A selection of interesting articles we found recently about values in auditing and accounting.

Exploring moral judgements among accounting and other business students
In this exploratory paper, Margaret  Andersen and her colleagues investigate the extension of Haidt’s (Psychol Rev 108(4):814–834, 2001, The righteous mind: Why good people are divided by politics and religion, 2012) Moral Foundations Theory (MFT), using the MFQ30 questionnaire, from a sample of the general public across many countries to a sample of business students. MFT posits that people rely on five major concerns, or foundations, when making moral judgments.

The five concerns are care/harm, fairness/cheating, loyalty/betrayal, respect/authority, and purity/degradation. In addition, Haidt suggests that intuition, rather than reasoning, leads to moral judgment. The researchers replicate Haidt’s measurement model and find that the measurement model based on their sample is consistent. This indicates support for MFT. Further, they find structural differences in the measurement model between the genders and between areas of study. These findings suggest that all students in the sample focus substantially on the fairness foundation. Ethics education and research may seek to expand the number of moral foundations individuals consider when discerning whether something is right or wrong.

For more information: Margaret L. Andersen, Jill M. Zuber & Brent D. Hill. 2015. Moral Foundations Theory: An Exploratory Study with Accounting and Other Business Students.
Journal of Business Ethics, 132(3), 525-538.

Auditors’ dual identifications with the firm and profession
The literature has long noted the ethical challenges related to auditors’ dual affiliations with both a profession and an organisation that practices the profession. The notion of organisational/professional conflict, in particular, was introduced to capture the potential problems involved in this situation, such as when an auditor engages in behaviours aimed at pleasing the client rather than safeguarding the public interest. However, inconsistent findings leave open the debate about how auditors manage their dual affiliation and question the underlying mechanisms by which auditors structure their identity and experience their work life.

To advance understanding of this issue, this research investigates the relationships between auditors’ organisational identification, professional identification, and emotions at work, using a questionnaire survey of 126 French Big 4 auditors and a two-step split-sampling design. The results show that the two forms of identification have a different relationship with emotions: positive for organisational identification but ambivalent for professional identification. These findings contribute to our understanding of professionals’ work experiences in large organisations.

Read further at: Alice Garcia-Falières & Olivier Herrbach. 2015. Organizational and Professional Identification in Audit Firms: An Affective Approach.
Journal of Business Ethics, 132(4), 753-763.

The ethics of paying employees by paper, plastic or bitcoin
Individuals and businesses make numerous payments every day. They sometimes have choices about what forms of payment to make or accept, and at other times are effectively forced to use a particular form. Often there is an asymmetric power relationship between payer and payee that raises the issue of whether one side unfairly exploits the other. Is it unethical exploitation for an employer to pay employees with a fee-laden payroll card over other more convenient forms of payment? Does the fee structure of payment networks such as Visa and MasterCard unfairly exploit merchants? The bitcoin payment system is an ethical as well as technological evolution as it was designed to be an electronic payment system that does not rely upon trust. Can an entire payment system like bitcoin be “evil,” as charged by Krugman (2013)? Payment tools as such are ethically neutral, but can be used in an ethical or unethical manner.

More details are at: James J. Angel & Douglas McCabe. 2015. The Ethics of Payments: Paper, Plastic, or Bitcoin?
Journal of Business Ethics,132(3), 603-611.

Does the Defining Issues Test advance ethics research with accounting students? A meta-analytic review
Numerous researchers have investigated accounting students’ levels of moral reasoning, ethical choice and judgment employing the Defining Issues Test (DIT) and using its P score as an indicator of moral reasoning. Not surprisingly, a number of DIT studies report conflicting results. Moreover, despite widespread use of the DIT, there is concern that it may not adequately measure all facets of ethical judgment (cf. Bailey et al., Behav Res Account 22(2):1–26, 2010). Thus, Anne  Christensen and her colleagues endeavour to provide insight not only into the contradictory results but also about the applicability of the DIT for studying accounting students.

To do so, the researchers collected published and unpublished DIT studies employing accounting students as subjects and used meta-analysis to aggregate findings across these studies to quantify their results, examining commonly employed variables. They show significant relationships between P scores and some variables (length of professional experience, choice of major, political ideology, gender, GPA and education level) but not others (age).

Further, the findings demonstrate that the DIT provides added insights when exploring questions of ethical choice, and ethics instruction, particularly when the instruction is embedded in an accounting course. Finally, the researchers find that the level of DIT P scores reported in the studies relates to whether the study was published. They discuss the implications of these findings for future research.

More information is available at: Anne L. Christensen, Jane Cote & Claire K. Latham. 2016. Insights Regarding the Applicability of the Defining Issues Test to Advance Ethics Research with Accounting Students: A Meta-analytic Review.
Journal of Business Ethics, 133(1), 141-163.

Negative returns for MBAs focused on investment banking
Recent scholarship on the returns to labor market specialization often claims that being specialized is advantageous for job candidates. Jennifer Merluzzi and Damon Phillips argue, in contrast, that a specialist discount may occur in contexts that share three features: strong institutionalized mechanisms, candidate profiles with direct investments that signal their value, and a high supply of focused candidates relative to demand. They then test whether there is a specialist discount for graduating elite MBAs, as it is a labour market that exemplifies these conditions under which they expect specialists to be penalized.

Using rich data on two graduating cohorts from a top-tier U.S. business school, the authors show that elite MBA graduates who established a focused (specialised) market profile of experiences relating to investment banking before and during the program were less likely to receive multiple job offers and were offered less in starting-bonus compensation than similar MBA candidates with no exposure or less-focused exposure to investment banking. The theory and findings suggest that the oft-documented specialist advantage may be overstated.

Read the full -text article for free: Jennifer Merluzzi & Damon J. Phillips. 2016. The Specialist Discount: Negative Returns for MBAs with Focused Profiles in Investment Banking.
Administrative Science Quarterly, 61(1), 87-124.