Business Ethics VIII Reflection paper

Social Cognitive Theory: The Antecedents and Effects of Ethical Climate Fit on Organizational Attitudes of Corporate Accounting Professionals—A Reflection of Client Narcissism and Fraud Attitude Risk

Madeline Ann Domino • Stephen C. Wingreen •

James E. Blanton

Received: 14 May 2013 / Accepted: 30 April 2014 / Published online: 22 July 2014

� Springer Science+Business Media Dordrecht 2014

Abstract The rash of high-profile accounting frauds

involving internal corporate accountants calls into question

the individual accountant’s perceptions of the ethical cli-

mate within their organization and the limits to which these

professionals will tolerate unethical behavior and/or accept

it as the norm. This study uses social cognitive theory to

examine the antecedents of individual corporate accoun-

tant’s perceived personal fit with their organization’s eth-

ical climate and empirically tests how these factors impact

organizational attitudes. A survey was completed by 203

corporate accountants to assess their perception of relevant

variables. The results of the structural equation model

indicate three significant antecedents relating to ethical

climate fit: higher internal levels of locus of control;

greater numbers of prior job changes; and higher percep-

tions of an increasingly better fit with the firm’s ethical

climate (e.g., fit trend). Our results also indicate that higher

levels of perceived fit to the ethical climate of a firm are

associated with higher levels of perceived job satisfaction

and organizational commitment. We also theorize that

perceptions of an organization’s ethical climate may be

reflections of client narcissism and serve a potential indi-

cator of fraud risk. This is an important topic of study,

since current auditing standards call for auditors to exam-

ine organizational attitudes toward fraud, but offer minimal

guidance in doing so.

Keywords Accountants � Ethical climate fit � Fraud � Locus of control � Narcissism

Introduction

Can behavior considered normal and ethical in one orga-

nization be considered unethical by another? May an

individual act be viewed as professional within the orga-

nization, yet the same act be viewed by others outside the

organization and profession as unethical? The well-publi-

cized frauds at Enron, Fannie Mae, and Health South

involved corporate accounting professionals who worked at

all levels throughout the organization and were perpetuated

over extended periods of time. These defalcations serve as

excellent examples of how an organization’s internal eth-

ical standards, although normalized within the organization

(Ashford and Anand 2003), may be disconnected from

commonly held professional beliefs about right and wrong.

Several studies have demonstrated a link between an

organization’s ethical climate and its influences on indi-

viduals’ professional behavior and unethical workplace

behavior (Trevino et al. 1998; Deshpande et al. 2000;

Fritzsche 2000; Peterson 2002).

The accounting literature establishes a very strong pro-

fessional identity of accountants to ethics (Winter 1928;

Myer 1931; Peloubet 1955; Loeb 1971; Fatt 1995) and the

study of ethics continues to be an important topic of

accounting research (Spalding and Oddo 2011; Hagel

M. A. Domino (&) Department of Accounting, Stetson School of Business and

Economics, Mercer University, Macon, GA 31207, USA

e-mail: [email protected]; [email protected]

S. C. Wingreen

Department of Accounting and Information Systems, University

of Canterbury, Christchurch, New Zealand

e-mail: [email protected]

J. E. Blanton

Department of Information Systems and Decision Support,

College of Business Administration, University of South Florida,

Tampa, FL 33620, USA

e-mail: [email protected]

123

J Bus Ethics (2015) 131:453–467

DOI 10.1007/s10551-014-2210-z

2012; Anderson 2013; Davidson and Stevens 2013; Ger-

stein and Friedman 2013). Yet despite the accounting

profession’s emphasis on adhering to the highest standards

of ethical conduct, the rash of high-profile breaches of trust

continues at an alarming rate, often perpetuated by the

entrusted corporate accountants who work within the

organization (Business Week 2002; Wall Street Journal

2007; New York Times 2007, 2009; New York Daily News

2009).

The breadth of these frauds generated by internal cor-

porate accountants suggests that these consequences are

much more than just coincidental. Anecdotally, these

breaches call into question the corporate accountant’s

perceptions of the ethical climate within the organization

and the limits to which these professionals will tolerate

unethical behavior and/or accept it as the norm. Given the

unique position of the corporate accountant to condone

and/or participate in unethical behavior, it is proposed that

the degree to which their ethical beliefs fit with the orga-

nization’s ethical climate may affect their ethical behavior,

and therefore is an important topic of study. The organi-

zation’s ethical climate is of particular relevance to cor-

porate accountants, as it uniquely portrays the standards of

right and wrong for issues and situations within an orga-

nizational context.

Ethical climate fit has been shown to be a factor in the

development of person-organization fit (Sims and Keon

1997). This study uses the definition of ethical climate

proposed by previous research and subsequently re-vali-

dated—that the ethical climate is the prevailing perceptions

of typical organizational practices and procedures that have

ethical relevance (Victor and Cullen 1988; Sims and Keon

1997; Cullen et al. 2003). Ethical climate has been linked

to organizational ethical values and behavior (Winbush and

Shepard 1994; Verbeke et al. 1996).

Social cognitive theory (SCT) is used as a theoretical

underpinning to improve the understanding of the rela-

tionships between a corporate accountant’s fit to the ethical

climate of the organization and organizational attitudes.

SCT proposes that an individual’s beliefs and motives form

the basis for value judgments and morality and that their

resulting moral conduct reflects both personal factors as

well as the environment (Wood and Bandura 1989). SCT

suggests that corporate accountants with high levels of

ethical climate fit may be more willing to participate in or

condone acts, such as accounting fraud, which may be

considered the norm within the culture of the organization.

Conversely, corporate accountants with low levels of eth-

ical climate fit may experience high levels of internal

dissonance, resulting in lower levels of job satisfaction and

organizational commitment. Prior research has established

that lower levels of job satisfaction and organizational

commitment result in higher turnover and intentions of

turnover (Aranya and Ferris 1984; Gregson 1992; Poz-

nanski and Bline 1997).

Based on SCT, a multidimensional operationalization of

the corporate accountant’s ethical climate fit construct is

developed and empirical tests are performed to determine

its relationship to the organizational attitudes of job satis-

faction and organizational commitment. In addition, two

individual differences which are relevant to SCT, locus of

control and self-efficacy, are also examined as antecedents.

Figure 1 illustrates this study’s conceptual model.

Current auditing standards advocate the consideration of

organizational attitudes toward fraud when making fraud

assessments (International Auditing and Assurance Stan-

dards Board (IAASB) 2009). Recent auditing research

focuses on client narcissism as a potential indicator of

fraud risk (Johnson et al. 2013). Narcissism is a personality

dimension associated with Machiavellian strategies of self-

interest, manipulation, deception, inflated views of self-

worth and importance, often associated with a ‘‘dark side’’

(Paulhus and Williams 2002). ‘‘Narcissism has been used

with increasing frequency to describe behavior in organi-

zations, most notably in the process of explaining the

destructive behaviors of CEOs and politicians’’ (Campbell

et al. 2011, p. 1). Maccoby (2003) advanced the notion that

narcissism may be viewed as on a continuum—as good or

bad, as constructive or destructive. Extremes of narcissistic

behavior lie on either sides of the continuum. Constructive

narcissists (CN) may be charismatic, innovative and

adaptable with little need to distort reality (Kets de Vries

and Miller 1985). Conversely, destructive narcissists (DN)

see achievement as a game, where there are winners and

losers, and their desire is to win at all costs (Lubit 2002).

DNs are more prone to unethical behavior within an

organizational setting (Kets de Vries and Miller 1985;

Lubit 2002; Campbell et al. 2011) as these individuals

believe they deserve more positive outcomes (Huseman

et al. 1987). Chatterjee and Hambrick (2007) found that

narcissistic chief executive officers engender extremes and

fluctuations in organizational performance. Individual

personality traits moderate the rationalization to engage in

accounting fraud and earnings manipulation (Zahra et al.

2005, 2007; Troy et al. 2011). Given that corporate per-

formance focuses on the bottom line, accounting policies

may often be the tool used by highly narcissistic managers

to facilitate unethical acts as they focus on self-interests

Ethical Climate Fit

Individual Differences

Organizational Attitudes

Locus of Control

Self- Efficacy

Job Satisfaction

Organizational Commitment

Fig. 1 Conceptual model

454 M. A. Domino et al.

123

(Brown 1997; Anderson and Tirrell 2004; Duchon and

Drake 2009; Amernic and Craig 2010). While CEO nar-

cissism has been linked to higher earnings per share (Olsen

et al. 2013), Rijsenbilt (2011) found that CEOs who are

highly narcissistic were more likely to commit fraud. High

levels of management narcissism and low standards of

integrity have also been associated with unethical behavior

within organizations (Schwartz 1991; Duchon and Drake

2009; Amernic and Craig 2010; Hunton et al. 2011; Rij-

senbilt and Commandeur 2013).

Unethical judgments and clouded decision making have

been linked with narcissistic leaders acting in their own

interests (Campbell et al. 2011; Rijsenbilt and Comman-

deur 2013). Ethical leadership has also been shown to

impact employees’ perceptions, as well as how employees

behave (Trevino 1986; Brown and Trevino 2006). Duchon

and Drake (2009) contended that extremely narcissistic

organizations lack moral integrity and thus are unable to

behave in an ethical manner, even if formal codes of ethics

are in place. Since top management directs the firm, it is

suggested that management narcissism and tone impact an

organization’s ethical climate. To put it another way, eth-

ical climates are established by executive management and

trickle down to the rest of the organization. Thus, it is

theorized that ethical climate is reflective of organizational

attitudes toward fraud.

Morf and Rhodewalt (2001) described narcissism as a

personality trait in which an individual has elevated levels

of self-focus, a sense of entitlement and an expectation of

special treatment. Psychologists have differentiated types

of narcissism, such as identifying trait narcissism as a

stable personality trait found in the general population

(Foster and Campbell 2007). Interestingly, the organiza-

tional psychology literature has also linked narcissism to

negative consequences, such as less-effective corporate

governance and a lax or an aggressive tone at the top

(Salter 2008; Amernic and Craig 2010; Johnson et al.

2013). High levels of trait narcissism are related to

unethical behavior (Brown et al. 2009; Brunell et al. 2011),

as well as to low levels of personal integrity (Schlenker

2008). Accounting research finds positive associations

between manager narcissism and aggressive financial

reporting (Hales et al. 2011). Rijsenbilt (2011) found a

significant association between reported fraud in the SEC

Audit and Accounting Releases and CEO narcissism. Pre-

sumably, extremely narcissistic organizations are led by

managers who are highly destructive narcissists (Amernic

and Craig 2010). Thus, these linkages of overly aggressive

accounting and accounting fraud are consistent with prior

research findings that managers with high degrees of DN

are frequently exploitive and ruthless (Lubit 2002). Very

high levels of narcissism (extreme narcissism) may mani-

fest in interpersonal alienation and more flawed decision

making, since these managers must satisfy their need for

bold actions resulting in big gains or big losses (Chatterjee

and Hambrick 2007). Extreme narcissism has been linked

to a lack of management integrity (Blair et al. 2008), as

these individuals have a propensity to deceive and

manipulate others in order to reach their own goals (Kets

de Vries and Miller 1985). Menon and Sharland (2011)

proposed a framework for academic dishonesty which

includes narcissism as a core construct.

The auditing standards describe fraud attitude as a mind-

set, a set of ethical standards or rationalizations that justifies

fraud. Management integrity is a key element of fraud atti-

tude and the assessment of fraud risk (IAASB 2009). Rij-

senbilt and Commandeur (2013) found that CEO narcissism

is a cause of fraud. Thus, it is theorized that an organization’s

ethical climate reflects the mind-set of top management and

the ethical standards of the firm, and that these factors are of

relevance to the auditor in assessing fraud risk.

The remainder of this paper is organized as follows: In

the next section, the theoretical foundation and the research

model are presented and the hypotheses are developed.

Narcissism and its theorized impact on the ethical climate

of the organization are discussed. Finally, the results are

presented and the study findings are discussed.

Social Cognitive Theory, Research Model

And Hypotheses Development

Drawing from the fields of psychology and sociology,

social cognitive theory (SCT) proposes that an individual’s

beliefs and motives are formed on the basis of value

judgments (Wood and Bandura 1989). SCT also proposes

that morality must explain how moral reasoning, in con-

junction with other psychosocial factors, governs moral

conduct. Thus, ‘‘social cognitive theory adopts an interac-

tionist perspective to moral phenomena’’ and presents a

framework in which ‘‘personal factors, such as moral

thought and affective self-reactions, moral conduct and

environmental factors all operate as interacting determi-

nants that influence each other in determining outcomes’’

(Bandura 1986, p. 2). This interpretation of SCT is con-

sistent with the early works of Dr. Kurt Z. Lewin, in his

book, Principals of Topological Psychology. Lewin (1936)

presented and discussed an interaction formula where a

person’s behavior (B) is a function the person’s charac-

teristics (P) and the relevant factors concerning the per-

son’s environment (E). Two personality variables, locus of

control (LC) and self-efficacy (SE), provide measures of

the socio-cognitive individual differences, which are con-

sidered to be important elements of SCT.

According to SCT, individuals regulate their behavior

by continually engaging in the self-assessment of their own

Social Cognitive Theory 455

123

standard of conduct in comparison with environmental

circumstances (Bandura 1986), which by definition

encompasses the ethical climate. Therefore, as the indi-

vidual is continually engaged in the self-evaluation of

personal conduct (e.g., as compared to the general climate

of the organization) and to the extent that personal ethics

have self-regulatory value, and as long as compliance with

the ethical climate is not regarded to be morally repre-

hensible, it is theorized that the individual will form

motives to close the gap between personal ethical conduct

and the ethical climate. In other words, an individual will

seek to improve his/her ethical climate fit to the extent the

ethical climate ‘‘agrees’’ with the individual’s own ethical

values, whether those values are held to be ‘‘good’’ or

‘‘bad.’’ This includes the possibility that a corporate

accountant may seek to improve his ethical climate fit in

the organization which is directed by narcissistic

management.

Much of the research in accounting ethics uses theories

of staged moral development as a theoretical underpinning

to explain unethical behavior. These theories ascribe to a

fixed, hierarchical development sequence for each indi-

vidual as a means to explain his/her moral reasoning. SCT

provides a strong contrast to stage theories of moral rea-

soning and the debate over the prescribed nature of stage

theory. For example, Locke (1979, 1980) suggested that

moral reasoning is better measured based on personal

preferences, rather than on obtaining some hierarchical

level of competence. Also, Kohlberg (1973) conceded that

his stages of development are not prescriptive in nature,

since they focus on the form of reasoning but not content.

Thus, a principal issue of theoretical dispute is the validity

of strict lockstep stages of development (Bandura 1986).

It is proposed that the ethical behavior of corporate

accountants is guided by both internal values as well as

external sources. Internal values are personal and self-

guided beliefs, while external sources include the social

standards of one’s organizational surroundings (Jensen and

Wygant 1990). Thus, it is expected that a corporate

accountant’s belief about his fit with his organization’s

ethical climate is predictive of organizational commitment

and job satisfaction, which in turn relates to negative

effects such as turnover with the firm.

Ethical Climate and Ethical Climate Fit

The research literature tends to treat professional ethics as

the body of commonly accepted professional practices and

behaviors, whereas ethical climate refers more to a group

of prescriptive climates that suggest organizational prac-

tices with moral consequences (Cullen et al. 2003). The

ethical climate consists of a shared perception of the milieu

of organizational ethical standards and the various personal

ethics practiced by the members of the organization. It is

necessary to distinguish ethics, which comprise commonly

accepted practices, such as community behavior standards

or professional codes of conduct, from morals, which

involve judgments concerning right and wrong (Bonhoeffer

1955). The organizational ethical climate is underscored by

reinforcement of ethical conduct (Mumford and Helton

2000) and ethical climate is proposed to have a significant

role in the way members of an organization behave, be it

ethically or unethically (Schneider 1975; Stead et al. 1990;

Victor and Cullen 1988; Agarwal and Malloy 1999; Malloy

and Agarwal 2000). Hartman et al. (1999) proposed that

perceptions of justice are key elements in the ethical cli-

mate, which influence ethical behavior. In organizations,

the behavior of individuals in leadership roles will influ-

ence the integrity of their ‘‘followers’’ (Mumford and

Helton 2000, p. 80). Research shows that ethical climate

influences ethical decision making (Baumhart 1961; Sims

and Keon 1997; Shin 2012). Falkenberg and Herremans

(1995) found that ethical climate is the primary influence

on ethical behavior.

In a study of the organizational influences on individual

ethical behavior in accounting firms, Schlachter (1990)

proposed that it is the organization in which the accountant

works, with its written and unwritten policies, which

shapes behavior over time as individuals make choices

which have organizational consequences. Black (2005)

suggested the profit motive induces fraudulent behavior

and that the individuals with great moral fiber leave as the

climate becomes more unethical and they are not rewarded

financially when they do not conform. Peterson (2002)

found the evidence that ethical climates can influence

deviant behavior. A few studies focus on ethical climate fit,

although not from the specific perspectives of the corporate

accountants. A study of French managers, Herrbach and

Mignonac (2007), found that perceived organizational

ethical values were directly associated with the managers’

organizational commitment, job satisfaction and turnover

intentions. Shafer (2002) also found that ethical pressure

had a negative impact on corporate accountant’s commit-

ment and job satisfaction.

Cognitive dissonance theory has been used to explain

the cognitive aspects of ethical climate fit (Festinger 1957).

According to cognitive dissonance theory, cognitive dis-

sonance occurs when an individual is confronted with an

external reality that does not fit his/her internal reality. The

dissonance is resolved when individuals either adjust their

internal representation of reality, or adjust the external

reality, or a little of both.

It is argued that ethical climate fit is a unique aspect of

corporate accountant’s professional identity. Further, it is

argued that this identity is significant to differentiating the

corporate accountant’s organizational environment as

456 M. A. Domino et al.

123

compared to the organizational environment of other per-

sonnel within the firm.

Antecedents of Ethical Climate Fit

Individual differences have long been studied as determi-

nants of behavior in many disciplines, including accounting

research. This study examines two dominant constructs,

locus of control (LC) and self-efficacy (SE) that have been

identified within the framework of SCT as measures of

socio-cognitive individual differences.

Locus of Control

Rotter (1954) first conceptualized locus of control (LC) as

the aspect of personality characterized by a sense of control

over reward and reinforcement. According to Rotter, locus

of control is both a situational (environmental) and indi-

vidual variable. Beliefs about control of rewards or rein-

forcement are formed based on the individual’s generalized

expectancies learned from how rewards were acquired in

previous similar situations. While measured on a contin-

uum basis, an individual’s locus of control is discussed in

the academic literature as either ‘‘internals’’ or ‘‘externals.’’

‘‘Internals’’ exercise control over their life by the choices

they make and outcomes are the product of their efforts. In

contrast, ‘‘externals’’ believe their destiny is controlled by

powerful others, forces outside their control, luck and other

capricious forces, and often may not own up to personal

responsibility. So locus of control depends on the degree to

which one relies on oneself or on others for reinforcement

(Rotter 1954) and may be viewed on a continuum. It is

reasonable to expect that ‘‘internals’’ might be more pro-

active in their ethical fit behavior, while ‘‘externals’’ might

be more likely to acquiesce to an undesirable or uncom-

fortable ethical climate.

Locus of control has been studied in the accounting

literature, but minimal research studies of this personality

variable focus on this construct in the context of accounting

ethics. For example, Brownell (1981) explored the impact

of internal/external locus of control as a moderator between

an accountant’s budgetary participation and budgetary

performance and suggests that accountants who are inter-

nals have higher levels of participating in the budget pro-

cess, as well as better performance on a budgeting task.

Brownell (1982) found similar results in a subsequent field

study on budgetary participation.

Tsui and Ferdinad (1996) found that experienced audi-

tors’ locus of control moderated requests by a client to

accede to unethical behavior and suggests that the per-

sonality variable of locus of control moderates ethical

decision making and provides a better understanding of

differing outcomes among individual auditors. Frucot and

Shearon’s (1991) study of accountants found an interrela-

tionship of internal locus of control with budgetary par-

ticipation, as well as with both management performance

and job satisfaction. Hyatt and Prawitt (2001) examined

individual auditor locus of control in a study of audit firm

structure and performance. The study results indicate that

auditors with ‘‘internal’’ locus of control had higher levels

of job performance in an unstructured firm than a struc-

tured firm while auditors with ‘‘external’’ locus of control

had higher levels of job performance and satisfaction in a

structured environment. Hence, it is hypothesized:

Hypothesis 1 Corporate accountants who have higher

levels of internal locus of control will

have higher levels of ethical climate fit

Hypothesis 1a Corporate accountants with higher levels

of internal locus of control will have

higher levels of job satisfaction

Self-efficacy

Self-efficacy (SE) represents an individual’s expectations

of their performance on specific tasks (Wood and Bandura

1989). Self-efficacy, for its ability to explain the skill

acquisition and performance behaviors of accounting pro-

fessionals, has been a construct of interest in previous

research. Bandura (1986) defined self-efficacy as ‘‘people’s

judgments of their capabilities to organize and execute

courses of action required to attain designated types of

performances.’’ As such, self-efficacy represents an indi-

vidual’s expectations of their performance on specific tasks

and underlies all human motivation and accomplishment

(Wood and Bandura 1989). Therefore, persons with high

self-efficacy are more likely to set higher goals and accept

challenging tasks than their counterparts with low self-

efficacy.

Self-efficacy, like locus of control, operates in reference

to generalized expectancies, and hence is also referred to as

‘‘generalized self-efficacy.’’ Therefore, individuals’ self-

efficacy beliefs are not entirely based on their past per-

formance of the same behavior, but also include expec-

tancies that are generalized from previous similar behavior.

In other words, self-efficacy pertains to a person’s gen-

eralized beliefs about their abilities, and not necessarily to

whether or not they do, in fact, actually possess the abilities

in question.

It is theorized that accounting professionals with high

levels of self-efficacy in regard to their general accounting

ability should possess expectancies that they are able to

successfully engage in gap-closing behavior to maintain a

minimum fit distance between themselves and the organi-

zation, should the need arise. For example, corporate

accountant’s self-efficacy may be generalized to their

Social Cognitive Theory 457

123

potential ability to be a budget analyst, when, in fact, they

know very little about budgeting. Although deficient in the

requisite skill set, they would nonetheless exhibit consid-

erable effort, determination and motivation in their

attempts to operate the database. Therefore, self-efficacy is

theorized to affect motivation to engage in gap-closing

behavior because individual’s beliefs in their own abilities

directly affect their expectancies, which in turn affect

motivation. Hence, it is hypothesized:

Hypothesis 2 Corporate accountants with higher levels

of self-efficacy will have higher levels of

ethical climate fit

Consequences of Ethical Climate Fit

Job Satisfaction

Job satisfaction is one of a key number of outcomes studied

when investigating accountants in the work context. An

employee’s satisfaction level was greater when the

employees found themselves in work climates that they

preferred (Sims and Keon 1997). Norris and Niebuhr

(1984) found that Big 8 accountants committed to their

organization had higher levels of job satisfaction. Glover

et al. (2000) found that job satisfaction of African Amer-

ican accountants was similar to prior studies and was

predictive of intention to turnover. Valentine et al. (2006)

found that corporate ethical values, along with perceived

organizational support, had an impact on job satisfaction

and turnover. Shafer (2002) also found a positive rela-

tionship between managerial accountants’ job satisfaction

and their perceptions of minimal ethical pressure. As a

result, in evaluating accounting professional’s ethical cli-

mate fit, job satisfaction is an anticipated moderator

between fit and organizational commitment. Therefore, it is

hypothesized:

Hypothesis 3 Corporate accountants with higher levels

of ethical climate fit will have higher

levels of job satisfaction

Organizational Commitment

Since the organizational commitment construct first

became of interest as a better explanation of employee

turnover, its definition and internal structure has been the

subject of scholarly debate. Organizational commitment is

defined as ‘‘the relative strength of an individual’s identi-

fication with and involvement in a particular organization’’

(Steers 1977, p. 46). Following an extensive review of

turnover and organizational commitment literature, a rela-

tively complex model of employee turnover that accounted

for many of the factors that are rolled up into the organi-

zational commitment construct was developed (Mobley

et al. 1979). A three-component model was proposed in

which organizational commitment was defined as having

shared goals and values, individual effort and membership

components (Mowday et al. 1979). The three-component

model has become the dominant model of organizational

commitment and has been refined through subsequent

research (Allen and Meyer 1990; Jaros et al. 1993; Meyer

and Allen 1991; Meyer et al. 1993) and, in its current form,

proposes that organizational commitment is comprised of

the affective, continuance and normative (moral)

subdimensions.

According to Meyer and Allen (1991), affective com-

mitment is the individual’s feeling of attachment, loyalty or

strength of emotional connection to the organization that

stands independently from the instrumental assessment of

the organization’s value. That is the individual’s calcula-

tion of the ‘‘bottom line’’ of the organization’s worth to the

individual.

Continuance commitment has been defined consistently

with the concept of ‘‘side bets’’ (Becker 1960), where an

individual forms a commitment to an activity based on a

mental calculation of the number of ‘‘side bets’’ that would

be lost if the activity was discontinued. In this regard, the

individual weighs the perceived profit that would accrue if

employment was discontinued versus the cost from all

other factors against the benefits to be realized from

continuing employment with the current organization.

Normative commitment, which is sometimes known as

moral commitment, refers to the individual’s commitment

that arises out of a sense of mutual obligation or moral

dedication between the individual and the organization.

Normative commitment, for instance, may be the outcome

of a psychological contract between the organization and

the employee (Roepke et al. 2000), where the organization

upholds its part in an implicit contract to provide the

accounting professional with adequate training and pro-

fessional development opportunities. Normative commit-

ment may also be a negative outcome that occurs when the

accounting professional no longer believes it is right to

remain employed with the current organization. In this

study, affective and normative commitment will be mod-

eled as the outcome of good ethical climate fit.

Prior studies find that individuals who believe that their

own ethical values are in conflict with their organizations’

values will be less committed to the organization (Sims and

Kroeck 1994) and that the ethical organizational context is

related to organizational commitment (Cullen et al. 2003).

Aranya and Ferris (1984) examined accounting profes-

sionals who worked in private industry and found that they

had higher levels of perceived organizational and profes-

sional conflict than accountants employed by public

458 M. A. Domino et al.

123

accounting firms. Shafer (2002) explored ethical pressure

on management accountants to participate in unethical

actions at work. Perceived pressure to engage in behavior

which is deemed unethical would be a source of organi-

zational conflict. The findings of Shafer (2002) suggested

that perceived pressure to engage in unethical actions is

positively related to higher levels of conflict, which reduces

organizational commitment and job satisfaction.

Ponemon and Gabhart (1990) introduced the notion of

affiliation or fit as it relates to the accounting professional

and defined fit as the amount of affiliation by which a

single individual learns to ‘‘fit in’’ with his/her immediate

work group. It is theorized that conflict by the corporate

accountant with the ethical climate of the organization will

be directly associated with organizational commitment.

Hence, it is hypothesized:

Hypothesis 4 Corporate accountants with higher levels

of ethical climate fit will have higher

levels of organizational commitment

In the accounting literature, job satisfaction and orga-

nizational commitment have been studied in the context of

turnover of accountants. Job satisfaction of accountants is a

factor in organizational commitment and ultimately in

turnover (Gregson 1992; Aranya and Ferris 1984; Shafer

2002, 2009). Leong et al. (2003) studied organizational

commitment of external auditors and accountants in public

accounting firms. Using a field-based study of auditors,

Leong et al. (2003) found a positive relationship between

organizational commitment and job involvement. In a

study of staff accountants working in public accounting

firms, Poznanski and Bline (1997) reported job satisfaction

and organizational commitment as antecedents to turnover

and intentions to leave the organization. In a study of

internal auditors, Quarles (1994) also reported a significant

relationship between organizational commitment and job

satisfaction, as well as an inverse relationship between and

job satisfaction and turnover intentions. Bullen and Flam-

holtz (1985) reported job satisfaction as a significant pre-

dictor of the probability of turnover of accountants

employed by a large CPA firm. Hence, it is hypothesized:

Hypothesis 5 Corporate accountants with higher levels

of job satisfaction will have higher levels

of organizational commitment

Control Variables

In addition to the previously discussed variables, we also

include and test several control variables that may affect

the relationship between the antecedents of ethical climate

fit and the outcome variables. The control variables

included in the study are number of job changes, number of

employer changes, job level and fit trend. Fit trend is the

employee’s perception of increasing ethical climate fit with

the firm.

Based upon SCT and these discussions, Fig. 2 is pre-

sented as the research model of our study. In the next

section, we discuss the research method used to collect the

data and the research model.

Research Method

Measurement

The initial instrumentation adopted for this study consisted

of items from existing scales (Appendix), which were then

refined and revised with a four-phased pilot test. Given the

goal of this research is to investigate the dynamic of the

corporate accountant—organization relationship, it neces-

sitates the accountant to maintain a degree of professional

freedom and discretion. Therefore, four items were adapted

from the ‘‘independence’’ dimension of the Ethical Climate

Scale (Victor and Cullen 1988) to measure ethical climate

fit. To minimize threats to the operational validity of the

ethical climate construct in this research, the same instru-

mentation, which was proposed and validated by Victor

and Cullen (1988), was adopted as our theoretical defini-

tion of ethical climate. It was the judgment of the

researchers that any advantages that may have been gained

by considering other instrumentation were outweighed by

the disadvantages of introducing potential threats to the

validity of our ethical climate construct; therefore, other

instruments were not considered. Job satisfaction was

assessed using five items adapted from the Job Satisfaction

Survey Scale (Spector 1994). Organizational commitment

was measured using the fifteen item Organization Com-

mitment Questionnaire (OCQ) (Mowday et al. 1979). The

measurements for self-efficacy were adapted from the

Sherer and Adams’ (1983) instrument. Locus of control

was adapted from the Work Locus of Control Scale

(WLCS) (Spector 1988). All scales demonstrated adequate

reliability (a [ 0.70). All measurements were made using Likert-type items on a scale of 1–6, with 1 being low, or

negative affect, and 6 being high, or positive affect.

Pilot Test and Instrument Development

Prior to conducting the study, instruments were tested and

refined by means of pilot testing. Pilot testing was

accomplished in three phases: development and refinement

of items using expert evaluators (phase 1), qualitative

discussion (phase 2) in small groups (two groups of n = 3

and n = 4) of undergraduate accounting students and the

pre-validation of the instrumentation and research model

Social Cognitive Theory 459

123

with a small sample of students (n = 26, phase 3) enrolled

in evening courses who are typically working career pro-

fessionals. Refinements were made to the instrument at the

completion of each phase of the pilot study.

Cronbach’s alpha method was used as the measure of

internal reliability for all scales. Table 1 reports the N,

Cronbach’s alpha and correlations for the summated scales

that resulted from phase 3 of the pilot study. All reliabili-

ties attained the minimum level of 0.70 suggested for

measured scales (Nunnally and Bernstein 1994).

The correlations between the scales offer a glimpse that

the proposed research model may be valid. The study

proceeded under the assumption that a larger, representa-

tive sample would bear this out.

Data Analysis

Data Collection

The participants in the study were drawn from seven sep-

arate convenience samples from universities in Florida.

The universities have accounting programs at the under-

graduate and graduate level and offer night classes that are

populated primarily by working professionals with ‘‘day

jobs,’’ in other words, ‘‘non-traditional’’ students. Two of

the universities have multiple campuses spread over a large

geographic area. Alumni lists were obtained for graduates

of these programs, and invitations to participate were

mailed to all alumni from both universities. A first and a

second mailing were conducted to facilitate maximum

participation and response. Mailings indicated that the

Institutional Research Bulletin (IRB) documentation was

available from the authors upon request and contained an

informed consent form, which all participants signed and

returned. Participation was voluntary. No incentive was

offered for participation.

Sample Design

Data were gathered from N = 213 corporate accounting

professionals. Of these subjects, 203 were included in the

study, reflecting the fact that some participants did not

complete the entire survey instrument.

Given the potentially sensitive nature of ethical climate

research and the possibility of ‘‘social desirability bias,’’

thorough tests of various types of response bias were

conducted to ensure the validity of the data. The study-

wide response rate is estimated at 13 % of the total sample

Table 1 N, Cronbach’s alpha and interscale correlations for

phase 3 of the pilot study

Scale N Cronbach’s

alpha

Correlation from/to

Ethical

climate fit

Job satisfaction Organizational

commitment

Self-

efficacy

Ethical climate fit 26 0.87

Job satisfaction 26 0.77 0.30

Organizational commitment 26 0.90 0.53 0.74

Self-efficacy 26 0.84 -0.02 0.06 -0.14

Internal locus of control 26 0.71 0.62 0.50 0.54 0.09

Locus of Control

Self-efficacy

Control Variables:

Number of Job Changes

Number of Employer Changes Job Level

Increasing Fit Trend

Organizational Commitment

Job Satisfaction

Ethical Climate Fit

H1

H1a

H2 H3

H4

H5

Fig. 2 Research model

460 M. A. Domino et al.

123

frame, which included a 58 % response rate from working

accountants attending evening classes in an MS/MBA

program, and an 8 % response rate from a mass mailing

that went out to alumni of two different universities. A

simple test of significance between these two groups

revealed no significant differences (a = 0.05) with regard to the dependent variables; therefore, the overall response

rate of 13 % was judged not to be a threat to the validity of

the data. Non-respondents are defined as those who either

provided no response, incomplete, or otherwise unusable

responses. Non-response bias was evaluated by comparing

those who declined to participate in the study for any

reason (unwilling, unable, unemployed, etc.) but elected to

complete a short section of the questionnaire that requested

their demographic information only, with those who pro-

vided complete responses. A test of significance (a = 0.05) revealed no significant differences between these two

groups with regard to their demographic composition.

Also, those who did not respond to the first mailing, but

who responded to a follow-up reminder, are by definition

non-responders to the first mailing, and therefore, a test of

significance was administered to compare the first and

second mailings (a = 0.05). This test was insignificant,

which provided further evidence that the study would not

suffer a threat from response bias. Given that none of the

various tests were significant, it is concluded that there is a

very low likelihood that response bias will be a threat in

this study.

Descriptive statistics were generated in order to compare

the demographic characteristics. Although there are some

small demographic differences between the groups, there

was no indication that they would pose threat to the sam-

ple’s generalizability. The organizational affiliations

reported by respondents reveals n = 136 different organi-

zations are represented in the sample. Although it is a

collection of convenience samples, rather than a true ran-

dom sample, there is sufficient diversity between the con-

venience samples that, when considered collectively, it is

statistically valid. Demographic data indicate that n = 116,

or 57 %, of the subjects in the study were females and

n = 87 or 43 %, were males. The ages of the participants

are as follows: n = 25 (12 %) were under 25 years of age;

n = 70 (34 %) were between 25 and 29 years of age;

n = 38 (19 %) were between 30 and 34 years of age;

n = 28 (14 %) were between 35 and 39 years of age;

n = 24 (12 %) were between 40 and 44; the remaining

subjects, n = 18 (9 %), were between the ages of 45 and

67. Eighty-one percent (81 %) of the subjects were white,

8 % were blacks, 5 % Hispanic and the remaining 5 %

were others. There was a range of work experience within

the group of subjects. Approximately 48 % of the subjects

worked in corporate accounting environments for

1–4 years; 33 % of the subjects worked for 4–10 years;

8 % of the subjects worked for 10–15 years; the remaining

8 % of the subjects worked for 15 or more years. Of this

last group, approximately 4 % had over 21 years of inter-

nal corporate accounting experience.

Control variables

The control variables fit trend, number of prior job chan-

ges, number of prior employer changes and job level

(senior management, middle management, lower or non-

management) were tested using chi-square difference tests

to determine whether their effects should be modeled

(Table 3). A chi-square difference test examines the dif-

ference between a critical chi-square value for a specified

type 1 error probability and number of degrees of freedom

and the decrease in chi square value resulting from the

inclusion of the control variable by specifying its effect on

all dependent variables. If the inclusion of a control vari-

able produced a significant decrease in the chi-square value

according to this criterion, tests of individual paths were

then conducted between the control variable and each

dependent variable in the research model.

Cronbach’s alpha method was used as the measure of

internal reliability for all scales. Table 2 reports the N,

Cronbach’s alpha and correlations for the summated scales

that resulted from the final study. All reliabilities attained

the minimum level of 0.70 suggested for measured scales

(Nunnally and Bernstein 1994) which are within the

acceptable range.

Any control variable that produces a chi-square differ-

ence equal to 0.05 that is greater than 3.84 for one degree

of freedom (individual paths) and 7.81 for three degrees of

freedom (all paths at once) is judged to have significant

effects (Table 3). Fit trend, whose inclusion produced a

106.8 point decrease in the chi-square value of the model,

demonstrates significant effects with all three dependent

variables. The path between job changes and ethical cli-

mate fit produced a significant 4.1 decrease in chi-square

value and will also be included in the model.

Path Analysis

A path model was specified using SAS Proc CALIS, which

performs a procedure that is statistically identical to LIS-

REL. Figure 3 reports the results of the procedure with its

associated fit statistics, standardized path and variance

estimates, and estimates of R-squared for each dependent

variable. Insignificant paths are indicated with dashed

lines.

The fit statistics, which evaluate the research model’s

ability to explain the data, are unanimous in their support

of the research model. First, the p [ chi-square statistic is non-significant at a value of 0.12. The null hypothesis tests

Social Cognitive Theory 461

123

whether there is a perfect fit between the covariance

matrices of the sample and the one implied by the model.

Therefore, failue to reject the null hypothesis means that

the research model fits the data very well. Previous

research suggests that values of chi-square difference

below 2.0, root mean squared error of approximation

(RMSEA) values less than 0.05, values of AGFI above

0.90 and values of Bentler’s Comparative Fit Index (CFI)

above 0.90 are indicators of excellent model fit (Schu-

macker and Lomax 2010). The research model demon-

strates values of chi-square difference = 1.55,

RMSEA = 0.05, Adjusted Goodness of Fit Index

(AGFI) = 0.94 and Bentler’s CFI = 0.99, all of which

lend strong support to the hypothesis that the research

model as specified very closely reproduces the covariance

matrix observed in the primary data.

Overall, the model also demonstrates a strong predictive

ability as observed in the R 2 estimates reported for the

dependent variables. Specifically, the model explains 67 %

of the variance in organizational commitment, 35 % of the

variance in job satisfaction and 42 % of the variance in

ethical climate fit. Of all the independent variables, fit trend

demonstrates the strongest effects with a 0.57 standardized

effect on ethical climate fit, 0.31 standardized effects on

job satisfaction and 0.17 standardized effects on organi-

zational commitment. At a value of 0.56, the effect

between job satisfaction and organizational commitment is

the strongest in the domain of the primary research model.

Ethical climate fit (Hypotheses 3 and 4) is significantly

related to both job satisfaction and organizational com-

mitment, with standardized effects of 0.28 and 0.23,

respectively. High internal locus of control is significantly

“Internal l” Locus of

Control

Self-efficacy

Increasing Fit trend

Organizational Commitment

R 2 = 0.67

Job Satisfaction R 2 = 0.35

Ethical Fit R 2 = 0.420.19

0.04

0.39

0.56

0.23

0.170.310.57

0.28

0.16

0.16

0.09

Fit statistics:

Chi-sq 12.78 Df 8 n 203 p>Chi-sq. 0.12 Chi-sq/df 1.55 RMSEA 0.05 AGFI 0.94 Bentler’s CFI 0.99

Number of Job changes

0.11 0.04

0.19

0.04

Fig. 3 Path model with standardized estimates and R

2

values

Table 2 N, Cronbach’s alpha and interscale correlations of the

study

Scale N Cronbach’s

alpha

Correlation from/to

Ethical

climate

fit

Job

satisfaction

Organizational

commitment

Self-

efficacy

Ethical climate fit 203 0.94

Job satisfaction 203 0.88 0.523

Organizational

commitment

203 0.92 0.626 0.774

Self-efficacy 203 0.80 0.131 0.109 0.065

Internal locus of control 203 0.73 0.325 0.331 0.339 0.391

Table 3 Chi-square difference tests for control variables

Global

chi-square

difference

Organizational

commitment

Job

satisfaction

Ethical

climate

fit

Increasing fit

trend

106.8 11.0 13.6 82.2

Number of

prior job

changes

4.1 0 0 4.1

Number of

prior

employer

changes

0.3 0 0.3 0

Job level 0.1 0.1 0 0.1

462 M. A. Domino et al.

123

related to job satisfaction, with a standardized effect of

0.16, and ethical climate fit, with a standardized effect of

0.16; thus, Hypotheses 1 and 5 are significant. The path

between self-efficacy (Hypothesis 2) and ethical climate fit

is not significant. Thus, four of the five hypotheses are

significant in the model.

Discussion

This study contributes to the ethics literature by exploring

the relationships between ethical climate fit and job satis-

faction and organizational commitment of corporate

accountants. Although previous studies on this topic have

explored some of the variables included in our research

model, minimal accounting research has linked ethical cli-

mate fit to organizational commitment and job satisfaction.

Given the self-perpetuating nature of an organization’s

ethical climate and the incidences of internally generated

accounting fraud generated by corporate accountants, this is

an important topic of study. To date, most of the accounting

research on ethics has focused on auditors and has explored

ethical decision making, utilizing staged theories of moral

development and little research has focused on SCT.

The study explores how ethical climate may impact

organizational commitment. This is of importance given

both the keen competition to retain management account-

ing professionals and the continued emphasis on ethical

organizational behavior. From a practitioner perspective,

the research provides information about insights into ethi-

cal climate fit for corporate accountants, who are poten-

tially in a position to commit fraud or act ethically at their

companies and potential employee turnover in a period of

scarce accounting personnel.

It is also theorized that an organization’s ethical climate

may reflect management narcissism and fraud attitude risk.

Current auditing standards prescribe that auditors evaluate

fraud risk but offer minimal insights as how to approach

this issue. The extant accounting literature shows high

levels of client narcissism and a lax level of integrity at the

top of the organization impact perceptions about the

organization’s ethical climate and has been associated with

fraud. It is suggested that the organization’s ethical climate

allows a mind-set and ethical position that easily allows the

justification and rationalization of accounting fraud. While

the study does not directly test the proposed theory outlined

in this paper, it does demonstrate that the ethical climate,

whether good or bad, is adopted by corporate accountants

and this would include perceptions of client narcissism and

lack of integrity. To date, minimal research has suggested a

link between ethical climate and client narcissism and

fraud attitude risk, and therefore, this research breaks the

ground for further research on the topic. Additionally,

minimal research to date has explored the antecedents of

ethical climate fit (Shin 2012).

Overall, the research affirms the study’s proposition that

SCT provides an adequate interpretation of the corporate

accountant’s relationships shown in the research model.

The results also demonstrate that locus of control is related

to ethical climate fit. The control variable of fit trend is

very strong in the model. The highest path value in the

model is .60 for the path from fit trend to ethical fit. Fit

trend has a greater impact on job satisfaction than either

locus of control or ethical fit. Fit trend also has a stronger

impact on organizational commitment than does ethical fit.

Study results suggest that, since the fit trend is in the same

direction as that of the ethical climate, the ethical climate is

both shared by corporate accountants and is desirable as an

outcome of their fitting behavior. This may mean either

that the corporate accountant’s attitudes and beliefs

‘‘trend’’ toward the ethical climate, or that the ethical cli-

mate affects the fit trend. In either case, the results dem-

onstrate that accountant’s beliefs and attitudes toward their

clients are entwined with the organization’s ethical climate.

The research also suggests that ethical climate fit has a

significant, although moderate, impact on organizational

commitment (0.23 path value). This seems marginally better

than other accounting ethics research that finds a rather weak

relationship between an ethical construct and an outcome and

suggeststhatthe ethical climate construct may be more a more

promising choice for future research. Although the ethical

climate fit questions ask about congruence between the per-

son’s ethics and the organization’s ethics, it does not ascertain

the ethical level of either the person or the organization. For

instance, there could be a strong ethical climate fit if a cor-

porate accountant shares the values of an organization char-

acterizedbyclientnarcissismandlackofintegrity.Thus,there

seems to be an implicit assumption that higher ethical climate

fit is better,but thatwouldonlybetrueifhigherethical climate

fit was a fit between accountants with high ethics and orga-

nizations with high ethics. Additionally, this research dem-

onstrates that workplace interventions which target

accounting professional’s self-efficacy and locus of control

should be effective, because both LC and SE have significant

effects on perceptions of ethical climate.

Given the focus on understanding and assessing fraud

attitude risk and ethical behavior within the accounting

profession, these relationships may be of particular interest

to auditors.

Limitations

This study adopted an exploratory position in that

respondents were asked to report their own beliefs about

the organizational side of the fit construct, under the

assumption that any resulting actions taken or beliefs

Social Cognitive Theory 463

123

formed would be in accordance with their own beliefs

rather than the collective beliefs of their organization’s

management.

Astothe limitationsof the study,animportant consideration

is whether or not the sample will be generalizable to the pop-

ulation of accounting professionals at-large, since it is often

argued that the low-response rates that typify mass mailings

pose a threat to generalizability. Specifically that those who

respond to such invitations are not typical of the at-large pop-

ulation. This limitation is addressed by demonstrating that a

low-response sample group resembles a high-response sample

group, which supports not only the generalizability of the low-

response group, but also of the entire sample.

Although our theory that perceptions of a firm’s ethical

climate are indicative of narcissism and fraud attitude is

not tested, it is viewed as an opportunity for future

research. It is our plan to study this relationship in our next

paper.

It is hoped that the findings have not been influenced by

the recent spate of high-profile corporate ethical failures

that have swept the business world, such as Enron,

WorldCom and Arthur Anderson. If so, then the study may

be limited by its sensitivity to the recently heightened

ethical awareness in the business world. If, however, the

new corporate ethic proves to be a relatively durable

transformation of the corporate ethical climate, as opposed

to a momentary ‘‘blip’’ on an otherwise sordid ethical

continuum, then these findings may represent an early

assessment of an emerging awareness in corporate ethics,

and therefore of considerably higher value both to

researchers and practitioners.

Appendix: Instrumentation

Ethical Climate Fit

How well you currently ‘‘fit’’ with your current organiza-

tion with respect to the following organizational

conditions?

1. Freedom to follow one’s own personal and moral

beliefs.

2. Freedom to decide for oneself what is right and wrong.

3. Freedom to be guided by one’s own personal ethics.

4. Freedom to act in the best interests of everyone in the

organization.

Organizational Commitment

1. I am willing to put in a great deal of effort beyond that

normally expected in order to help this organization

be successful.

2. I talk up this organization to my friends as a great

organization to work for.

3. I feel very little loyalty to this organization.

4. I would accept almost any type of job assignment in

order to keep working for this organization.

5. I find that my values and this organization’s values

are very similar.

6. I am proud to tell others that I am a part of this

organization.

7. I could just as well be working for a different

organization as long as the type of work was similar.

8. This organization really inspires the best in me in the

way of job performance.

9. It would take very little change in my present

circumstances to cause me to leave this organization.

10. I am extremely glad that I chose this organization to

work for over others I was considering at the time I

joined.

11. There is not too much to be gained by sticking with

this organization indefinitely.

12. Often, I find it difficult to agree with this organiza-

tion’s policies on important matters relating to its

employees.

13. I really care about the fate of this organization.

14. For me, it is the best of all possible organizations for

which to work.

15. Deciding to work for this organization was a definite

mistake on my part.

Job Satisfaction

1. I am not very satisfied with my job.

2. My job is enjoyable.

3. I feel a sense of pride in doing my job.

4. I like doing the things I do at work.

5. I sometimes feel my job is meaningless.

Self-efficacy

1. I prefer my job assignments to be pretty difficult.

2. If I cannot do a job the first time, I keep trying until I

can.

3. When I set important goals for myself, I rarely

achieve them.

4. If something looks too complicated, I avoid it.

5. When trying to learn something new, I soon give up if

I am not initially successful.

6. If a new task seems especially difficult, I become

more determined to master it.

7. Initial failure just makes me try harder.

8. I feel confident about my ability to do things.

9. I am a self-reliant person.

464 M. A. Domino et al.

123

10. I am capable of dealing with most problems that come

up at work.

Locus of Control

1. A job is what you make of it.

2. On most jobs, people can pretty much accomplish

whatever they set out to accomplish.

3. If you know what you want out of a job, you can find a

job that gives it to you.

4. Making money is primarily a matter of good fortune.

5. In order to get a really good job, you need to have

family members or friends in high places.

6. Promotions are usually a matter of good fortune.

7. It takes a lot of luck to be an outstanding employee on

most jobs.

8. The main difference between people who make a lot of

money and people who make a little money is luck.

9. I try very hard to improve on my past performance at

work.

Fit trend

With respect to your overall fit with your organization, is

the goodness of fit between you and your organization

getting better or worse?

The control variables of number prior job changes and

the number of prior employer are introduced as an indicator

of fit trend

References

Agarwal, J., & Malloy, D. C. (1999). Ethical work climate decisions

in a not-for-profit organization: An empirical study. Journal of

Business Ethics, 20, 1–14.

Allen, N. J., & Meyer, J. P. (1990). The measurement and antecedents

of affective, continuance, and normative commitment to the

organization. Journal of Occupational Psychology, 63(1), 1–18.

Amernic, J. H., & Craig, R. J. (2010). Accounting as a facilitator of

extreme narcissism. Journal of Business Ethics, 96(1), 79–93.

Anderson, M. O. (2013). World Com’s Betty Vinson: A tale of two

professionals. Strategic Finance, 7, 48–52.

Anderson, R. E., & Tirrell, M. E. (2004). Too good to be true. CEOs

and financial reporting fraud. Consulting Psychology Journal,

56, 35–43.

Aranya, N., & Ferris, K. (1984). A Re examination of accountant’s

organizational- professional conflict. The Accounting Review,

59(1), 1–15.

Ashford, B. E., & Anand, V. (2003). The normalization of corruption

in organizations. Research in Organizational Behavior, 25,

1–52.

Bandura, A. (1986). Social foundations of thought and action: A

social cognitive theory. Englewood Cliffs, NJ: Prentice-Hall.

Baumhart, R. C. (1961). How ethical are businessmen? Harvard

Business Review, 39, 6–19.

Becker, H. S. (1960). Notes on the concept of commitment. American

Journal of Sociology, 66(1), 32–40.

Black, W. L. (2005). The best way to rob a bank is to own one: How

corporate executives and politicians looted the S & L industry.

Austin, TX: University of Texas Press.

Blair, C. A., Hoffman, B. J., & Helland, K. R. (2008). Narcissism in

organizations: A multisource appraisal reflects different per-

spectives. Human Performance, 21, 254–276.

Bonhoeffer, D. (1955). Ethics. London: SCM.

Brown, A. D. (1997). Narcissism, identity, and legitimacy. Academy

of Management Review, 22, 643–686.

Brown, R. P., Budzek, K., & Tamborski, M. (2009). On the meaning

and measure of narcissism. Personality and Social Psychology

Bulletin, 35(7), 951–964.

Brown, M. E., & Trevino, L. K. (2006). Ethical leadership: A review

and future directions. Leadership Quarterly, 17(6), 595–616.

Brownell, P. (1981). Participation in budgeting, locus of control and

organizational effectiveness. The Accounting Review, 56(4),

844–860.

Brownell, P. (1982). A field study examination of budgetary

participation and locus of control. The Accounting Review,

57(4), 766–777.

Brunell, A. B., Staats, S., Barden, J., & Hupp, J. M. (2011).

Narcissism and academic dishonesty: The exhibitionism dimen-

sion and the lack of guilt. Personality and Individual Differ-

ences, 50(3), 323–328.

Bullen, M., & Flamholtz, E. (1985). A theoretical empirical

investigation of job satisfaction and intended turnover in the

large CPA firm. Accounting, Organizations and Society, 10(3),

287–302.

Business Week (2002).The rise and fall of Dennis Kozlowski (24)

June, 34.

Campbell, K. W., Hoffman, B. J., Campbell, S. M., & Marchisio, G.

(2011). Narcissism in organizational contexts. Human Resource

Management Review, 2, 268–294.

Chatterjee, A., & Hambrick, D. C. (2007). It’s all about me:

Narcissistic chief executive officers and their effects on company

strategy and performance. Administrative Science Quarterly,

52(2), 350–386.

Cullen, J. B., Parboteeah, K. P., & Victor, B. (2003). The effects of

ethical climates on organizational commitment: A two-study

analysis. Journal of Business Ethics, 46(2), 127–141.

Davidson, B. J., & Stevens, D. E. (2013). Can a code of ethics

improve manager behavior and investor confidence? An exper-

imental study. The Accounting Review, 88(1), 51–74.

Deshpande, S. P., George, E., & Joseph, J. (2000). Ethical climates

and managerial success in Russian organizations. Journal of

Business Ethics, 23(2), 211–217.

Duchon D., & Drake, B. (2009). Organizational narcissism and

virtuous behavior. Journal of Business Ethics, 85, 301–308.

Falkenberg, L., & Herremans, I. (1995). Ethical behaviours in

organizations: Directed by the formal or informal systems?

Journal of Business Ethics, 14(2), 133–143.

Fatt, J. P. T. (1995). Ethics and the accountant. Journal of Business

Ethics, 14, 997–1004.

Festinger, L. (1957). Theory of cognitive dissonance. Stanford, CA:

Stanford University Press.

Foster, J. D., & Campbell, W. K. (2007). Are there such things as

‘‘narcissists’’ in social psychology? A taxometric analysis of the

narcissistic personality inventory. Personality and Individual

Difference, 43(6), 1321–1332.

Fritzsche, D. J. (2000). Ethical climates and the ethical dimension of

decision making. Journal of Business Ethic, 24(2), 125–140.

Social Cognitive Theory 465

123

Frucot, V., & Shearon, W. T. (1991). Budgetary participation, locus

of control, and Mexican managerial performance and job

satisfaction. The Accounting Review, 66(1), 80–99.

Gerstein, M., & Friedman, H. H. (2013). Is ethical accounting

becoming an oxymoron? The IUP Journal of Accounting

Research & Audit Practices, 12(2), 58–67.

Glover, H. D., Mynatt, P. G., & Schroeder, R. G. (2000). The

personality, job satisfaction and turnover intentions of African-

American male and female accountants: An examination of the

human capital and structural/class theories. Critical Perspectives

on Accounting, 11(2), 173–192.

Gregson, T. (1992). An investigation of the causal ordering of job

satisfaction, and organizational commitment in turnover models

in accounting. Behavioral Research in Accounting, 4, 80–95.

Hagel, J. (2012). Bridging the ethical divide: Survey finds firms

lagging. Journal of Accountancy, 7, 22–34.

Hales, J., Hobson, L., & Resutek, R. J. (2011). The dark side of

socially mediated rewards: How social status and narcissism

affect managerial reporting. Working Paper, Georgia Institute of

Technology.

Hartman, S. J., Yrle, A. C., & Galle, W. P. (1999). Procedural and

distributive justice: Examining equity in a university setting.

Journal of Business Ethics, 20, 337–351.

Herrbach, O., & Mignonac, K. (2007). Is ethical P-O fit really related

to individual outcomes? A study of management-level employ-

ees. Business and Society, 46(3), 304–330.

Hunton, J., Hoitash, R., & Thibodeau, J. (2011). The relationship

between perceptions of tone at the top and earnings quality.

Contemporary Accounting Research, 28(4), 1190–1224.

Huseman, R. C., Hatfield, J. D., & Miles, E. W. (1987). A new

perspective on equity theory: The equity sensitivity construct.

Academy of Management Review, 12(2), 222–234.

Hyatt, T., & Prawitt, D. (2001). Does congruence between audit

structure and auditor’s locus of control affect job performance?

The Accounting Review, 76(2), 263–274.

International Auditing and Assurance Standards Board (IAASB).

(2009). The auditor’s responsibilities relating to fraud in an

audit of financial statements, International Standards on Audit-

ing. New York, NY: IAASB.

Jaros, S. J., Jermier, J. M., Koehler, J. W., & Sincich, T. (1993).

Effects of continuance, affective, and moral commitment on the

withdrawal process: An evaluation of eight structural equation

models. Academy of Management Journal, 36(5), 951–995.

Jensen, L. C., & Wygant, S. A. (1990). The developmental self-

valuing theory: A practical approach for business ethics. The

Journal of Business Ethics, 9(3), 215–225.

Johnson, E. N., Kuhn, J. R., Apostolou, B. A., & Hassell, J. M.

(2013). Auditor perceptions of client narcissism as a fraud

attitude risk factor. Auditing: A Journal of Practice and Theory,

32(1), 203–209.

Kets de Vries, M. F., & Miller, M. (1985). Narcissism and leadership:

An object relations perspective. Human Relations, 38, 583–601.

Kohlberg, L. (1973). The claim to moral adequacy of a highest stage

of moral judgment. The Journal of Philosophy, 70(18), 630–646.

Leong, L., Huann, S., & Hsu, J. (2003). An empirical study on

professional commitment, organizational commitment and job

involvement in Canadian accounting firms. Journal of the

American Academy of Business, 2(2), 360–370.

Lewin, K. Z. (1936). Principals of topological psychology. New

York: McGraw-Hill.

Locke, D. (1979). Cognitive stages of developmental phases: A

critique of Kohlberg’s stage-structural theory of moral reason-

ing. Journal of Moral Education, 9(3), 168.

Locke, D. (1980). The illusion of the sixth stage. Journal of Moral

Education, 9(2), 103.

Loeb, S. E. (1971). A survey of ethical behavior in the accounting

profession. Journal of Accounting Research, Autumn, 9(2),

287–306.

Lubit, R. (2002). The long-term organizational impact of destruc- tively narcissistic managers. The Academy of Management

Review, 16(1), 127–138.

Maccoby, M. (2003). The productive narcissist: The promise and

peril of visionary leadership. New York: Broadway Books.

Malloy, D. C., & Agarwal, J. (2000). Ethical climate in nonprofit

organizations: Propositions and implications. Non Profit Man-

agement and Leadership, 12(1), 39–54.

Menon, M. K., & Sharland, A. (2011). Narcissism, exploitive

attitudes, and academic dishonesty: An exploratory investigation

of reality versus myth. Journal of Education for Business, 86,

50–55.

Meyer, J. P., & Allen, N. J. (1991). A three-component conceptu-

alization of organizational commitment. Human Resource Man-

agement Review, 1(1), 61–89.

Meyer, J. P., Allen, N. J., & Smith, C. (1993). Commitment to

organizations and occupations: Extension of a test of a three-

component conceptualization. Journal of Applied Psychology,

78(4), 538–551.

Mobley, W. H., Griffeth, R. W., Hand, H. H., & Meglino, B. M.

(1979). Review and conceptual analysis of the employee

turnover process. Psychological Bulletin, 86(3), 493–522.

Morf, C. C., & Rhodewalt, F. (2001). Unraveling the paradoxes of

narcissism: A dynamic self-regulatory processing model. Psy-

chological Inquiry, 12(4), 177–196.

Mowday, R. T., Steers, R. M., & Porter, L. W. (1979). The

measurement of organizational commitment. Journal of Voca-

tional Behavior, 14(2), 224–247.

Mumford, M. D., & Helton, W. B. (2000). Organizational influences

on scientific integrity. Paper presented at the ORI conference on

research on research integrity, November, Bethesda, MD.

Myer, J. (1931). Teaching the accountant the history and ethics of his

profession. Accounting Review, 6(1), 44–47.

New York Daily News (2009). at: www.nydailynews.com/money/

2009/06/30/2009-06- 30_they_too_paid_for_fast_living.html.

New York Times (2007). at: www.nytimes.com/2007/01/04/business/

04enron.html.

New York Times (2009). at: topics.nytimes.com/top/reference/time-

stopics/people/m/bernard_l_madoff/index.html?scp=1&sq=Ber-

nard%

20Madoff%20sentenced&st=cse.

Norris, D. R., & Niebuhr, R. E. (1984). Professionalism, organizational

commitment and job satisfaction in an accounting organization.

Accounting, Organizations and Society, 9(1), 49–59.

Nunnally, J. C., & Bernstein, I. H. (1994). Psychometric theory (3rd

ed.). New York, NY: McGraw-Hill Inc.

Olsen, K. J., Dworkis, K. K., & Young, M. (2013). CEO narcissism

and accounting: A picture of profits. Journal of Management

Accounting Research, 23(2), forthcoming.

Paulhus, D. L., & Williams, K. M. (2002). The dark triad of

personality: Narcissism, Machiavellianism, and psychopathy.

Journal of Research in Personality, 36, 556–563.

Peloubet, M. E. (1955). Professional ethics and the student.

Accounting Review, 9(2), 164–167.

Peterson, D. K. (2002). Deviant workplace behavior and the

organization’s ethical climate. Journal of Business and Psychol-

ogy, 17(1), 47–61.

Ponemon, L. A., & Gabhart, D. L. (1990). Auditor independence

judgments: A cognitive-developmental model and experimental

evidence. Contemporary Accounting Research, 7(1), 227–251.

Poznanski, P., & Bline, J. (1997). Using structural equation modeling

to investigate the causal ordering of job satisfaction and

466 M. A. Domino et al.

123

organizational commitment among staff accountants. Behavioral

Research in Accounting, 9, 154–171.

Quarles, R. (1994). An examination of promotion opportunities and

evaluation criteria as mechanisms for affecting internal auditor

commitment, job satisfaction and turnover intentions. Journal of

Managerial Issues, 6(2), 176–194.

Rijsenbilt, J. A. (2011). CEO narcissism and measurement. Doctoral

thesis, Erasmus University, Rotterdam.

Rijsenbilt, A., & Commandeur, H. (2013). Narcissus enters the

courtroom: CEO narcissism and fraud. Journal of Business

Ethics, 117, 413–429.

Roepke, R., Agarwal, R., & Ferratt, T. W. (2000). Aligning the IT

human resource with business vision: The leadership initiative at

3 M. MIS Quarterly, 24(2), 327–353.

Rotter, J. B. (1954). Social learning and clinical psychology. NY:

Prentice-Hall.

Salter, M. (2008). Innovation corrupted: The origins and legacy of

Enron’s collapse. Boston, MA: Harvard Business School Press.

Schlachter, P. J. (1990). Organizational influences on individual

ethical behavior in public accounting. Journal of Business

Ethics, 9, 839–853.

Schlenker, B. R. (2008). Integrity and character: Implications of

principled and expedient ethical ideologies. Journal of Social

and Clinical Psychology, 27(10), 1078–1125.

Schneider, B. (1975). Organizational climates: An essay. Personnel

Psychology, 28(4), 447–479.

Schumacker, R. E., & Lomax, R. G. (2010). The beginners guide to

structural equation modeling (3rd ed.). New York: Routledge.

Schwartz, H. S. (1991). Narcissism project and corporate decay: The

case of general motors. Business Ethics Quarterly, 1, 249–268.

Shafer, W. E. (2002). Ethical pressure, organizational-professional

conflict and related work outcomes among management accoun-

tants. Journal of Business Ethics, 38(3), 263–275.

Shafer, W. E. (2009). Ethical climate, organizational-professional

conflict and organizational commitment: A study of Chinese

auditors. Accounting, Auditing and Accountability Journal,

22(7), 1087–1110.

Sherer, M., & Adams, C. (1983). The self-efficacy scale: A construct

validity study. Psychological Reports, 66, 987–994.

Shin, Y. (2012). CEO ethical leadership, ethical climate, climate

strength, and collective organizational citizenship behavior.

Journal of Business Ethics, 108, 299–312.

Sims, R. L., & Keon, T. L. (1997). Ethical work climate as a factor in

the development of person-organization fit. Journal of Business

Ethics, 16(11), 1095–1105.

Sims, R. L., & Kroeck, K. G. (1994). The influence of ethical fit on

employee satisfaction, commitment and turnover. Journal of

Business Ethics, 13(12), 939–947.

Spalding, A. J., & Oddo, A. (2011). It’s time for principles-based

accounting ethics. Journal of Business Ethics, 99, 49–89.

Spector, P. E. (1988). Development of the work locus of control scale.

Journal of Occupational Psychology, 61(4), 335–340.

Spector, P. E. (1994). Job satisfaction survey. University of South

Florida, Department of Psychology.

Stead, W. E., Worrell, D. L., & Stead, J. G. (1990). An integrative

model for understanding and managing ethical behavior in

business organizations. Journal of Business Ethics, 9(3),

233–242.

Steers, R. M. (1977). Antecedents and outcomes of organizational

commitment. Administrative Science Quarterly, 22(1), 46–56.

Trevino, L. K. (1986). Ethical decision making in organizations: A

person-situation interactionist model. Academy of Management

Review, 11(3), 601–617.

Trevino, L. K., Butterfield, K. D., & McCabe, D. I. (1998). The

ethical context in organizations: Influences on employee atti-

tudes and behaviors. Business Ethics Quarterly, 8(3), 447–476.

Troy, C., Smith, K., & Domino, M. A. (2011). CEO demographics

and accounting fraud: Who is more likely to rationalize illegal

acts? Strategic Organization, 9(4), 259–282.

Tsui, J., & Ferdinad, G. (1996). Auditor’s behavior in an audit conflict

situation: A research note on the role of locus of control and

ethical reasoning. Accounting, Organizations and Society, 21(1),

41–51.

Valentine, S., Greller, M. M., & Richtermyer, S. B. (2006). Employee

job response as a function of ethical context and perceived

organizational support. Journal of Business Research, 59(5),

582–588.

Verbeke, W., Ouwerkek, C., & Peelen, E. (1996). Exploring the

contextual and individual factors of ethical decision making of

salespeople. Journal of Business Ethics, 15, 1175–1187.

Victor, B., & Cullen, J. B. (1988). The organizational bases of ethical

work climates. Administrative Science Quarterly, 33(1),

101–125.

Wall Street Journal (2007). at blogs.wsj.com/law/2007/08/07 in-

advance-of- prison-john- rigs-speaks-out/.

Winbush, J. C., & Shepard, J. M. (1994). Toward an understanding of

ethical climate: Its relationship to ethical behavior and supervi-

sory influence. Journal of Business Ethics, 13, 637–647.

Winter, S. G. (1928). The next decade of accounting. Accounting

Review, 3(3), 311–312.

Wood, R., & Bandura, A. (1989). Social cognitive theory of

organizational management. The Academy of Management

Review, 14(3), 361–384.

Zahra, S. A., Priem, R. L., & Rasheed, A. A. (2005). The antecedents

and consequences of top management fraud. Journal of

Management, 31, 803–828.

Zahra, S. A., Priem, R. L., & Rasheed, A. A. (2007). Understanding

the causes and effects of top management fraud. Organizational

Dynamics, 36(2), 122–139.

Social Cognitive Theory 467

123

Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.