Summary by James R. Martin, Ph.D., CMA
Professor Emeritus, University of South Florida
The authors integrate cross-cultural issues and ethics by using Hofstede's measures of cultural differences (see the links below). Their purpose is to identify cross-cultural problems in auditor's ethical perspectives regarding questionable client behavior. The table below provides a summary of these problems.
|Cultural Values and Potential Negative Ethical Conflicts*|
|Cultural Value||Possible Negative Ethical Behavior|
|Uncertainty Avoidance||Weak||Failure to accept consistent procedures|
|Strong||Focus on rules to the exclusion of asking whether the procedure leads to an ethical outcome.|
|Individualist||Failure to appreciate the existence and the efficacy of the self-correcting mechanism of family face.|
|Collectivist||Failure to "blow the whistle" on a member of the group to force a correction of the problem in a timely manner.|
|Masculinity||Focus on aggressive client generation and retention that may compromise the firm.|
|Power Distance||Large||Failure to follow the spirit of the law.|
|Short||Short-cuts to achieve performance goals.|
|* Adapted from Table 1, page 11.|
Chow, C. W., Y. Kato and K. A. Merchant. 1996. The use of organizational controls and their effects on data manipulation and management myopia: A Japan vs. U.S. comparison. Accounting, Organizations and Society 21(2-3): 175-192. (Summary).
Handy, C. 2002. What's a business for? Harvard Business Review (December): 49-55. (Summary).
Healy, P. M. and J. M. Wahlen. 1999. A review of the earnings management literature and its implications for standard setting. Accounting Horizons (December): 365-383. (Summary).
Hofstede, G. 1980. Cultures Consequences: International Differences in Work-Related Values. Newbury Park, CA: Sage.
Hofstede, G. 1987. The cultural context of accounting. In Accounting and Culture: Plenary Session Papers and Discussants' Comments from the 1986 Annual Meeting of the American Accounting Association, edited by B. E. Cushing. American Accounting Association: 1-11. (Summary).
Hofstede, G. and H. Schreuder. 1987. A joint reply to Montagna. In Accounting and Culture: Plenary Session Papers and Discussants' Comments from the 1986 Annual Meeting of the American Accounting Association, edited by B. E. Cushing. American Accounting Association: 29-30. (Summary).
Lencioni, P. M. 2002. Make your values mean something. Harvard Business Review (July): 113-117. (Summary).
Romney, M. B., W. S. Albrecht and D. J. Cherrington. 1980. Red-flagging the white collar criminal. Management Accounting (March): 51-54, 57. (Note and list of Red Flags).
Waddock, S. 2005. Hollow men and women at the helm ... Hollow accounting ethics? Issues in Accounting Education (May): 145-150. (Summary).