by jeffrey n. barnes, cpa, macc oral defense slides in partial fulfillment

Organizational Leadership and Ethical Climate in Utah’s

Certified Public Accounting Profession(90-minute Presentation Slides)

byJeffrey N. Barnes, CPA, MAcc

Oral Defense Slides in Partial Fulfillment of Requirements for the Degree

Doctor of Business Administration

UNIVERSITY OF PHOENIX

February 2013

Chapter 1, Introduction

• CPAs are critically involved with assuring fair presentation of financial statements.

• Fraudulent financial reporting continues (Arens, Elder, & Beasley, 2012; Apostolou & Crumbley, 2007).

• Foundations of fraudulent behavior are rooted in sociological, psychological, and moral-development theories (Albrecht, Romney, Cherrington & Roe, 1982).

Chapter 1, IntroductionSociological Theories

• Differential association, with focal leader, contributes to

informing and perpetuating unethical behavior (Galliher & Guess, 2009).

• CPA profession organizational structure lends to fragmented and departmentalized workplace environments (Darley, 2004).

• Ethical climates are “. . . the perceived prescriptions, proscriptions, and permissions regarding moral obligations in the organization” (Victor & Cullen, 1988, p. 101).

Chapter 1, IntroductionPurpose of the Study

• Quantitative research study with correlation design to describe and quantify relationships between

– focal supervisor’s leadership style,– subordinate’s ethical climate perceptions,– religiosity influence, and– regulations’ influence.

Chapter 1, IntroductionSignificance of the Problem

• Accounting profession to benefit from the study by,

– understanding current state of organizational leadership,– finding confirmatory or disconfirmatory evidence that leadership

correlates to ethical perceptions, – determining if religiosity and regulatory influence relate to leadership

and ethical climate perceptions, and– designing leadership training interventions.

Chapter 1, IntroductionSignificance of the Problem

• A growing body of literature, although small in scope, provides some information about public accounting firms’ leadership, ethical climate, and firm personnel’s cognition of its importance (Bobek, Hageman, & Radtke, 2010; Gunz, Gunz, & McCutcheon, 2002; Jiambalvo & Pratt, 1982).

Chapter 1, IntroductionOverview of the Research Design

• This quantitative research study, with a correlation design, investigated the relationships between independent, dependent, and moderating (intervening) variables (Creswell, 2005).

• The model variables are,

– leadership style (IV), – ethical climate perception (DV),– religiosity (MV, treated as an IV), and– understanding of FSGO (MV, treated as an IV).


• The research sought to explore answers to the following questions:

1. To what degree do partners, managers, and supervisors’ various leadership styles relate to the subordinate’s perception of what are ethical expectations and behaviors to be followed?

2. To what degree does the subordinate’s knowledge of regulatory influence relate to the subordinate’s perception of the ethical climate and the focal leader’s leadership?

3. To what degree does the subordinate’s religiosity or compassionate service relate to the subordinate’s perception of the ethical climate and the focal leader’s leadership?


• H10: A leaders’ transformational leadership style does not relate to the subordinate’s perception of the firm’s ethical climate in Utah.

• H20: A leaders’ transactional leadership style does not relate to the subordinate’s perception of the firm’s ethical climate in Utah.

• H30: A leaders’ laissez-faire leadership style does not relate to the subordinate’s perception of the firm’s ethical climate in Utah.


• H40: Known exogenous regulatory/punishment factors, as perceived by subordinates, do not relate to the subordinate’s perception of the firm’s ethical climate and immediate leadership in Utah.

• H50: The degree of service or church attendance does not relate to the subordinates’ perception of the firm’s ethical climate and immediate leadership in Utah.

• Alternate hypotheses, for each of the null hypotheses, suggest that relationships exist

Chapter 1, IntroductionSummary

• Established that fraudulent financial reporting continues• Suggested a background for the problem rooted in sociology,

psychology, ethics, moral development; and perhaps influence by professionals’ regulations and religiosity

• Stated the significance of the problem to the public and the accounting profession

• Proposed a quantitative research project, with correlation design

Chapter 2, Review of LiteratureIntroduction

• The current study,

– explains previous research related to leadership and ethical climate, which is sparse in the accounting profession,

– provids secondary evidence regarding regulatory controlling subordinate effect, and

– provides secondary evidence regarding the nascent emerging positive subordinate effects of religiosity.

Chapter 2, Review of LiteratureDocumentation

Category of Documentation Number Percentage

2006 to present 123 44.2%

Prior 2006 154 55.8%

All references 277 100.0%

Founding or extending theorists 41 14.8%

Empirical research 83 30.0%

Peer-reviewed articles 198 71.5%

Books 57 20.6%

Dissertations/unpublished research 4 1.4%

Official websites 18 6.5%

Chapter 2, Review of LiteratureMoral Philosophies and Ethics Theories

• A review of moral philosophy, as founded in ethics theories, is useful for identifying the common struggles ethics systems seek to resolve. Moral philosophy can be categorized in a number of frameworks, this study categorizes as,– Maximizing self-interests,– Maximizing joint-interests, and– Standing on moral principles.

• Related to accounting, criticisms exist for each of these moral philosophical frameworks

Chapter 2, Review of LiteratureEthics and Effective Leadership

• Underpinning leadership style is the individual’s ethical philosophy, whether that generally be leaning toward egoism, benevolence, or universal principles.

Chapter 2, Review of LiteratureEthics and Effective Leadership

• Leadership style had a correlation to moral development stages. Their research showed that managers in the highest stage of moral reasoning exhibited more transformational leadership traits and behaviors (Turner, Barling, Epitropaki, Butcher, and Milner (2002).

• Similar results with the Norwegian Naval Cadets in which postconventional moral reasoning was positively correlated with transactional and transformational leadership (Olsen, Eid, and Johnsen (2006).

Chapter 2, Review of LiteratureLeadership

• Leadership is about influencing individuals and groups within an organization (Nahavandi, 2006).

• Leadership has many definitions; however, all leadership definitions have the common thread of influencing others to accomplish organizational objectives. Important is the responsibility that leadership has to set the ethical tone about how to accomplish organizational objectives.

• Leaders are responsible for creating an ethical work climate (Schminke, Arnaud, & Kuenzi, 2007).

• Some evidence has shown that top management’s ethical climate standards and perceptions do not necessarily filter down to lower-level employees (Trevino, Weaver, & Brown, 2008).

Chapter 2, Review of LiteratureFull-range Leadership Theory

• The full-range leadership theory (FRLT) has been a relied upon as a valid continuum describing the range of leadership styles exhibited by effective organizational leaders (Lowe, Kroeck, & Sivasubramaniam, 1996).

• Regarding the FRLT model, with its nine leadership descriptions (subscales), were stable and that leadership effectiveness lessened the further away the leadership style ventured from the transformational description down through transactional and to the laissez-faire leadership styles (Lowe, Kroeck, & Sivasubramaniam, 1996).

Chapter 2, Review of LiteratureLeadership and Subordinate Socialization

• The fundamental leadership relational association hypothesizes to affect an organizational ethical and moral climate (Neubert et al., 2009).

• The most important ethical figures in an organization are the leaders and the values they possess, both by word and by deed.

• Interpersonal leader-to-subordinate relationships influence ethical behavior and perceptions (Mumford, Waples, Antes, Murphy, Connelly, Brown, & Davenport (2009).

Chapter 2, Review of LiteratureLeadership and Its Linkage to Ethical Climate

• Supervisors “. . . influence employees’ perceptions of the policies and practices, i.e., ethical climate” (Wimbush & Shepard, 1994, p. 645).

• Postulated that their results (i.e., correlation study findings) “show that managers’ attitudes, shaped by the tone set by top executives, significantly influence managers’ decisions to behave unethically or not” (Carpenter & Reimer, 2005, p. 125).

• Finding correlative relationships between Bass and Avolio’s full-range leadership theory styles and ethical climate perception would be useful knowledge in the accounting profession.

Chapter 2, Review of LiteratureEthical Climate Theory to Leadership

• The AICPA’s Statement on Quality Control Standards (SQCS) No. 7, A Firm’s System of Quality Control, requires . . . policies and procedures to ensure that services are competently delivered and adequately supervised with independence, integrity, objectivity, and concern for the public trust (AICPA, 2011a).

• The ethical principles of independence, integrity, objectivity, and concern for the public trust are intellectual virtues. These virtues should be foundational in the ethical decision making for members of the AICPA.

Chapter 2, Review of LiteratureEthical Climate Theory to Leadership

• Brown, Trevino, and Harrison (2005) found that “. . . ethical leadership predicts outcomes such as perceived effectiveness of leaders, employees’ satisfaction with the job, and their willingness to extra effort into the work and to report problems to management” (as cited in Toor and Ofori, 2009, p. 536).

• Victor and Cullen (1988) developed a theoretical framework for assessing the ethical context within which employees operate.

Chapter 2, Review of LiteratureEthical Climate Theory

Nine Theoretical Ethical Climate Types

Locus of Analysis

Individual

Local

Cosmopolitan

Ethical

Criterion

Egoism Self-interest

(EI)

Company profit

(EL)

Efficiency

(EC)

Benevolence

Friendship

(BI)

Team Interest

(BL)

Social

responsibility

(BC)

Principle

Personal morality

(PI)

Company rules and

procedures

(PL)

Laws and

professional codes

(PC)

Source: Victor and Cullen (1988, p. 104).


• Victor and Cullen’s (1988) five empirically derived ethical climate types have remained rather stable over time and addressed in some limited accounting peer-reviewed journal articles (Martin & Cullen, 2006).


Five Statistically Derived Ethical Climate Types

Instrumental

Caring

Independence

Rules

Lawcode

Locus of Analysis

Individual

Local

Cosmopolitan

EthicalCriterion

Egoism Self-interest(EI)

Company profit(EL)

Efficiency(EC)

Benevolence

Friendship(BI)

Team Interest(BL)

Social responsibility

(BC)

Principle

Personal morality

(PI)

Company rules and procedures

(PL)

Laws and professional codes

(PC)

Chapter 2, Review of LiteraturePublic Accounting Ethical Climate Summary

• The several ethical climate research studies for public accounting indicate the importance of ethical climate

perceptions on subordinate decision making (Buchan, 2005).

• In this Asian study, the public accountants’ ethical climate perceptions of “. . . rules codes, caring, self-interest, social responsibility, and instrumentalism, while efficiency and personal morality were perceived higher in the private sector” (Venezia, Venezia, & Hung, 2010, p. 77).

Chapter 2, Review of LiteratureExternal Control Factors—FSGO Regulations

• Some important regulatory control efforts to curb corruption and fraud in U.S. business have been the establishment of the Federal Sentencing Guidelines for Organizations (FSGO) and related subsequent amendments as well as the Sarbanes-Oxley Act of 2002 regulations.

• Commission determined, through input from their newly organized Advisory Board, to “. . . encourage organizations to foster ethical requirements as opposed to mere technical compliance that can potentially circumvent the intent or spirit of law or regulation” (FSGO, 2010. p. 738).

Chapter 2, Review of LiteratureReligiosity

• Religion is thought to influence business individuals’ ethical decision making and ethical climate perception within organizations (Weaver & Agle, 2002).

• Recently, religiosity, spirituality and ethics are emerging, in management literature, as possibly related factors for positive effectiveness (Corner, 2009).

• Communities with religious institutions, in which a higher discourse of spiritual values is taught and ritually and personally practiced, nurture spirituality. Spirituality, in a form of religious and community service orientation, enhance ethical behavior intention (Christensen et al., 2005).

Chapter 2, Review of LiteratureSummary

• An organization’s ethical climate, is founded on the collective foundation of it individuals moral and ethics philosophies. These moral and ethical philosophies are related to the five empirically derived ethical climate types found within organizations.

• Organizational leadership shapes and is shaped by the organization’s ethical climate. Potentially affecting the public accountants’ perceptions of organizational leadership and ethical climate are two potential moderating variables, which are awareness of regulatory statutes and personal religiosity, respectively.

Chapter 2, Review of LiteratureSummary (cont.)

• Both the lack of empirical research into the public accounting profession and the possible insights correlative influence these two moderating variables could provide and substantiate the additional needed empirical studies regarding the current state of accounting firms’ ethical climate structure and the prevailing leadership style typically exhibited.

Chapter 3: MethodTheoretical Model Design

Known Exogenous Regulatory/Punishment

Factors(MV: H4)

1 FSGO Scale

(FSGO Survey, 12 Questions)

Subordinates' Perception of

5 Ethical Climate Scales(DV)

(ECQ Survey, 26 Questions)

Extent of Religiosity/Compassionate

Service(MV: H5)

1 Scale

(REL Survey, 4 Questions)

Superiors'Leadership Style(IV: H1, H2, H3)

9 Leadership Scales

(MLQ Survey, 45 Questions)

Legend:

DV Dependent VariableIV Independent VariableMV Moderating (Intervening) VariableH Hypothesis

Figure 2. Statistical Integrated Leadership & Ethical Climate Framework

H1, H2, H3

H4 H4

H5 H5

Chapter 3: MethodJustification for Quantitative Method

• First, a researched body of knowledge already exists regarding the major concepts of leadership styles and their effect on subordinate employees’ perceptions of organizational ethical climate (Dahlin, 2009).

• Second, this quantitative research with correlation design also sought understanding of whether a social or psychological phenomenon possesses confirmatory reality (Campbell & Stanley, 1963).

• Third, the quantitative research questions found answers to what degree a variety of variables correlatively impact the subordinate’s perception of the organizational ethical climate and leadership style.

Chapter 3: MethodPopulation

• In 2010, approximately 1,175 certified public accountants (CPAs), in the practice of public accounting, in the State of Utah and members of the Utah Association of Certified Public Accountants (UACPA, 2009).

• There were 469 separate physical CPA firm offices in Utah at the time of the study, many with below five CPAs. Of the 469 firms, only 41 firms with five or more CPAs exist (UACPA, 2009).

• 11 CPA firms provided written permission to contact organization personnel, via email, for the administration of the electronic survey of this research study.

Chapter 3: MethodPopulation (Cont.)

AdministrativePartner,

CPA

Tax Services

Supervisor, CPA

AssuranceServices

Supervisor, CPA

Tax Services

Subordinate, CPA

Assurance Services

Subordiante, CPA

Figure 3. Minimum Practice Structure Sought from Population.

Chapter 3: MethodSample

Cochran’s Sample Size Formula

• n = (t)2 * (s)2

(d)2

Minimum Desired Sample Size

• Calculation of desired sample size is, n = [((1.96)2 * (1.25)2)/(.25)2] = 96.04 or rounding up, 97 respondents

Chapter 3: MethodData Collection (Cont.)

• The original request was sent on February 7, 2012, the second request was sent on February 18, 2012, and the third and last request was sent March 13, 2012.

• The 257 email addresses, at the time the survey was administered, there was provided 236 continuing valid prospective respondents. The reduction of 21 emails represented natural attrition from the firms. The number of survey participants was 103 from a target population of 236, providing a 43.6% response rate.

Chapter 3: MethodPilot Study

Table 9

Summary of Changes to the Survey based on Pilot Sample Recommendations

Pilot Sample Recommendation

Corrective Change to Survey

“Please provide an orientation statement before each survey.”

Before each of the four surveys, an orientation statement was made to help focus the survey responder to the immediate survey’s intent and context.

“I was able to proceed to the next page without having answered all the questions on the survey webpage.”

The survey instrument was changed to disallow progressing to a next survey webpage without all the questions being answered. If the survey respondent neglected to answer a question, that questions was turned into red text to highlight the error. The question then needed to be completed in order to proceed forward with the survey.

“In the REL survey, measuring religiousness, the scale did not make sense, ‘1’ should be ‘most important’ and ‘5’ should be ‘least important.’”

Changed scale as recommended.

“Place the FSGO survey last, so those that don’t have SEC clients would just bypass that survey and go directly to the demographic questions.”

Changed survey sequence as recommended.

“Fix some minor spelling errors.”

Fixed the several identified spelling errors.

Source: Personal interview by researcher.

Chapter 3: MethodInstrumentation

• Four instruments were used in this research study, the

– Multifactor Leadership Questionnaire (MLQ), or standard MLQ, or also known as the MLQ 5X short, by Avolio and Bass (2004),

– Ethical Climate Questionnaire (ECQ), by Victor and Cullen (1987, 1988),

– Understanding of Federal Sentencing Guidelines for Organizations, by researcher (2012), and

– Religiosity, by researcher (2012).

Chapter 3: MethodResearcher Error with ECQ Instrument (Cont.)

Proper Ethical Climate Questionnaire Scale and Scale Used in This Study Proper ECQ Measurement Scale

Measurement Scale of this Study

0—Completely false 1—Completely false 1—Mostly false 2—Mostly false 2—Somewhat false 3—Somewhat false 3—Somewhat true 4—Mostly true 4—Mostly true 5—Completely true 5—Completely true


• According to Bart Victor, Ph.D. (personal communication, August 2, 2012), who is one the originators of the Ethical Climate Questionnaire (Victor and Cullen, 1988), this study’s collected data would expect to still be meaningful. He provided the following guidance,

. . . the data collection need not be reperformed; to address the scale error in the ‘Methods’ section of the dissertation; to state that the existing data means, variances, and correlations are meaningful and reportable; to suggest that the scale errors do not cause a systemic or universal disqualifying error, because the recorded survey respondents’ impressions about the perceived ethical climate types are still valid; to not transform the data, thus, to use the existing data as is; and to check for similar intercorrelations and reliability.


Victor & Cullen, 1988, Intercorrelations and Cronbach’s Alphas

Climate Scales

2

3

4

5

Alpha

1. Caring .45 .42 -.40 .19 .80 2. Law and code .55 -.14 .07 .79 3. Rules -.09 -.07 .79 4. Instrumental .05 .71 5. Independence .60 R > .06 (p < .05)

This Study’s Intercorrelations and Cronbach’s Alphas

Climate Scales

2

3

4

5

Alpha

1. Caring .35 .49 -.16 .18 .62 2. Law and code .68 -.38 .04 .68 3. Rules -.39 .10 .76 4. Instrumental .10 .83 5. Independence .69

Chapter 3: MethodCorrelation Analysis Interpretive Scale

Guilford Interpretation of the Magnitude of Significant Correlations

Absolute Value of Rho (r)

Interpretation

< .20 Slight, almost no relationship

.20 - .39 Low correlation, definite but small relationship

.40 – .69 Moderate correlation, substantial relationship

.70 – .89 High correlation, strong relationship

.90 – 1.00 Very high correlation, very dependable relationship Source: Van Aswegen & Engelbrecht, 2009, p. 5.

Chapter 3: MethodANOVA Analysis

• Prior to running the ANOVA analyses, assumptions for ANOVA were tested. The assumptions for normality were tested, which ascertain that the scores be normally distribution around the mean of the dependent variable. Histograms were developed for all the dependent variable ethical climate types.

• Also tested was the homogeneity of variance, which requires that the groups have equal variances in the population. Scatterplots of dependent variable’s various ethical climate types were constructed to determine the absence of heteroscedasticity. Both histograms and scatterplot tests were performed visually.

Chapter 3: MethodANOVA Analysis (Cont.)

• ANOVA analysis was performed for those correlative relationships with statistical significance. ANOVA or analysis of variance provided the F-crit statistic (F-test, F), R2, and significance.

Chapter 3: MethodUnivariate Analysis

• Statistical analysis also treated the demographic categories, with sufficient subsample size, as independent variables.

• Running univariate analysis of variances between the demographic independent variable and the leadership independent variable to the ethical climate’s dependent variables was performed. Those relationships that demonstrated significant relationships were reported

Chapter 4: ResultsStatistical Analyses

• Descriptive statistics• Assumptions Regarding Models Used

– Normality of Distributions– Homoscedasticity

• Findings for Hypothesis 1—Transformational Leadership’s Relationships to Ethical Climates

• Findings for Hypothesis 2—Transactional Leadership’s Relationships to Ethical Climates

• Findings for Hypothesis 3—Laissez-faire Leadership’s Relationships to Ethical Climates

Chapter 4: ResultsStatistical Analyses

• Findings for Hypothesis 4—Regulatory Influence Relationships to Leadership and Ethical Climates

• Findings for Hypothesis 5—Religiosity’s Relationships to Leadership and Ethical Climates

• Limited Cross-sectional Statistical Analysis• Post Hoc Power and Effect Size Analysis

Chapter 4: ResultsDescriptive Statistics

Age

Freq.

Gender

Freq.

Educ.

Freq.

CPA?

Freq.

<26 6 Female 29 AS 3 Yes 79

26-40 74 Male 74 BS 17 No 24 41-55 19 MS 81 >55 4 JD, etc. 2

Total 103 Total 103 Total 103 Total 103

Respondents’ Personal Information

Chapter 4: ResultsDescriptive Statistics

Years with Firm

Freq.

Work Function

Freq.

Respon. Level

Freq.

Firm Size

Freq.

0-2 18 Assurance 61 Partner 11 Big 4 0 3-4 27 Tax 35 Manager 42 National 1

5-10 32 Consulting 2 Supervisor 31 Regional 32 > 10 26 Other 5 Staff 19 Local, large 50

Local, small 20

Total 103 Total 103 Total 103 Total 103

Respondents’ Relationship to and CPA Firm Information

Chapter 4: ResultsFindings for Hypothesis 1--Correlations

Transformational (IV)

Caring (DV)

Lawcode

(DV)

Rules (DV)

Instrumental

(DV)

Independence

(DV)

Pearson Correlation .411 .282 .402 -.525 .093 Significance (2-tailed), p-value .000** .004** .000** .000** .349 N 103 103 103 103 103

Chapter 4: ResultsFindings for Hypothesis 1--ANOVA

Model

Sum of Squares

df

Mean Square

F-test

R2

Sig.

Regression 28.873 1 28.873 8.718 .079 .004** Residual 334.486 101 3.312 Total 363.359 102

Model

Sum of Squares

df

Mean Square

F-test

R2

Sig.


Model

Sum of Squares

df

Mean Square

F-test

R2

Sig.


Model

Sum of Squares

df

Mean

Square

F-test

R2

Sig.


Transformation Leadership to Caring Ethical Climate

Transformation Leadership to Lawcode Ethical Climate

Transformation Leadership to Rules Ethical Climate

Transformation Leadership to Instrumental Ethical Climate


Transactional (IV)

Caring (DV)

Lawcode

(DV)

Rules (DV)

Instrumental

(DV)

Independence

(DV)

Pearson Correlation (Rho) .054 .149 .152 .054 -.038 Significance (2-tailed), p-value .591 .132 .125 .585 .072 N 103 103 103 103 103


Laissez-faire (IV)

Caring (DV)

Lawcode

(DV)

Rules (DV)

Instrumental

(DV)

Independence

(DV)

Pearson Correlation (Rho) -.073 -.143 -.237 .247 .010 Significance (2-tailed), p-value .462 .151 .016* .012* .919 N 103 103 103 103 103

Chapter 4: ResultsFindings for Hypothesis 3--ANOVA

Model

Sum of Squares

df

Mean Square

F-test

R2

Sig.

Regression 24.995 1 24.995 6.001 .056 .016* Residual 420.655 101 4.165 Total 445.650 102

Model

Sum of Squares

df

Mean Square

F-test

R2

Sig.

Regression 143.840 1 143.840 6.570 .061 .012* Residual 2211.073 101 21.892 Total 2354.913 102

Laissez-faire Leadership to Rules Ethical Climate

Laissez-faire Leadership to Instrumental Ethical Climate

Chapter 4: ResultsFindings for Hypothesis 4—Correlations

FSGO Understanding (IV)

Caring (DV)

Lawcode (DV)

Rules (DV)

Instrumental (DV)

Independence (DV)

Pearson Correlation -.002 .220 .165 -.284 .048 Significance, (2-tailed), p-value .990 .129 .257 .048* .742 N 49 49 49 49 49


REL Religiosity (IV)

Caring (DV)

Lawcode

(DV)

Rules (DV)

Instrumental

(DV)

Independence

(DV)

Pearson Correlation (Rho) -.091 -.043 -.084 .021 -.110 Significance (2-tailed), p-value .363 .669 .401 .831 .268 N 103 103 103 103 103

Chapter 4: ResultsCross-sectional Analyses

• To understand the significant interaction between gender (or with

any other demographic independent variable), and transformational leadership (or any

other independent variable), on the caring ethical climate type perception (or

any other dependent variable), the transformational leadership (or any other independent

variable) was grouped into those scoring higher than one standard deviation (+1SD) and those scoring lower than one standard deviation (-1SD) and plotted with gender (or with any other demographic independent variable).

Chapter 4: ResultsLimited Cross-sectional Statistical Analysis

Gender/Transformational Leadership to Caring Ethical Climate

Category D2(Gender)

Frequency

Female (1) 29Male (2)Total

74103

Source

Type III Sum Of Squares

df

Mean Square

F

Sig.

Corrected Model 254.542a 3 84.847 9.828 .000 Intercept 1506.910 1 1506.910 174.553 .000 Gender (D2) 59.265 1 59.265 6.865 .010 Transformational 28.464 1 28.464 3.297 .072 Gender (D2) * Transformational

48.949

1

48.949

5.670

.019*

Error 854.662 99 8.633 Total 63303.000 103 Corrected Total 1109.204 102

Chapter 4: ResultsLimited Cross-sectional Statistical Analysis

(Cont.)

Service Function/Transformational Leadership to Lawcode Ethical Climate

Category D8(Service Function)

Frequency

Assurance (1) 61Tax (2)Total

3596

Source Type III Sum Of Squares

df

Mean Square

F

Sig.

Corrected Model 50.463 a 3 16.821 5.297 .002 Intercept 1348.360 1 1348.360 424.591 .000 Assurance and Tax (D8) 20.225 1 20.225 6.369 .013 Transformational 14.507 1 14.507 4.568 .035 Assurance and Tax (D8) * Transformational

16.339

1

16.339

5.145

.026*


Chapter 4: ResultsLimited Cross-sectional Statistical Analysis (Cont.)

Service Function/Transformational Leadership to Rules Ethical Climate

Category D8(Service Function)

Frequency

Assurance (1) 61Tax (2)Total

3596

Source


df

Mean

Square

F

Sig.

Corrected Model 89.824 a 3 29.941 8.524 .000 Intercept 1069.929 1 1069.929 304.592 .000 Assurance and Tax (D8) 26.019 1 26.019 7.407 .008 Transformational 35.826 1 35.826 10.199 .002 Assurance and Tax (D8) * Transformational Error Total Corrected Total

23.310

1

23.310

6.636

.012*

323.165 92 3.513 28191.000 96

412.990 95


Licensed CPA?/Transformational Leadership to Rules Ethical Climate

Source


df

Mean

Square

F

Sig.

Corrected Model 99.567 a 3 33.189 9.494 .000 Intercept 813.263 1 813.263 232.641 .000 CPA? (D9) 27.149 1 27.149 7.766 .006 Transformational 91.979 1 91.979 26.311 .000 CPA? (D9) * Transformational

23.876

1

23.876

6.830

.010**



Firm Size/Transformational Leadership to Lawcode Ethical Climate

Category D11(Firm Size)

Frequency

Regional 32Local, large 25+ 50Local, small 20Total 102

Source


df

Mean Square

F

Sig.

Corrected Model 69.601 a 3 23.200 7.819 .000 Intercept 147.678 1 147.678 49.769 .000 Firm Size (D11) 6.100 1 6.100 2.056 .155 Transformational 23.938 1 23.938 8.067 .005 Firm Size (D11) * Transformational

13.106

1

13.106

4.417

.038*



Licensed CPA?/Transactional Leadership to Rules Ethical Climate

Source


df

Mean

Square

F

Sig.

Corrected Model 32.366 a 3 10.789 2.584 .058 Intercept 684.151 1 684.151 163.885 .000 Transactional 19.079 1 19.079 4.570 .035 CPA? (D9) 20.518 1 20.518 4.915 .029 CPA? (D9) * Transactional

17.359

1

17.359

4.158

.044*



Years with Firm/Lassiez-faire Leadership to Lawcode Ethical Climate

Category D7(Years with firm)

Frequency

0 – 2 183 – 45 – 1010+ years

273226

Total 103

Source


df

Mean

Square

F

Sig.

Corrected Model 66.219 a 7 9.460 3.024 .006 Intercept 5937.012 1 5937.012 1898.146 .000 LFL 4.082 1 4.082 1.305 .256 Time with Firm (D7) 40.450 3 13.483 4.311 .007 Time with Firm (D7) * LFL

38.792

3

12.931

4.134

.008**


Chapter 4: ResultsPost Hoc Power and Effect Size Analysis

Hypothesis

Alpha

P-value

df

Post

Hoc

Power

(eta2)

Effect

Size

H1, Transformational to Caring .05 .000** 102 .92 .53

H1, Transformation to Lawcode .05 .004* 102 .86 .54

H1, Transformation to Rules .05 .000** 102 .93 .56

H1, Transformation to Instrumental .05 .000** 102 .93 .56

H3, Laissez-faire to Rules .05 .016* 102 .71 .18

H3, Laissez-faire to Instrumental .05 .012* 102 .73 .17

H4, Understanding FSGO to Instrumental .05 .048* 48 .51 .33

Post Hoc Power and Effect Size Analysis

Chapter 4: ResultsSummary (Cont.)

• Regarding the primary theoretical model’s dependent (ethical climate perception) and independent variables (perceived focal leader’s leadership style), the findings: – show a statistically significant relationship between

transformational leadership and four ethical climate type perceptions (i.e., caring, lawcode, rules, and instrumental).

– demonstrate no statistically significant relationship between transactional leadership and all five of the ethical climate type perceptions.

– reveal that laissez-faire leadership exhibits a statistically significant, although weak negative correlative influence on the rules ethical climate type perception and a statistically positive correlative influence on the instrumental ethical climate type perceptions.

Chapter 4: ResultsSummary (Cont.)

• With regard to this study’s theoretical framework’s proposed moderating or intervening variables, the survey respondents’ understanding of the Federal Sentencing Guidelines for Organizations (FSGO) recommendations and the survey respondents’ religiosity, the following finding were observed:

– respondents’ understanding the Federal Sentencing Guidelines for Organizations’ (FSGO) recommendations has a slightly negative correlative relationship with the instrumental ethical climate type perception.

– there was no statistically significant relationship between the moderating variable of understanding the FSGO recommendations to any leadership style.

– religiosity showed no statistical correlative relationship with any ethical climate type. Additionally, no statistical correlative relationship exists between the moderating variable of religiosity and any leadership style.

Chapter 5: Conclusions and RecommendationsFrequency Means of Leadership Recognized

Frequency Means of Leadership Style Recognized

Leadership Style

Mean

Std. Dev.

Transformational 2.53 0.626 Transactional 1.89 0.369 Laissez-faire 1.31 0.647

MLQ Frequency Key: 0.0 = Not at all, 1.0 – Once in a while,2.0 = Sometimes, 3.0 = Fairly often, and 4.0 = Frequently, if not always

Chapter 5: Conclusions and RecommendationsResearch Question 1

• To what degree do partners, managers, and supervisors’ various leadership styles affect the subordinate’s perception of what are ethical expectations and behaviors to be followed?

Chapter 5: Conclusions and RecommendationsTransformational Leadership’s Effect

• Transformation leadership influence subordinates to become aware of what is important to the accounting firm, such as performance expectations, as well as convinces subordinates to higher levels of moral and ethical standards (Antonakis and House, 2002; MLQ, 1995; MLQ, 2004)

• Analysis of descriptive statistics, such as, means and standard deviations of the three major leadership characteristics or styles reveal that transformational leadership was the most often leadership style recognized.

Chapter 5: Conclusions and RecommendationsTransformational Leadership’s to Caring (Cont.)

• Professionals working in a recognized caring ethical climate are concerned with being considerate toward others, focus on team play, and considerate of constituents outside the organization. Accounting professionals operating in a caring ethical climate are concerned about social responsibilities.

• The AICPA principles of professional conduct mandate that the “public interest” subordinate all personal and firm interest. Complying with social responsibilities and expectations of ethical conduct is very beneficial to the ethical, as well as, legal sustainability of the accounting firm.

• Transformational leadership had the only statistically significant relationship with the caring ethical climate. Transactional and laissez-faire leadership style does not engender a loyalty derived from leader caring and support or does not encourage concern for the public interest.

Table 61 Leadership’s Impact on Recognition of the Caring Ethical Climate

Leadership Style

Rho

Sig.

N

Transformational .411 .000** 103 Transactional .054 .591 103 Laissez-faire -.073 .462 103

**. P-value, correlation is significant at the .01 level (2-tailed).


TransformationalLeadership Style

Scale

Scale DefinitionThe leader . . .

An Example of How a Utah Accounting Firm

Leader Could Employ Transformational Behavior

Idealized Attributes

Instills pride in others for being associated with the leader

At the onset, during, and the end of an engagement activity, let your subordinate know how appreciative you are in leading an engagement activity with the subordinate and that both should grow from the experience

Goes beyond self-interest for the good of the group

Always show personal interest in the subordinate’s success by selflessly helping and advising work efficiencies in a timely manner

Acts in ways that build others’ respect for the leader

Always act respectfully of others, at all times, and always show respect to and about the subordinate when interacting with clients or colleagues

Displays a sense of power and confidence

At an appropriate time, discuss a sense of responsibility and loyalty to the accounting firm and confidence about the engagement’s successful completion and purpose


TransformationalLeadership Style Scale


An Example of How a Utah Accounting Firm Leader

Could Employ Transformational Behavior

Idealized Behaviors

Talks about the most important values and beliefs

During engagement activities’ reflective opportunities (i.e, during meals, reviewing subordinates’ work, discussing client difficulties) share personal company-related, professional-related, or personal-related values and beliefs

Specifies the importance of having a strong sense of purpose

At appropriate times, express the importance of the professional accounting profession’s responsibility to the public’s interest and how the firm’s services add to client efficiencies, compliance, and sustainability

Considers the moral and ethical consequences of decisions

At appropriate times, share your moral/ethical/legal decision-making processes, compliant with the accounting firm and or profession’s recommended decision-making practices

Emphasizes the importance of having a collective sense of mission

At the onset of an engagement activity, speak of the importance of team cohesion, problem-solving agreement, and efficient and effectively completion of the engagement activity




An Example of How a Utah Accounting Firm

Leader Could Employ Transformational Behavior

Inspirational Motivation

Talks optimistically about the future

When discussion allows, speak positively about the accounting firm’s future growth opportunities and leadership opportunities for the subordinate

Talks enthusiastically about what needs to be accomplished

During each engagement, be enthusiastic about the engagement’s objectives and work tasks to be completed by all involved

Articulates a compelling vision of the future

When occasion arises, communicate the strategic goals and objectives of the accounting firm and how the subordinate fits into the future success of the accounting firm

Expresses confidence that goals will be achieved

At the onset of the engagement, express the potential work task difficulties and how the leader and subordinate will work together to complete the engagement successfully






Intellectual Stimulation

Re-examines critical assumptions to question whether they are appropriate

With each engagement, coach the subordinate about how the engagement procedures can be more efficiently performed, how worksheets should be organized and designed to evidence procedures have been properly performed, and how improvements from the prior engagement can be employed

Seeks differing perspectives when solving problems

Always seek subordinate input for solving client engagement problems that arise

Gets others to look at problems from many different angles

Coach the subordinate about how to solve client dilemmas, resolve accounting or tax measurement problems, or use current professional literature to bring another perspective to solving engagement difficulties

Suggests new ways of looking at how to complete assignments

At the onset of the engagement, coach the subordinate about how up-line leaders might have changed or reasons for not changing the engagement approach






Idealized Consideration

Spends time teaching and coaching

During the whole engagement, the leader should selflessly coach the subordinate how to improve the craft of performing the required engagement procedures

Treats others as individuals rather than just as a member of the group

Learn about your subordinate before commencing the engagement. Learn his/her name, family circumstances or status, interests, and past performance with an objective of helping the subordinate to improve is KSAs (i.e., knowledge, skills, and abilities)

Considers each individual as having different needs, abilities, and aspirations from others

Learn about the subordinate’s needs, abilities, and aspirations to better coach his/her “career equity,” so as to assist the subordinate in their desired career path

Helps others to develop their strengths

During the engagement and at the end, assist the subordinate in developing their strengths with during-the-engagement work practice recommendations and a meaningful performance evaluation

Chapter 5: Conclusions and RecommendationsTransformational Leadership’s to Lawcode

• Transformational leadership has the highest positive correlative effect on subordinates recognizing the lawcode ethical climate. Accounting firms would prefer their leaders to demonstrate transformation leadership, more often than not, simply to encourage firm-wide compliance with laws, regulations, and professional practice standards.

• While performing univariate analysis of variances between the demographic subject factors of who practice assurance services and tax service, an interesting phenomenon arose. Those firm personnel not only are influenced by transformational leadership and practicing tax services but also experience a stronger perception of the lawcode ethical climate than those in the firm practicing assurance services. Perhaps the tax personnel are more sensitive to the lawcode ethical climate because of their required understanding of voluminous tax law’s authoritative sources (i.e., legislative tax law, administrative tax law, and judicial tax law). Also, tax professionals must also be aware of the generally accepted accounting principles (GAAP)

Table 63 Leadership’s Impact on Recognition of the Lawcode Ethical Climate

Leadership Style

Rho

Sig.

N

Transformational .282 .004** 103 Transactional .149 .132 103 Laissez-faire -.143 .151 103

**. P-value, correlation is significant at the .01 level (2-tailed).

Chapter 5: Conclusions and RecommendationsTransformational Leadership’s to Rules

• From Table 64, it can be seen that transformational leadership has the only variable that shows statistically significant and highest correlative relationship to the rules ethical climate.

• Also, Utah CPA firms should be aware that CPA licensed personnel, while influenced by transformational leadership, recognize a higher level of rules ethical climate type than those not having earned their CPA licensure.

• Perhaps this phenomenon arises from the stronger appreciation of quality control compliance requirements with firm rules, policies, and procedures protocol for maintaining licensure and practice permission from peer quality reviews. Additionally, personnel from larger CPA firms, while influenced by transformational leadership perceived a higher level of the rules ethical climate, than those personnel from smaller CPA firms. This phenomenon may exist because larger CPA firms are perhaps performing more high-level assurance and tax services engagements, requiring greater understanding and compliance with in-firm policies, procedures, and practices, such as, for those collaborative intra-office procedures for multi-city client engagements. Personnel from larger CPA firms would necessarily be more sensitive to complying with intra-company policies, procedures, and practices.

Table 64 Leadership’s Impact on Recognition of the Rules Ethical Climate

Leadership Style

Rho

Sig.

N

Transformational .402 .000** 103 Transactional .152 .125 103 Laissez-faire -.237 .016* 103

*. P-value, correlation is significant at the .05 level (2-tailed). **. P-value, correlation is significant at the .01 level (2-tailed).

Chapter 5: Conclusions and RecommendationsTransformational Leadership’s to Instrumental

• Because transformational leadership suppresses the recognition of this individual- and company-egoistic position, as evidence by the negative correlative relationship, transformational leadership is important in lifting the subordinates’ conduct to higher levels of ethical preferences.

• Laissez-fair leadership also had a statistically significant and positively correlated relationship with this deleterious instrumental leadership style. Accounting firms have strong reporting, review, and follow-up policies. These procedures help ensure that auditing and tax engagement procedures are performed, evidence is properly assessed, and that the conclusion by the subordinate accounting professional are reasonable under the circumstances. Utah’s public accounting leaders demonstrate very low level of the laissez-faire leadership style. Utah’s public accounting leaders leadership practices support that which has been found in other nation-wide accounting leadership research, that transformational and transactional leadership is widely prevalent (Early and Davenport, 2010).

Table 65 Leadership’s Impact on Recognition of the Instrumental Ethical Climate Leadership Style

Rho

Sig.

N

Transformational -.525 .000** 103 Transactional .054 .585 103 Laissez-faire .247 .012* 103 *. P-value, correlation is significant at the .05 level (2-tailed). **. P-value, correlation is significant at the .01 level (2-tailed).

Chapter 5: Conclusions and RecommendationsTransformational Leadership’s to Independence

• Professional accounting subordinates working in an independence ethical climate type are left to their own personal and moral beliefs driving their ethical behavior. Leaving the accounting professional to their own beliefs of right and wrong and demonstrating their own personal ethics, regardless of rules, laws, regulations, and firm policies and procedures is problematic.

• If the subordinates’ personal beliefs of right and wrong differ from the principles of the AICPA Code of Professional Conduct’s regard for the public interest, deviate from promulgated professional standards, dismiss firm policies and procedures, injurious ramifications are more likely to result from engagement activities. When subordinate accounting professionals are left alone to exercise professional judgment, the independence climate type is not sufficient to protect the accounting firm, if the personal philosophy, moral compass, and regard for established standards and conduct are different with the accounting subordinate. Next, the interpretations, conclusions, and recommendations for transactional leadership follow.

Table 66 Leadership’s Impact on Recognition of the Independence Ethical Climate

Leadership Style

Rho

Sig.

N

Transformational .093 .349 103 Transactional -.038 .072 103 Laissez-faire .010 .919 103

Chapter 5: Conclusions and RecommendationsTransactional Leadership’s to Ethical Climates

• In Utah’s local-small, local-large, and regionally sized CPA firms, transactional leadership does not lend itself to having subordinates recognize any particular ethical climate type. Transactional leadership is not necessarily bad; however, in Utah public accounting, too much transactional leadership could retard subordinates to not be more fully aware of preferred ethical climate types. Ethical behavior is better remembered when reminded through perceiving a preferred ethical climate (i.e., caring, lawcode, or rules). In Utah’s public accounting profession, higher-level leadership (i.e., inclining toward transformational leadership) helps keep professional accounting subordinates compliant with Code of Conduct expectations, quality control policies and procedures, firm-wide ethical policies and procedures, and professional practice standards. The preferred ethical perceptions also help the professional accountant remember and be sensitive toward the overarching mandated philosophy that the public’s interest fundamentally guides our ethical actions.

Table 67 Transactional Leadership Impact on All Ethical Climate Types Ethical Climate Type

Rho

Sig.

N

Caring .054 .591 103 Lawcode .149 .132 103 Rules .152 .125 103 Instrumental .054 .585 103 Independence -.038 .072 103

Chapter 5: Conclusions and RecommendationsTransactional Leadership to Higher Leadership

Form

Chapter 5: Conclusions and RecommendationsLaissez-faire Leadership

• While Utah accounting leaders, in local-small, local-large, and regionally-sized CPA firms, exhibit laissez-faire leadership, subordinates’ perceive less of the rules ethical climate type. Too much laissez-faire leadership could lead subordinates to be reckless regarding compliance with rules, standards, and or ethical expectations. Additionally, laissez-faire leadership moves in the same direction as instrumental ethical climate perception. The more a focal leader exhibits laissez-faire leadership, the higher the probability of observing more instrumental ethical climate is recognized. The subordinate may well believe that self-interests and company-interests are more important factors in making ethical decisions. Utah CPA firms would do well to avoid subordinates’ from moving away from caring about the public’s interests in ethical decision-making, by avoiding laissez-faire leadership style.

Laissez-faire Leadership Impact on All Ethical Climate Types

Ethical Climate Type

Rho

Sig.

N

Caring -.073 .462 103 Lawcode -.143 .151 103 Rules -.237 .016* 103 Instrumental .247 .012* 103 Independence .010 .919 103

Chapter 5: Conclusions and RecommendationsSummary—Research Question 1

• Utah’s accounting firms do well by having their subordinates more often identify their focal leaders with transformational leadership near more fairly often, followed by near sometimes transactional leadership, and last with near once in a while laissez-faire leadership. Improving transformation leadership, through continuous leadership training and evaluating leaders for their consistency in exhibiting transformational leadership behaviors and patterns, as recommended in Table 62 (Transformational Building Actions and Behaviors), is strongly suggested. Perceive the preferred caring, lawcode and rules ethical climates types.

• Unfortunately, even if Utah CPA firms have ethical expectations for their professional subordinates, transactional leadership does not persuade subordinates to recognize, to any statistical significance, the preferred ethical climate types. When Utah’s public accounting leaders exhibit transactional leadership, not much will drive subordinates to recognizing the preferred ethical climate types. Transactional leadership will persist in public accounting practice, by the sheer nature of its deadline-oriented, time constrained, standards and regulatory-compliance rigor, and precise reporting engagement activities.

• Last, Utah CPA firms should eradicate any laissez-faire leadership tendencies that arise with any level of the firm’s leadership structure. Laissez-faire leadership can put Utah CPA firms at risk of ethical failure. Identifying whether subordinates’ perceive laissez-faire leadership form their local leaders can only be detected by upward evaluations or anecdotal observations by other leaders. Subordinates are loath to report poor leadership of their focal leaders, so formal upward evaluations should be performed on an anonymous basis. When focal leaders are found to be exhibiting laissez-faire leadership, corrective intervention training should occur.


• To what degree does the subordinate’s knowledge of regulatory influence affect the subordinate’s perception of the ethical climate and the focal leader’s leadership?

Chapter 5: Conclusions and RecommendationsFSGO Regulations Effect on Ethical Climates

Chapter 5: Conclusions and RecommendationsFSGO Regulations Effect on Ethical Climates

• Instrumental leadership style places the leader’s self-interest above others, depicts leaders the company mostly out for themselves, disallows room for personal morality, accepts substandard work product, so along as the company is not harmed.

• Basically, instrumental leadership is antithetical to the objectives of the Federal Sentencing Guidelines for Organizations. When Utah accounting professionals are aware of regulatory requirements, they recognize less of the instrumental ethical climate type.

• The instrumental ethical climate type is perhaps the worst ethical climate type that a CPA firm would hope exists among the perceptions of their professional subordinates.

• Instrumental ethical climate’s self-interest could lead toward dangerously careless attitudes regarding professional standards and regulatory requirements. Such disregard of standards and regulations could lead to professional error, negligence, or inclinations toward fraud.


• To what degree does the subordinate’s religiosity or compassionate service affect the subordinate’s perception of the ethical climate and the focal leader’s leadership?

Chapter 5: Conclusions and Recommendations Religiosity’s Effect on Ethical Climates


• One would anticipate that high religiosity and compassionate service activity would positively correlate with the caring ethical, and perhaps the lawcode and independence ethical climate types. This assumption was based on the notion that philosophy and religion are closely aligned with ethic’s theories and models of ethical behavior.

• Because the survey respondents virtually all answered weekly church activity and weekly to monthly compassionate service activity, there could exists a “ceiling effect” that makes correlation analyses more difficult to associate among the differing ethical climate type perceptions and leadership styles.

• There could be a serious range restriction found in the religiosity scale or the properties of the sample respondents (i.e., all highly religious) spoiled the desired variability of responses over the possible scale responses (Schmidt 2012).

• This correlation analysis perhaps required larger and more distributed religiosity response samples over the possible responses to show correlative association with multiple dependent variables. The distribution statistics for the religiosity scale is shown to the left.


• As can be seen, the sample is positively skewed to the left and tails sharply to the right. Apparently, either the measuring instrument was not sufficiently constructed to differentiate on one side of the measuring scale or the sample size was not sufficiently large to possess differentiation among respondents.

• Utah is a highly religious state, with many members of the Church of Jesus Christ of Latter-day Saints, who are unique as a religious group in that the active members are strongly engaged with religious and compassionate services (Cnaan, Evans, & Curtis, 2012)

Chapter 5: Conclusions and Recommendations Limitations, Improvements, & Suggestions

• Limitations– Sample representation and sample size

• Future research, of this sort, should seek to obtain larger sample sizes. Academic researchers need to somehow break down the barrier of fear and suspicion, exacerbated in our litigious society, between academic researchers and owners and legal counsel of national and international firms. Perhaps more collaborative research, with in-firm corporate research specialists and academics, where greater trust could be built and control over findings can be contractually and amicably handled could be a way in.

– Survey Analysis and Bias• Because this web-based research study was rather lengthy and required all four surveys, plus a robust

demographic section to be filled out, the researcher is not aware of how many partially-completed surveys were electronically abandoned. Partially-completed surveys were not electronically submitted, and thus, examination for sample bias by comparing full survey respondents’ answers with known incomplete respondents’ answers was not possible. Future research could perhaps, if collaboratively linked with corporate researchers, be present at the various firms’ and help personally administer the survey and obtain a higher with-in firm response rate.


• Improvements– Statistical Inferences and Theoretical Construct Development

• This study took a quantitative approach with a correlation design. Relationships between the variables were described as to their movement with respect to each other and their strength of statistical relationship to each other. By no means are these findings causative. However, the conceptual design of this study’s theoretical model is strongly supported by logic. A person’s moral development, immediate supervisor’s leadership style, known company understanding for the regulatory and professional conduct standards, and religiosity would seem to influence their perception of their prescribed ethical inclinations and conduct.

• Inference limitation relates to the lack of variability in the survey respondents’ answers for describing their religiousness. Virtually all survey respondents’ classified themselves as weekly churchgoers and or providing compassionate service to others. Perhaps the religiosity’s construct validity is not adequately defined. This study’s religiosity definition was not as well defined to represent the underlying true population’s perceptions regarding religious salience. Or possibly, the lack of variability about their religiousness could have created a “ceiling” effect and skewed the responses for correlation analysis. This phenomenon, in which 89 of the 103 survey respondents identified themselves as rather highly religious could also tainted the overall findings, if only religious professional accounting staff felt inclined to complete the survey. In the future, perhaps a religiosity survey (i.e., religious identity, religious salience, and religious conviction) is not warranted, but rather a survey of servant-style and compassionate-service attributes could be used to correlate such attributes with influence on ethical work climate perceptions.


• Improvements– Inadequacy of the Transactional Leadership for

Ethical Climate Awareness• The independent variable, transactional leadership style, produced non-statistical results, with respect to the

impact of the subordinate’s perception of their ethical workplace climate. However, upon deeper correlation analysis and ANOVA analysis, accepted leadership subscales of contingent reward and management-by-exception active had statistical correlation and significance. Transactional leadership has, in previous research, been problematic in accounting profession research.

• In the future, perhaps some exploratory qualitative research can better understanding how transactional leadership style’s subscales of contingent reward, management-by-exception—passive, and management-by-exception—active, is present and utilized in the public accounting profession. Then a better quantitative research conceptual model could be posited.


• Suggestions for Future Research• First, with appropriate corrections for the ECQ Survey instrument, this study can be replicated in other

professional public accounting jurisdictions. The accumulation of future replications can add to the aggregating of a larger, robust sample, perhaps leading to a meta-analysis.

• Second, better religiosity construct development can be pursued.

• Third, further research opportunities. For example, – why in Utah do women’s employment percentages nearly shrink in half, over time? – Why do men represent a higher percentage in the accounting profession’s senior positions? – What are the social factors creating a “glass ceiling” effect in Utah’s public accounting profession? – Why does the public accounting profession continue to appear unattractive to minority persons?

• Fourth, can better process-based management philosophies, with leadership training interventions, further bend the Utah public accounting leadership culture more toward transformational leadership, less towards transactional, and the eradication of laissez-faire leadership?

• Fifth, could accounting firms that improve their transformational leadership practices, – heighten the subordinates’ perception to the more preferred ethical climate types (i.e., caring, lawcode, and rules) ?– earn higher employee satisfaction, experience less professional staff turnover, and increase profitability?

References

Provided in the separate chapter PowerPoint presentations

by jeffrey n. barnes, cpa, macc oral defense slides in partial fulfillment

Documents

ethical perceptions

ethical climate perception

leadership correlates

ethical expectations

ethical climates

focal leaders leadership

leadership style iv

subordinates religiosity