Tax compliance is a concern to governments around the world. Prior research (Alm, J. and I. Sanchez: 1995, KYKLOS 48, 3–19) has attributed unexplained inter-country differences in compliance rates to differences in social norms. Economics researchers studying tax compliance in the United States (U.S.) (see for example J. Andreoni et al.: 1998, Journal of Economic Literature 36, 818–860) have called for more attention to social (as opposed to economic) influences on tax compliance. In this study, we extend this prior research (...) by explicitly examining the role of social norms [Cialdini, R. and M. Trost: 1998, The Handbook of Social Psychology (Oxford University Press, New York)] on tax compliance in three different countries. We test our research hypotheses using a hypothetical compliance scenario, which was administered in Australia, Singapore, and the U.S. There were differences in compliance rates and social norms among the three countries. Factor analysis of the social norm questions identified three distinct social norm constructs. Two of these factors were significant in explaining tax compliance behavior. The first and most influential factor was taxpayers’ own personal moral beliefs, along with the beliefs of those close to them (e.g., friends and important others). The second significant factor represented societal views of proper behavior. We conclude that social norms help to explain tax compliance intentions and why tax compliance rates are higher than would be predicted by strictly economic models. (shrink)

This study explores how financial executives retrospectively account for their crossing the line into financial statement fraud while acting within or reacting to a financialized corporate environment. We conduct our investigation through face-to-face interviews with 13 former C-suite financial executives who were involved in and indicted for major cases of accounting fraud. Five different themes of accounts emerged from the narratives, characterizing executives’ fraud immersion as a meaning-making process by which the particulars of the proximal social context and individual motivations (...) collectively molded executives’ vocabularies of fraud immersion. Our executives’ narratives portray their fraud entanglement as typically occurring in small, incremental steps. Their accounts expand our understanding of the influence of socialization on executive-level financial fraud beyond the individualized focus of the fraud triangle model. (shrink)

Most ethics studies employing accounting subjects have utilized the Defining Issues Test, generally finding the moral judgment abilities of accounting students and accountants to be less advanced than those of the general population. This study assesses the validity of the DIT by examining whether an individual can achieve a higher moral judgment score on the DIT by responding from the role of a political liberal. Accounting undergraduates, defining themselves as liberal, moderate or conservative, completed the DIT once from their own (...) perspective and once from either an "extremely conservative" or "extremely liberal" perspective.The results indicate that DIT scores can be influenced by an aspect of political ideology not reflecting maturation in moral judgment. Subjects decreased their moral judgment scores when responding to the DIT dilemmas from a conservative perspective. Contrary to moral development theory, subjects were able to increase their moral judgment scores when responding from the perspective of a political liberal. These results imply that, given the generally conservative political orientation of the profession, the DIT may systematically understate the moral judgment abilities of accounting students and accountants. (shrink)

This research consists of two studies with interrelated objectives. The purpose of the first study is to develop and validate scales measuring whistle-blowing subjective norms, attitudes, and intentions. The objective of the second study is to test a model of whistle-blowing intentions, motivated by the theory of reasoned action, across two contrasting cultures: the collectivist Thai and the individualistic American. To achieve cross-cultural comparisons, we first perform measurement and structural invariance tests. Tests of latent mean differences lend support for our (...) prediction that individuals in the collectivist Thai culture have higher means on subjective norms, attitudes, and intentions for whistle-blowing than members of the individualist American culture. Our models indicate that subjective norms for whistle-blowing, even though significantly different for American and Thai participants, have a direct effect on whistle-blowing attitudes as well as direct and indirect effects on reporting intentions for both subject groups. Compared to American subjects, the whistle-blowing intentions of Thai participants are more strongly influenced by subjective norms for whistle-blowing. (shrink)

This experimental study extends prior capital market and environmental accounting research by utilizing the theoretical underpinnings of legitimation through impression management, source credibility bias, perceived trust, and ideology in assessing the influence of discretionary environmental accounting narratives on jurors’ punitive damage award assessments. We utilize mock jurors as environmental stakeholders and find that: jurors in a court case involving corporate environmental malfeasance assess lower punitive damage awards against a firm that provides discretionary disclosure on its website regarding future abatement and (...) control narratives, environmental sensitivity of the firm’s industry moderates the negative relationship between the discretionary disclosure and jurors’ punitive damage award assessments, and juror’s perceived trust toward firm management mediates the prior moderation effect. Further, juror political ideology is found to affect the punitive damage award assessments, with liberal jurors levying comparatively higher awards than conservative jurors. (shrink)

We test competing theoretical perspectives of family firm governance in two separate studies by investigating whether family firm control moderates the detrimental effect of a management training ground on internal auditor objectivity and on the external auditor’s decision to rely on the internal audit function. In Study 1, we assess the objectivity of internal auditors working under an IAF that serves as a MTG or non-MTG and located in a family or non-family firm. A key result of Study 1 is (...) the mitigating role of family firm control, as we find that the objectivity of internal auditors is reduced when the IAF serves as a MTG but only in non-family firms. When the IAF is located in a family-controlled firm, the objectivity of internal auditors is unaffected by the opportunity to be promoted into management positions outside of the IAF. In Study 2, we utilize a controlled laboratory experiment with experienced Big 4 auditors as participants and examine their decision to rely on an IAF when it serves as a MTG. Our analyses indicate that external auditors reduce their reliance on non-family firm IAFs that are also MTGs and their decision is fully mediated by the perceived objectivity of non-family firm internal auditors. In contrast, external auditors’ reliance on family firm IAFs and their perceptions of internal auditor objectivity are unaffected under a MTG regime. The results of Studies 1 and 2 provide support for the alignment perspective of family firms. (shrink)