SEM) Analysis of Moment Structures (AMOS).FindingsThe regression findings of the study revealed that the techno-ethical orientation positively predicts the CEV. R-square values showed a 24.1% variation in corporate ethical value was explained by techno-ethical orientation. It indicates that a positive techno-ethical orientation establishes the ethical context and corporate values. Besides, the moderation analysis using SEM AMOS indicates that at both low and high levels of OR and OCE, the relationship between techno-ethical orientation and CEV is positive and significant.Originality/valueThis study demonstrates a new facet of technology ethics that promotes the institutionalisation of CEV through DC. This study is the first to explore the interaction between techno-ethical orientation and CEV. Even though various former factors concerning ethical conduct have been examined, the results of the techno-ethical conduct of employees within the scope of an organisation have not been explored so far.

The Determinants of Ethical Judgments at Local Government Agencies

To ensure survival during the digital technologies’ transformation, an organization must pay attention to ethics implemented in the organization and its employees. Ethics supports transparency in financial and sustainability reporting, ensuring that information provided to stakeholders is accurate and honest. This study focuses on the determinants of ethical judgements in local government agencies. This study aims to examine the influence of educational qualification, current position, corporate ethical values, moral idealism, and moral relativism towards ethical judgments of the head and staff of accounting/finance division at local government agencies in South Sumatera. The subjects of this study are the head and staff of accounting/finance division at local government agencies in some regencies in South Sumatera. The samples consist of 100 respondents, selected using a purposive sampling method. The primary data were obtained by distributing questionnaires directly to the respondents. The data analysis used is Partial Least Square using SmartPLS version 3 as an analysis tool. The results of this study indicate that educational qualification and current position does not have significant influence towards ethical judgments. Meanwhile, corporate ethical values, moral idealism, and moral relativism have a positive influence towards ethical judgments.

Corporate ethical values disclosure: evidence from Malaysian and Indonesian top companies

PurposeThis paper aims to examine the extent of ethical values information disclosure on the top 100 Malaysian and Indonesian companies’ annual reports using coercive isomorphism under the institutional theory.Design/methodology/approachUsing the content analysis, the presence or exclusion of ethical values information disclosed on 100 Malaysian and Indonesian companies’ annual reports using a newly developed Ethical Values Disclosure Index is carried out.FindingsThe results of the analysis found that Indonesian companies on average disclosed 31 items under study compared to 27 items disclosed by the companies in Malaysia. The results suggest that Indonesian companies are more vigilant in the code of ethics, companies policy on ethical issues, monitoring program and accountability, ethical performance, ethical infrastructure and organizational responsibility aspects, whereas their Malaysian counterparts are better in reporting governance and integrity committee or board of directors.Research limitations/implicationsThe findings may not be applicable to other countries in the same region, nevertheless, revealed the importance of adequate ethical values disclosure in determining the level of ethical behavior.Practical implicationsCompanies in Indonesia are coercively pressed by various influential stakeholder groups to address ethical issues. The less disclosure regarding corporate ethical behavior may indicate that unethical practices continue to be a problem in the Malaysian corporate sector.Originality/valueThis paper adds to the literature by examining the elements of ethical values adapted mainly from the professional bodies that regulate the accounting profession and other organizations using the institutional theory, particularly in two countries.

Decoding supplier codes of conduct with content and text as data approaches

AbstractThis study analyzes supplier codes of conduct of multinational firms, with two main research objectives: (1) providing a description of supplier codes' content provisions, specifically focusing on the labor standards provisions included in these self‐regulatory policies, and (2) comparing code content across regions and sectors. To this end, the study uses hand‐coding and novel text‐as‐data techniques for content analysis of a large sample of 880 codes of conduct. Results show that a standardized list of labor rights is included in up to 90% of the aforementioned codes, regardless of the location or sector of the drafting company. Codes are drafted with a clear influence from internationally recognized standards, even though a minority of codes directly refer to international texts. However, the similarity of codes is limited as they differ in length and extent to which they elaborate certain topics. This latter aspect is correlated with the firms' location and the sector they operate in. The research demonstrates that European companies refer to the legal framework and international standards extensively, while American companies more often develop their corporate ethical values or focus on governance and their relationship with suppliers. It also empirically shows that companies evolving in reputation‐sensitive sectors are developing more specific codes including more detailed labor provisions.

Education integrity survey: A suggested measurement of integrity in education sector

Integrity as a concept is usually associated with and measured by one of two separate scopes: personal or organizational. This paper argues that in educational institutions such as schools or universities, integrity measurement should not be done by separating personal and organizational concepts. In addition, integrity in education sector is often discussed just from academic perspective such as cheating, plagiarism or other wrongdoings in classroom or research activity. The measurement concept in this paper also includes non-academic aspects such as administrative services, financial management, and procurement. Educational integrity in this paper combines three concepts which are the character dimension (Istiani, 2015), the Corporate Ethical Value model (Kaptein, 2007), and the classification of corrupt behaviors in education compiled by KPK from various resources (2018). To conclude, the concept of educational integrity should be looked as holistic one which can be assessed from the integrity character of students, the ecosystem that influences them, and also the compliance level of school’s governance. This offered concept tries to fulfill the strategic role in encouraging educational stakeholders to massively and systematically evaluate the achievement of integrity improvement in the education sector, including the human capital result.

Antecedents and effect of creative accounting practices on organizational outcomes: Evidence from Bangladesh

This study examines the antecedents and effects of creative accounting practices (CAP) on organizational outcomes in Bangladesh. Thus, this research recognizes the antecedents of creative accounting, such as sustainable financial data (SFD), political connections (PC), corporate ethical values (CEV), future company orientations (FCO), and corporate governance practices (CGP). And also examine how the quality of financial reporting (QFR) and decision-making effectiveness (DME) are influenced by CAP. This study incorporates these fundamental antecedents of creative accounting practices on organizational outcomes by collecting survey data (n = 354) from publicly traded companies in the Dhaka Stock Exchange (DSE), Bangladesh. The study model has been tested through the “Partial Least Square- Structural Equation Modelling” (PLS-SEM) technique using Smart PLS v3.3 software. In addition, we pass various model fit measures, i.e., reliability, validity, factor analysis, and goodness of fit. This study finds that SFD does not work as an antecedent of creative accounting practices. But, the outcomes of the PLS-SEM confirm that PC, CEV, CFO and CGP work as an antecedent of CAP. Furthermore, the results of PLS-SEM also confirm that CAP influence the QFR in the positive direction and CAP influence the DME in the negative direction. Finally, QFR has a positive and significant impact on DME. Any study that has tested the impact of CAP on QFR & DME is yet to be found in the literature. However, policymakers, accounting bodies, regulators, and investors can consider these findings to formulate policy and investment decisions. Mainly, organizations can focus on PC, CEV, CFO and CGP to reduce CAP. But organizations need QFR and DME, which are critical components of organizational outcomes.

The Influence of the Code of Ethics and Corporate Ethical Values on the Ethical Judgment of Auditors: Evidence from Vietnam

Abstract Accounting fraud and auditing fraud are important areas of research that have both theoretical and practical implications. A strong and sound code of ethics and ethical values are in place in order to prevent these frauds. The study investigates the impact of the code of ethics and audit firms’ corporate ethical values on auditors’ ethical judgment in Vietnam. Based on questionnaires collected from Vietnamese auditors, the results of the study indicate that the code of ethics for professional accountants has a significant influence on the auditors’ ethical judgment. Whereas the finding only shows minor support for the influence of the audit firms’ corporate ethical values on the auditors’ ethical judgment. The study has implications for audit firms and professional bodies in their continuous efforts to promote understanding and compliance with the code of ethics and develop a strong corporate ethical culture in the firms.

How can companies promote ethical behavior and organizational citizenship behaviors? The influence of corporate ethical values

In the current review, a model of precursors and results of moral conduct in work associations was created and tried. Precursors included are corporate moral qualities, authoritative equity, and hierarchical responsibility. The result of hierarchical citizenship ways of behaving was additionally analyzed. Information was assembled from 489 individuals from a local part of the Public Relationship of Buying Directors (NAPM). Primary condition demonstrating was utilized to test the model. Results showed the information fit the model well. Suggestions for administrators and headings for future exploration are examined.

Corporate ethical values and ethical work climate influences on employees’ helping behaviour in a developing country’s banking sector setting

This study investigated the influence of corporate ethical values and work ethical climate on employees’ helping behaviour. A convenience sample (n= 421) of employees at a bank in the Democratic Republic of Congo were participants (female = 32.5%). The employers completed the following standardised measures: The Corporate Ethical Values Scale (CEVS), the Work Ethical Climate Questionnaire (WECQ), and the Employees’ Helping Behaviour Scale (EHBS). The structural modelling analysis results indicated employee perceptions of corporate ethical values and work ethical climate to predict their helping behaviour, overall. Additionally, the results indicate that corporate ethical values and caring, rule, and instrumental were predictive of helping behaviour. Furthermore, the results indicate higher levels of education and seniority to predict higher levels of ethical value and instrumental helping behaviours. Human resource managers should provide resources that support a pro-employee corporate culture for employees to have a sense of workplace ‘family’ belonging.

Factors influencing ethical judgements of accounting practitioners: some Malaysian evidence

PurposeThe purpose of this paper is to examine the extent to which demographic factors and corporate ethical value impact on ethical decisions of Malaysian accounting practitioners.Design/methodology/approachA questionnaire survey was carried out to elicit opinions from accounting practitioners on corporate ethical values and ethical judgements. Regression analysis was performed on 201 completed and useable questionnaires.FindingsThe regression analysis shows that corporate ethical value is a significant factor determining ethical judgements. Age is also a significant factor, with older accounting practitioners being stricter in their ethical stance. To a lesser extent, gender is also significant, with females exhibiting higher ethical judgements than males.Research limitations/implicationsThe regression model reports an adjusted R-squared of 19.2%, which suggests further work in this area is necessary to identify other determinants for (un)ethical judgements. A qualitative approach such as interviewing corporate players may shed light on other possible factors.Practical implicationsThe findings suggest that regulatory efforts have contributed towards a more ethically imbued corporate environment. The Malaysian Code on Corporate Governance (2012), which recommends corporations to have formalized ethical standards and women on corporate boards, appears to have positive influence on creating a more ethical working climate. In addition, the enactment of the Minimum Retirement Age Act (2012) also proves relevant in further promoting ethical judgements.Originality/valueThe study highlights the applicability of the theory of moral development to an Asian developing country, and that gender, age and corporate ethical values are complementary in influencing ethical judgements of accounting practitioners in Malaysia.

Achieving corporate sustainability performance: The influence of corporate ethical value, and leader-member exchange on employee behaviors and organizational performance

This study investigated how corporate sustainability performance can be attained through the interface of corporate ethical values and leader-member exchange, and how employees’ positive and negative behaviors can influence these relationships. A total of 310 data sets were collected and used to test our hypotheses. To assess the factorability of the variables, exploratory factor analysis was conducted, and confirmatory factor analysis was conducted to test the fit and validity of the measurement model. Then, the structural model proceeded to test the hypotheses. The results of this study found that employee behaviors can highly influence corporate sustainability performance. Depending on contextual or/and relational factors, employee behaviors can either encourage more organizational citizenship behavior or alleviate counterproductive work behavior. These findings demonstrate that it is critical not only to create an ethical working environment but also to develop quality relationships with direct managers.

In pursuit of corporate sustainability: factors contributing to employees' workplace behavior

PurposeAchieving sustainability is imperative for all businesses but perhaps even so more in fashion retail. As a vital group of stakeholders, employees interact with all other stakeholders and play a critical role in the sustainability of an organization.Design/methodology/approachThis study is to investigate internal and external factors that influence employees' harmful or useful behaviors based on the Social Cognitive Theory (SCT) of morality.FindingsThe findings show that employees' perceptions of the moral responsibility of achieving corporate sustainability both as an internal corporate ethical value and as an external factor influenced their organizational citizenship behavior, as well as their propensity toward displaying counterproductive workplace behavior. Higher quality relationships with managers were found to strengthen the relationship between corporate ethical values (CEVs) and organizational citizenship behaviors.Research limitations/implicationsThe objective of this study focused exclusively on the US fashion retail employees. Therefore, it is suggested that future research compares the cultural influences on employees as related to the moral responsibility of corporate sustainability.Originality/valueThis study is one of few studies which have explored the level of employees' perceived moral responsibility toward the notion of how corporate sustainability should be accomplished.

POSITIVE EFFECT OF ETHICAL BEHAVIOR, CORPORATE ETHICAL VALUE, AND IDEALISM IN THE WORKPLACE

Accountants who work in a company that adopted an excellent corporate ethical value are believed to have a higher idealism orientation of ethics. This study empirically examines the role of ethical behavior to influence the positive effect of corporate ethical value toward an accountant's idealism. By using a web-based survey, this study spread 100 questionnaires to accountants in Indonesia. The statistical analysis that is used for this research is the Structural Equation Model (SEM) with a Partial Least Squares (PLS) approach. This study result shows that there is a positive relationship between corporate ethical value and idealism, moderate by ethical behavior.

Machiavellianism and Corporate Ethical Values as Determinants of Accountants' Ethical Decision Making

This study aims to evaluate the extent to which ethical environment may moderate the negative effect of Machiavellianism towards accountants’ ethical decision making. Questionnaires are distributed to accountants work in various company in Jakarta. The study finds accountants with High Machs are more likely to take unethical actions, while corporate ethical values (CEV) may encourage accountant to act more ethically. However, CEV does not reduce the negative effect of Machiavellianism towards accountants’ ethical decision making. This study contributes to accounting literature by providing evidence on how weak ethical environment may trigger accountants to act unethically.

Ethical Practice Disclosure of Malaysian Public Listed Companies

The Malaysian corporate environment has been shocked by corporate scandals and poor performance among government-related companies, such as 1Malaysia Development Berhad (1MDB), Lembaga Tabung Haji (LTH), Felda Global Ventures (FGV) and Khazanah Nasional Berhad (KHAZANAH). Despite having strong corporate governance and being strengthened through Malaysia Code of Corporate Governance (MCCG), unethical practices and a lack of transparency remain a problem among Malaysian companies. The purpose of this paper is to examine the level of disclosure of ethical practices among Malaysian public listed companies. Ethical practice disclosure is measured using the modified Ethical Commitment Index (ECI) with six themes derived from the literature; notably, corporate ethical values, action to promote ethics, whistle-blowing policy, code of ethics, sustainability practices, and ethics committee. Through content analysis of the annual reports of 1,115 companies and five years’ observation (2012-2016), this study found there is a need to improve several aspects of ethical practice disclosure. The findings implied that companies supported the MCCG, with most of the companies complying with the recommendations of MCCG 2012 to uphold a high standard of ethical practice. However, supplementary practices, such as disciplinary action, programmes to support a code of ethics, whistle-blowers’ protection, and establishing an ethics committee, are still weak. The findings indicate that the level of ethical practice disclosure among Malaysian public listed companies remains low and raises concern that requires action by regulators. This paper contributes by providing insights into the disclosure of ethical practice among Malaysian public companies.

Corporate social responsibility (CSR) and its internal consequences on job performance

PurposeThe purpose of this study is to investigate the role of corporate ethical values on the relationship between corporate social responsibility (CSR) and work-related outcomes (organizational commitment (OC), organizational citizenship behavior (OCB) and in-role job performance) in the case of a Greek port logistics management services organization.Design/methodology/approachThe field research was carried out by using a structured questionnaire, which was based on empirically validated scales. Employees’ perception of CSR was measured by two dimensions (i.e. social, environmental).FindingsStatistical analysis (PLS-SEM) confirms the conceptual framework of the study. More specifically, results revealed the association of both CSR dimensions with CEV and OCB. However, CEV proved to act as a full mediating variable between CSR and OC. Thus, CSR impact on OC is realized only through the development of concrete corporate ethical values. Similarly, CEV influences in role job performance, only through OC and OCB.Research limitations/implicationsThis study is cross-sectional; thus, causality of the relationships under investigation cannot be justified. The cultural context should also be considered, as field research was conducted in a Greek port logistics organization, at a country suffering from deep financial recession.Originality/valueDiscussion of the importance of corporate ethical values and the underlying mechanisms of organizational policies and practices guiding CSR impact on crucial job-related outcomes.

How Corporate Ethical Values and Ethical Leadership Influence on Religious Commitment? A Study on Sharia Banks Indonesia

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How and When Does Leader Behavioral Integrity Influence Employee Voice? The Roles of Team Independence Climate and Corporate Ethical Values

Management literature has repeatedly shown that an absence of voice can have serious negative influences on team and organization performance. However, employees often withhold suggestions or advices when they have ideas, concerns, or opinions. The present study proposes leader behavioral integrity as a key antecedent of employee voice, and investigates how and when leader behavioral integrity influences employee voice. Specifically, we argue that leader behavioral integrity affects employee voice via team independence climate. In addition, we propose a moderating effect of corporate ethical values. The results from a study of 134 managers and 408 employees provide support for this moderated mediation model. Leader behavioral integrity positively affects employee voice via team independence climate, but only when ethical values are emphasized in organizations. These results suggest that leader behavioral integrity, along with team independence climate and corporate ethical values, is very important for fostering employee voice.

Why and when does job satisfaction promote unethical pro‐organizational behaviours? Testing a moderated mediation model

This study examined the relationship between job satisfaction and unethical pro-organizational behaviours (UPB) by testing a moderated mediation model that focused on how employees' belongingness mediates the relationship between job satisfaction and UPB and how corporate ethical values moderate this mediated relationship. Our investigation included 369 employees from different organizations in Southeast China. The regression analysis revealed that job satisfaction positively influences UPB through belongingness. In addition, a moderated regression analysis indicated that low corporate ethical values strengthen not only the effect of belongingness on UPB but also the indirect effect of job satisfaction on UPB. These findings deepen our understanding of UPB by showing that individuals with a high level of job satisfaction are more likely to engage in UPB through belongingness when corporate ethical values are low. Finally, the theoretical and managerial implications of these results are discussed.