The Effects of Professional Role, Decision Context, and Gender On The Ethic...

BEHAVIORAL RESEARCH IN ACCOUNTING American Accounting Association
Vol. 27, No. 1 DOI: 10.2308/bria-

51090
2015
pp. 55–78
The Effects of Professional Role, Decision

Context, and Gender on the Ethical Decision
Making of Public Accounting Professionals
Donna D. Bobek
University of South Carolina
Amy M. Hageman
Kansas State University
Robin R. Radtke
Clemson University
ABSTRACT: This study investigates the degree to which professional role (auditor or
tax professional), decision context (an audit or tax environment), and gender influence
the ethical decision making of public accounting professionals. The primary analysis,
including all 134 accounting professionals who participated in our experiment, indicates
that these participants are both less likely to indicate they would concede to a client in
a contentious situation and less likely to recommend conceding when they are in an
audit as opposed to tax context. Furthermore, work experience in auditing (as opposed
to tax) is associated with a decreased likelihood of conceding to the client in both
contexts. However, when data for males and females are analyzed separately,
professional role, context, and moral intensity are significantly related to males’
decision making, but are not significant with respect to females’ decisions. This
suggests that males and females may use different decision-making processes.
Possible theoretical explanations for these findings are discussed.
Keywords: ethical decision making; auditors; tax professionals; gender; context;
professional role.
INTRODUCTION
T
he purpose of this study is to investigate how professional role (auditor or tax
professional), decision context (an audit or tax issue), and gender influence public
accounting professionals’ ethical decision making. Pinsker, Pennington, and Schafer
(2009)
We appreciate the helpful feedback provided by participants at the 3rd (2011) and 4th (2012) Annual Behavioral Tax
Symposiums, the 2012 AAA Public Interest Midyear Meeting, particularly Steven Mintz (discussant), the 2012 AAA
Annual Meeting, particularly Charlie Bailey (discussant), workshop participants at Wake Forest University, Mary B.
Curtis (associate editor), and two anonymous reviewers, as well as the helpful comments on developing the instrument
from Vicky Arnold, Dann Fisher, Julia Higgs, Brian Hogan, Erin Nickell, Jillian Phillips, Rob Pinsker, Greg Trompeter,
and Joe Ugrin.
Mary B. Curtis, Associate Editor.
Published Online: March 2015
55
56 Bobek, Hageman, and Radtke
demonstrate that accounting professionals’ roles influence their attitudes and judgments in
performing an auditing or tax task. This study extends Pinsker et al. (2009) by considering how
professional role, as well as being placed in an auditing or tax decision context, and gender
influence the ethical decision-making process.
Understanding the factors that influence ethical decision making across a variety of
professional contexts is important for several reasons. First, U.S. auditors are bound by
professional standards to function as independent, objective evaluators of evidence, and to operate
as professional skeptics (e.g., AU 230.07, PCAOB 2006). In the past decade, auditors have
been under increasing attack for abandoning their professional skepticism charge, as evidenced
by the Enron scandal and resulting collapse of Arthur Andersen, the passage of the Sarbanes-
Oxley Act, and the creation of the PCAOB.1 Conversely, unlike auditors, tax professionals, while
also having an obligation to the tax system, face a unique professional position of being required
to advocate for their clients (AICPA 2009)— similar to the role of an attorney. Due to this
advocacy role, tax professionals are placed in a sometimes difficult position of determining the
boundaries between acting as advocates for their client and crossing the line into supporting
unethical positions (Bobek, Hageman, and Hatfield 2010a). Furthermore, U.S. tax professionals
have faced increasing oversight and stiffened penalties in response to the marketing of tax shelters
by CPA firms and the provision of overly aggressive tax advice (Lipton, Walton, and Dixon
2005). Thus, while auditors and tax professionals face different environmental constraints, they
have
both been under increased scrutiny in recent years due to lapses in professional judgment.
Partially in response to the events of the past decade, there has been an increased emphasis by
both researchers (e.g., Smith 2003; Zeff 2003; Bobek and Radtke 2007; Martinov-Bennie and
Pflugrath 2009; Sweeney, Arnold, and Pierce 2010; Convery and Outslay 2012) and the public
accounting profession2 on improving the ethical decision making of professional accountants.
However, few accounting studies have considered how ethical decision making may differ
between contexts, even though previous studies suggest that the context faced by a decision maker
can affect the decision outcome (e.g., Haynes and Kachelmeier 1998; Haynes 2002).
Understanding whether tax professionals and auditors react differently in varying contexts is
important for several reasons. First, tax professionals in the U.S. have become increasingly
involved in audits with respect to clients’ tax provisions and the requirements of FASB ASC 740
(i.e., FIN No. 48, Rose 2010), particularly because income taxes are one of the most frequent
causes of the Securities and Exchange Commission’s (SEC) Comment Letters sent by the SEC to
its registrants (Deloitte 2014). Tax professionals within CPA firms often assist in preparing the
audit workpapers for a corporate client’s tax accrual; such workpapers are integral in determining
the information disclosed in the audited financial statements. Therefore, determining whether
individuals with either a tax or auditing background react differently when placed in an auditing
context is an important issue. Additionally, in smaller CPA firms, accounting professionals are
much more likely to practice in both auditing and tax (Roberts 2010). Rather than specializing by
functional area, accounting professionals in smaller firms are more likely to handle all of the
accounting issues that arise with particular clients (see Satava 2005), indicating that the
boundaries between working as an auditor and a tax professional are often blurred in smaller
CPA firms.
In addition to professional role and context, the effect of gender on accountants’ ethical
decision making is also investigated. Recent studies suggest gender may impact auditors’
judgments (Gold, Hunton, and Gomma 2009), as well as accruals quality (Ittonen, E. Vahamaa,
and
1
Rampant use of the term ‘‘client’’ in lieu of ‘‘auditee’’ only serves to weaken independence and the public interest
Behavioral Research In Accounting

Volume 27, Number 1, 2015
Professional Role, Context, Gender, and Ethical Decision Making 57
focus of auditors (Glascock 2002).
2
For example, many state boards of accountancy have added an ethics course to their continuing education
requirements, and the major accounting firms have all incorporated ethics into their training programs (see
Convery and Outslay 2012).

S. Vahamaa 2013). Previous research also shows that males may have a reduced tendency to
follow rules and regulations in financial and tax decisions (Baldry 1987; Barnett, Bass, and Brown
1994; Bernardi and Arnold 1997; Fallan 1999; Pierce and Sweeney 2010).
This study investigates the effects of professional role, decision context, and gender in ethical
decision making using an experiment with 134 public accounting professionals with a mixture of
auditing and tax backgrounds as participants. In this experiment, participants respond to a
hypothetical scenario that includes a contentious client conflict for which they are asked to
recommend whether to concede to the client’s wishes, and to indicate their own behavioral
intentions. The decision context (an audit or tax environment) is manipulated to explore individual
attributes in contexts with different types of professional responsibility.
This study makes several contributions to the body of accounting literature with respect to
ethical decision making. First, the results of this study are the first to show that male accountants
make different decisions when they encounter ethical dilemmas in an audit versus tax context.
Further analysis demonstrates that these differences may partially be due to differences in the
perceived moral intensity of the two contexts. In addition, the findings indicate that whether male
participants’ primary work experiences have been in audit versus tax influenced their decisions.
These results extend the findings of Pinsker et al. (2009), who demonstrate that advocacy attitudes
differ based on the professional role (audit or tax). These differences have implications for
training efforts at CPA firms, indicating that ethics training should recognize the importance of
the audit versus tax context, as well as accounting professionals’ experiences in their primary role.
This is particularly important for professionals who have responsibilities in more than one
context.
Furthermore, this study identifies important and interesting differences between how males
and females make ethical judgments. Despite the relative homogeneity of the participants with
regard to almost every study variable, the process by which males and females arrived at their
ethical judgments appears to be different. In fact, when males and females are analyzed
separately, the results show that the model’s statistical significance increases substantially for the
males-only analyses. On the other hand, context, role, and moral intensity are not significantly
related to females’ ethical decision making. These findings are quite interesting given that the
influence of gender is tested in a setting where it would be unlikely to find gender differences, due
to the fact that females and males both have the same professional role and have undergone the
same professional training. We discuss possible theoretical reasons for these differences and echo
the call for additional gender research in accounting (e.g., Hopwood 1987; Kornberger, Carter,
and Ross- Smith 2010). This finding also has practical implications for accounting firms by
emphasizing that not all ethical decision-makers process situations in the same manner; this
should be taken into consideration when designing firms’ training processes (see, also, Herington
and Weaven 2008).
The remainder of the paper is organized as follows. The next section presents prior research
and hypotheses development. This is followed by the study’s research method and the results. The
final section concludes.
THEORY, PRIOR RESEARCH, AND HYPOTHESES DEVELOPMENT

Ethics and Accounting Professionals
A seminal model of ethical decision making is Rest’s (1986) Four-Component Model. This
model assumes that moral functioning is a cognitive process that involves four components: moral
sensitivity, moral judgment, moral motivation, and moral character. Most prior accounting ethics
research is grounded in the second component, moral judgment, and generally investigates either
auditors or tax professionals’ ethical decision making in isolation from each other (see Bailey,
Scott, and Thoma [2010] for a review).
Prior research on the ethical decision making of auditors identifies a number of different
individual characteristics that may influence auditors’ ethical reasoning processes such as
character (Thorne 1998; Trevin˜o 1986), locus of control (Tsui and Gul 1996), ethical
orientation (Shaub, Finn, and Munter 1993), utilitarianism, justice, and obligations (Cohen, Pant,
and Sharp 1995a, 1995b, 1996, 2001), mood (Cianci and Bierstaker 2009), and firm size (Pierce
and Sweeney 2010). Several other studies examine the effect of the ethical environment (the
shared perceptions of what is considered ethical in an organization) on auditors’ judgments
(Douglas, Davidson, and Schwartz 2001; Pflugrath, Martinov-Bennie, and Chen 2007; Martinov-
Bennie and Pflugrath 2009; Sweeney et al. 2010), with the ethical environment often
demonstrating an indirect influence on auditors’ ethical decision making.
Meanwhile, prior research on the ethical decision making of tax professionals identifies
factors such as deontological and teleological considerations (Burns and Kiecker 1995), ethical
sensitivity (Yetmar and Eastman 2000), and moral equity and contractualism (Cruz, Shafer, and
Strawser 2000) as important individual factors that can influence the ethical judgments of tax
professionals. Other research shows that the ethical environment also plays a significant role for
tax professionals (e.g., Marshall, Armstrong, and Smith 1998; Bobek and Radtke 2007; Bobek,
Hageman, and Radtke 2010b). Thus, research shows that tax professionals’—like auditors’—
ethical decision making is influenced by both individual and contextual elements. However, the
examination of auditors’ and tax professionals’ ethical decision making in isolation leaves open
questions on how the auditing or tax context and professional role may affect the ethical
decision-making process.
Professional Role
Accounting professionals have decidedly different roles with regard to their relationship with
the client when providing auditing versus tax services. Auditors are required to be independent
from their clients, while tax professionals are required to be advocates for their clients (AICPA
2009). For example, the AICPA’s Code of Professional Conduct and Bylaws states that ‘‘a
member who provides auditing and other attestation services should be independent in fact and
appearance’’ (AICPA 2011, Section 55, Article IV); this independence requirement is not present
for tax professionals. In contrast, the AICPA’s Statements on Standards for Tax Services
specifically states, ‘‘when recommending a tax return position, a member has both the right and
responsibility to be an advocate for the taxpayer’’ (AICPA 2009, Statement No. 1, 10). A. Ashton
and R. Ashton (1990) find auditors respond differently when compared to business executives in a
nonaudit task and suggest this may be due to the heightened importance of professional
skepticism and litigation risk in their role as auditors. In the tax realm, Cloyd and Spilker (1999)
find that tax professionals’ information search strategies are biased toward client preferences and
Pei, Reckers, and Wyndelts (1992) find this bias toward client preferences extends to judgments
for inexperienced tax professionals. Given this difference in focus for auditors and tax
professionals (independence versus advocacy), when facing an ethical dilemma, role morality
may play a part in decision making.
Role morality is the view that ‘‘individuals may adopt a different morality depending on the
roles they undertake’’ (Gibson 2003, 18). Gibson (1999) asserts that a profession’s code of
conduct (such as the AICPA Code of Professional Conduct and Bylaws cited above) helps to
delineate expected behavior in the distinct roles encompassed by said profession. In instances of
role morality, accountants may know they should do more than what is required by the code, but
they may feel ‘‘that professional obligations are satisfied by following the letter rather than the
spirit of the code’’ (Gibson 1999, 90). Radtke (2008, 281–282) cites ‘‘allowing a questionable
audit adjustment or tax treatment that has a material impact on the financial statements or the
amount of taxes owed, due to pressure from the client’’ as potential examples of an effect on
decision making due to accountants’ role morality. Additionally, Radtke (2005) finds that
accountants’ responses to
matched pairs of ethically sensitive situations of a personal and business nature are consistent with
the theory of role morality; business responses are less ethical than personal responses.
Thus, based on prior research and the theory of role morality, we expect that work experience
in the different roles of tax professionals (client advocate) and auditors (independent evaluators)
will lead to differences in ethical decision making. Specifically due to their role as independent
evaluators, we predict that auditors will be less likely than tax professionals both to recommend
conceding to the client (recommendation) and to indicate that they would concede to the client
themselves (behavioral intentions) when faced with an ethical dilemma, irrespective of the
decision context.3
H1a: Auditors will be less likely to recommend conceding to the client than tax professionals.
H1b: Auditors will be less likely to indicate they would concede to the client themselves than
tax professionals.
Decision Context
Within a public accounting firm environment, one of the most important contextual
differences that could affect decision making rests with whether the decision is being made in an
audit or a tax decision context. Previous research has shown that the context4 of a decision can
directly affect the decision outcome (Haynes and Kachelmeier 1998; Haynes 2002). In the tax
area, Roberts (1998) suggests that tax accountants are stronger advocates in a compliance setting
than in a planning context (where research is more balanced since tax professionals still have the
opportunity to help structure the transaction). Magro (1999) finds confirmatory results in an
experiment with experienced tax professionals, as managers provided more time for tax research
in planning compared to compliance contexts. In auditing, Soloman, Ariyo, and Tomassini (1985)
show that the calibration of probabilistic judgments is affected by context. Additionally, Guess,
Louwers, and Strawser (2000) find that the decision context (as characterized by inherent and
control risk) significantly affects auditors’ determination of the extent of substantive testing
required.
Two recent studies, while not examining an ethical situation, examine how accounting
professionals react to client preferences in an audit and tax context. Roberts (2010) investigates
how accounting professionals with experience in both audit and tax engagements make
accounting decisions (i.e., whether to expense or capitalize a purchase) across audit and tax
decision contexts where the course of action is ambiguous. The findings show that accounting
professionals make client-supportive decisions in both audit and tax contexts when there is an
explicit client preference, despite the differences in professional standards for these contexts.
However, the participants in Roberts’s (2010) study are specifically selected as those who
practiced in both auditing and taxation according to their AICPA membership, and 75 percent of
participants in Roberts’s (2010) study are sole proprietors or from local firms. Both of these
attributes could have influenced these results.
Pinsker et al. (2009) investigate how advocacy attitudes are influenced by the audit or tax
decision context, and how context interacts with advocacy attitudes to jointly influence judgments
in an auditing or tax task. Participants include a mixture of experienced auditors and tax
professionals, and master’s of accountancy students specializing in audit or tax. Their findings
show
3
Two dependent variables, RECOMMENDATION (H1a) and BEHAVIORAL INTENTION (H1b), are
hypothesized to capture various components of the ethical decision-making process. Specifically, accounting
professionals’ recommendations represent ‘‘an accountant’s formulation of his or her professional judgment of
the ideal resolution to an ethical dilemma,’’ whereas behavioral intentions refer to ‘‘intention to exercise
professional judgment’’ (Thorne 2000, 141).
4
Haynes (2002, 473) defines context as ‘‘the setting and terminology used to express a task.’’ Based on this
definition, auditing and tax contexts are likely to vary considerably.
that advocacy attitudes are stronger among those in a tax role and have a stronger influence on the
judgment task in the tax decision context. Given the body of prior research on the effect of
decision context, we predict the following set of hypotheses regarding decision context:5
H2a: Accounting professionals will be less likely to recommend conceding to the client when
in an audit context than when in a tax context.
H2b: Accounting professionals will be less likely to indicate they would concede to the client
themselves when in an audit context than when in a tax context.
Gender
Prior ethical decision-making studies indicate that both auditors and tax professionals are
influenced by individual characteristics. One potentially important individual characteristic is
gender. Previous business research shows that males may have a lower tendency than females to
follow rules and regulations in financial and tax decisions (Baldry 1987; Barnett et al. 1994;
Bernardi and Arnold 1997; Fallan 1999; Pierce and Sweeney 2010). Beyond ethically sensitive
situations, other studies of both auditors and tax professionals provide interesting results with
respect to gender. O’Donnell and Johnson (2001) find that in a low client risk context, male
auditors exert less effort in an analytical procedure-processing task than female auditors, while
Chung and Monroe (2001) show that male auditors perform worse than female auditors in an
inventory valuation task due to less comprehensive information processing. Conversely, Gold et
al. (2009) find that female auditors are less accurate than male auditors on an adjusting journal
entry task and are also differentially influenced by the gender of the client. Bobek et al. (2010a)
demonstrate that female tax professionals are less likely both to recommend and to allow a client-
favorable tax position in an ambiguous scenario as compared to male tax professionals. In
addition, the male tax professionals in their study have higher levels of general client advocacy
attitudes than do the female tax professionals.
Bobek and Hatfield (2004) find that while females are no less likely than males to give
aggressive tax advice, they charge much lower fees for the same work. Alternatively, Ittonen and
Peni (2012) show that higher audit fees are charged by firms with female audit engagement
partners and suggest that auditor gender may influence audit effort. Further, Ittonen et al. (2013)
find smaller abnormal accruals for firms with female audit engagement partners and suggest that
female auditors may curtail earnings management efforts. Similarly, Francis, Hasan, Wu, and
Yen (2014) find an association between CFO gender and tax aggressiveness. Firms are less tax
aggressive when their CFOs are female. Thus, we explore whether these gender effects, which
have been identified with respect to auditors and tax professionals’ decision making, also extend
to ethical decision making. While Gilligan (1982) argues that females’ moral judgment tends
to focus more on a care orientation than does males’ judgment, prior research finds only small
differences between males and females with respect to a number of different components of
ethical decision making. For example, in a recent meta-analysis, You, Madea, and Bebeau (2011,
274; emphasis added) identify ‘‘small to moderate gender differences in moral sensitivity scores
that favors female[s].’’ Walker (2006) concludes that gender explains only a negligible amount of
the variance in moral reasoning development. Likewise, studies measuring ethical orientation find
modest differences between males and females with respect to idealism and relativism (see
Marques and Azevedo-Pereira [2009] for a review), with the more common finding that females
are slightly more idealistic than
5
While not hypothesized, in supplemental analysis, perceptions of the moral intensity (Jones 1991) of the two
contexts are considered.
males. Further, Radtke (2000) finds few differences in how males and females respond to
ethically sensitive situations.
However, based on the social intuitionist work of Haidt (2001, 2012), Reynolds (2006) argues
that the differences between a conscious (i.e., rationalist or cognitive) and automatic (i.e.,
intuitionist) decision maker are particularly salient for understanding gender differences in ethical
decision making, with females more likely than males to follow the social intuitionist approach.
According to Reynolds (2006, 744):
Gender is one of the most widely researched variables in ethical decision making, and yet
the findings to date have been at best difficult to interpret . . . Together, all of this
evidence indicates that there is a neurophysiological basis for the layman’s notion of
women’s intuition. As more intuitive decision makers, women are more apt to recognize
more subtle cues of the prototypes of situations involving ethics and are more skilled at
reflexively or intuitively acting on those prototypes in an ethically acceptable manner.
Thus, social intuitionist theory suggests that gender plays a role in the decision-making
process, if not the ultimate outcome. While Bailey et al. (2010, 4) assert that the dilemmas used to
support the intuitive model are ‘‘far removed from those that professional accountants encounter’’
and argue that the cognitive approach is more reflective of the ethical judgments that are
encountered in a professional domain, Reynolds, Leavitt, and DeCelles (2010) report empirical
results to refute this claim. They conduct an experiment in a business context and find evidence
that ‘‘implicit assumptions about morality help explain variance in moral behavior’’ (Reynolds et
al. 2010, 757) and suggest that employees may be reflexive interactionists whereby their
‘‘automatic decision-making processes interact with the environment to shape their moral
behavior’’ (Reynolds et al. 2010, 752). Although male and female accountants have the same
professional role and have experienced the same professional training, based on these prior
studies, we predict that:
H3: Male and female accounting professionals will use different decision-making processes
when faced with an ethical dilemma.
RESEARCH METHOD
Participants
Participants are from seven different public accounting firm offices in two different U.S.
states. Five of the offices represent international accounting firms, while two are local firms.6 In
total, these offices provided us with contact emails for 245 accounting professionals; 134 of these
professionals successfully completed the study, for an overall response rate of 54.7 percent. 7 As
an incentive for participating, a contribution of $10 for each completed response was made to an
accounting student scholarship fund.
6
Eleven different offices were initially contacted. Seven of these offices (representing six different accounting
firms) agreed to provide participants. Several of the five international offices are from Big 4 firms. There are no
differences in any of the responses between Big 4 and other international firms; thus, to preserve anonymity, all
five of these offices are referred to as ‘‘international.’’
7
The number of participants who replied from the seven offices ranged from 12 to 25, with response rates ranging
from 36 percent to 68 percent. A total of 154 responses were received; three of the 154 failed the manipulation
check question with regard to whether they were in the audit or tax condition. Further, participants who could not
be characterized as primarily auditors or tax professionals (nine participants), did not report their gender (two
participants), and/or had one or more missing items (five participants) were excluded. Thus, the analyses include
134 participants. To maximize the use of public accounting participants, the experimental instrument collected
data for several research studies; thus, it was quite lengthy (over 100 items long), which likely contributed to the
number of participants who did not fully complete the instrument.
TABLE 1
Demographic Information
Tax
Full Sample Auditors Professionals Males Females
(n ¼ 134) (n ¼ 87) (n ¼ 47) (n ¼ 76) (n ¼ 58)
Age 32.3 31.2 34.5 33.0 31.5
(9.9)a (8.7) (11.7) (10.5) (9.2)
Experience
Total 8.2 7.4 9.7 9.1 7.1
(8.8) (7.8) (10.4) (9.9) (7.1)
Current Firm 6.6 6.1 7.5 7.0 6.1
(7.8) (7.0) (9.1) (8.6) (6.5)
Gender
Female 43% 40% 49% NA 100%
Male 57% 60% 51% 100% NA
Audit/Taxb
Percentage of Time Audit 65% 93% 12% 67% 62%
Percentage of Time Tax 33% 3% 88% 31% 36%
Firm Size
International 75% 82% 62% 76% 72%
Local 25% 18% 38% 24% 28%
Position in Firm
Leaderc 16% 14% 19% 16% 16%
Senior Manager 7% 9% 4% 9% 5%
Manager 22% 21% 24% 25% 17%
Senior 31% 35% 21% 32% 29%
Staff 24% 21% 32% 18% 33%
a
Mean (standard deviation) in years.
b
Does not add to 100 percent because some participants also report consulting engagements.
c
Leaders include partners, principals, and directors.
Table 1 reports demographic information for the sample, as well as for auditors (n ¼ 87) and
tax professionals (n ¼ 47) separately, and males (n ¼ 76) and females (n ¼ 58) separately. The
majority of these participants are male (57 percent) and work at an international CPA firm (75
percent). The average age of participants is 32 years with an average of 8.2 years of public
accounting experience. Sixteen percent of the participants are in leadership positions (i.e., partner,
principal, or director) and 55 percent of participants are at the senior level or below. Eighty-five
percent either possess an active CPA license or have passed the exam and are awaiting
certification (untabulated).8
8
In untabulated analyses, firm effects were investigated with respect to the dependent and independent variables. There
are not any individual firm effects; however, a few systematic differences exist between participants from international
accounting firms as compared to participants from local firms. Specifically, participants from international firms are
slightly younger, more likely to work in audit, and less likely to recommend conceding or intending to concede to the
client. Thus, the analyses include an indicator variable that is equal to 0 (1) if the participant is from a local
(international) firm to control for these differences.
Experimental Task and Procedures
The hypotheses are tested using an experimental instrument administered in an online
environment. The decision context (audit or tax) is manipulated in the experimental design. 9
Participants are randomly assigned to a condition, and following Pinsker et al. (2009), the
decision context (audit or tax) is not necessarily congruent with the professional role of the
participant. For those assigned to the audit condition, 67 percent of participants’ work
experiences consist of audit engagements, while for those assigned to the tax condition, 62
percent of participants’ work experiences consist of audit engagements. Thus, a random
assignment of audit and tax participants is achieved, as there is no statistically significant
difference in audit or tax work experiences between conditions ( p ¼ 0.479; all reported p-values
are two-tailed, unless specified otherwise).
The audit and tax conditions, adapted from Thorne (2000), include an actor (a CPA firm
partner, Sam) who is facing pressure from a client to concede on an issue that he believes is
incorrect.10 The audit and tax conditions are kept as similar as possible in that both involve
uncertainty due to changing economic conditions, an expense estimate that requires professional
judgment, and disagreement between the client (Oxford Manufacturing) and the CPA firm
partner (Sam). In both the audit and tax conditions, Oxford Manufacturing, a privately held
corporation, is one of the CPA firm’s largest clients. The dispute between Sam and Oxford
Manufacturing concerns (1) the client’s use of an expert who is not independent to determine the
value of the expense, which Sam believes is incorrect; (2) Sam has conducted additional
procedures and research and remains convinced about his conclusions that the amount of the
expense asserted by the client is incorrect; and (3) the client is motivated by cash-flow needs in
both conditions. However, due to the inherent differences between financial reporting incentives
(i.e., maximize financial accounting net income) and tax accounting incentives (i.e., minimize
taxable income), the type of expense estimates are different. Specifically, in the audit context
manipulation, the actor is being pressured by the audit client to agree to an estimate that he thinks
is understated. In the tax context manipulation, the actor is being pressured by the tax client to
agree to a deduction he thinks is overstated. The text of the audit and tax conditions is included
in Appendix A. Finally, as part of the instrument development process, expert input was obtained
from nine experienced colleagues and participants at a symposium on behavioral research. The
instrument was also pilot tested twice with students enrolled in two different graduate accounting
classes.11
9
The experiment also included a manipulation of social distance (Tumasjan, Strobel, and Welpe 2011), an element
of moral intensity, by specifying whether the actor in the hypothetical scenario was/was not known to the
participant. However, this manipulation was unsuccessful, and it is not related to any of the study’s dependent or
independent variables; thus, it is excluded from the analyses. The social distance wording at the beginning of the
(audit) scenario is either ‘‘Sam is an audit partner at another firm who is known to you personally; you have both
a professional and personal relationship with Sam’’ or ‘‘Sam is an audit partner at another firm who is not known
to you personally; you do not have a professional or personal relationship with Sam.’’ Additionally, in the second
paragraph of the scenario, those participants in the low social distance condition were reminded that ‘‘Your
friend and fellow accountant Sam, .. .’’ while those in the high social distance condition received no further
information about Sam.
10
Not all clients prefer the most aggressive advice (e.g., see Fleischman and Stephenson 2012); thus, the scenario
explicitly states the client’s preference and it is held constant in all conditions.
11
A number of changes were made to the conditions based on the expert input, all of which related to making the tax
and audit conditions more symmetrical, while preserving the contextual differences. Thus, the two conditions in
this study are much more similar to each other than those used in Pinsker et al. (2009). Other minor wording
changes were made throughout. Based on the pilot-test results/feedback and expert input, the instrument was
shortened by reducing the number of scales that participants are asked to complete.
Measured Variables
Two primary dependent variables are considered: recommendations and behavioral
intentions.12 RECOMMENDATION is measured using participants’ responses to the following
question ‘‘Should Sam [the actor in the scenario] concede this issue (i.e., go along with the client)
in this situation?’’ Responses are on a seven-point scale with 1 ¼ definitely should not concede
and 7 ¼definitely should concede. Participants’ BEHAVIORAL INTENTION is measured as the
likelihood that participants themselves would concede to the client with the following question:
‘‘Imagine you faced the same situation as Sam. Would you concede this issue?’’ Again, responses
are on a seven-point scale with 1 ¼ definitely would not concede and 7 definitely would
concede. Participants’ primary role (as an auditor or tax professional) is based on their responses
to the following three items: ‘‘In your experience in working in public accounting, approximately
what percentage of your work has consisted of audit (tax)(consulting) engagements?’’ The
response scale is in 10 percentage point increments from ‘‘none’’ to ‘‘100 percent.’’ Participants
who respond that they spend greater than 50 percent of their time on audit (tax) engagements are
considered to be auditors (tax professionals). Five participants spend the majority of their time on
consulting engagements and four other participants split their time between consulting, audit, and
tax and, thus, do not have a primary role as an auditor or tax professional. As noted previously,
these participants are excluded from the study. Thus, the final sample includes 87 auditors and 47
tax professionals.
Participants’ ethical orientation may also be important to the resolution of ethical dilemmas
for auditors and tax professionals. Thus, ethical orientation is measured using the 20-item Ethics
Position Questionnaire (EPQ) from Forsyth (1980), which includes two different dimensions of
moral thought: idealism refers to the perspective that desirable consequences can always be
obtained, whereas relativism refers to the perspective that moral absolutes do not apply. Forsyth
and others demonstrate that individual ethical orientation is commonly linked to the ethical
decision- making process (e.g., Forsyth 1981; Forsyth and Berger 1982; Forsyth and Nye 1990;
Forsyth 1992). In general, individuals who have higher degrees of idealism (relativism) are less
(more) likely to behave unethically. Cronbach’s alpha for the IDEALISM (RELATIVISM) scale is
0.879 (0.872). The mean (standard deviation) for the IDEALISM scale is 49.6 (9.8), and 36.5
(10.2) for the RELATIVISM scale (all untabulated). The responses of auditors and tax
professionals, as well as participants in the tax versus audit condition assignment, are not
significantly different from each other (all p . 0.250, untabulated). However, participants do
report higher levels of IDEALISM than RELATIVISM (p , 0.0001, untabulated).
RESULTS
Descriptive Statistics
Table 2 reports descriptive statistics for the dependent variables for all participants by
condition, and Table 3 reports correlation coefficients for relevant study variables. The overall
mean for RECOMMENDATION indicates that participants, on average, believe that Sam should
probably not concede the issue (mean 2.21), and the overall mean for BEHAVIORAL INTENTION
indicates
12
To ensure participants viewed the conditions as ‘‘ethical dilemmas,’’ they were asked to respond to the following
¼
item (this item was placed two screens after the dependent variables were collected): ‘‘Sam’s situation contains
an ethical dilemma.’’ Responses are on a seven-point scale anchored with 1 strongly disagree and 7 strongly
agree. The mean (standard deviation) for this item is 5.7 (1.3). Only 8 percent of responses are 3 or less; 75
percent are 6 or 7. Thus, the vast majority of participants view the conditions as ethical situations. Further, results
are qualitatively similar when participants who responded below the midpoint of the scale on this item are
omitted.
TABLE 2
Means of Dependent Variable by Condition and Professional Role
Panel A: Dependent Variable: RECOMMENDATION

Professional Role
Condition
Auditor Tax Professional Row Totals
Audit 1.80 2.17 1.92
(n ¼ 50) (n ¼ 23) (n 73)
Tax 2.38* ¼
2.80 2.56*
(n ¼ 37) (n ¼ 24) (n 61)
Column Totals 2.05** ¼
2.51 2.21
(n ¼ 87) (n ¼ 47) (n ¼ 134)
Panel B: Dependent Variable: BEHAVIORAL INTENTION

Professional Role
Condition
Audit 2.02** 2.74 2.25
(n ¼ 50) (n ¼ 23) (n 73)
Tax 2.73* ¼
3.33 2.97*
(n ¼ 37) (n ¼ 24) (n 61)
Column Totals 2.32** ¼
3.04 2.57
(n ¼ 87) (n ¼ 47) (n ¼ 134)
* Mean of tax condition is significantly greater than audit condition ( p , 0.05, one-tailed).
** Auditors are significantly less likely to concede than tax professionals ( p , 0.05, one-tailed).
RECOMMENDATION is measured on a seven-point scale as the response to the following question: ‘‘Should Sam
concede this issue (i.e., go along with the client) in this situation?’’ Where 1 ¼ definitely should not concede and 7
definitely should concede. The range of participants’ responses in the Audit (Tax) Condition is 1–5 (1–7).
BEHAVIORAL INTENTION is measured on a seven-point scale as the response to the following question: ‘‘Imagine you
faced the same situation as Sam. Would you concede this issue?’’ Where 1 ¼ definitely would not concede and 7
definitely would concede. The range of participants’ responses in the Audit (Tax) Condition is 1–6 (1–7).
that they probably/maybe would not concede the issue (mean 2.57). Thus, participants are
significantly ( p , 0.0001, untabulated) less likely to recommend conceding versus their
indication of what they would actually do. This is consistent with Thorne’s (2000) findings that
professional accountants have higher levels of prescriptive reasoning (recommendation) than
deliberative reasoning (behavioral intention). Table 2 also shows that auditors are less likely than
tax professionals to recommend conceding (mean of 2.05 versus 2.51,¼p 0.042,
one-tailed) and to indicate that they would concede (mean of 2.32 ¼ versus 3.04, p 0.08, one-
tailed); on average, participants are also less likely to recommend conceding (mean of¼1.92 versus
2.56, p 0.006, one- tailed) and less ¼
likely to indicate that they themselves would concede (mean of 2.25 versus 2.97, p 0.008, one-
tailed) in the audit condition versus the tax condition. These descriptive statistics provide
preliminary support for our first two hypotheses.
Hypotheses Testing
Table 4 reports ANCOVA results for the two dependent variables (RECOMMENDATION and
BEHAVIORAL INTENTION) with the hypothesized effects (auditor/tax professional, audit versus
66
TABLE 3
Correlation Coefficients
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11)
1. RECOMMENDATION 1 0.821 0.163 0.187 —0.132 —0.213 0.249 —0.291 0.166 —0.163 0.019
2. BEHAVIORAL INTENTION 0.803 1 0.247 0.173 —0.104 —0.311 0.335 —0.267 0.157 —0.242 0.000
3. PROFESSIONAL ROLE 0.156 0.207 1 0.094 0.086 —0.196 —0.023 0.025 0.145 —0.826 0.070
4. TAX/AUDIT 0.224 0.216 0.082 1 —0.068 0.062 0.025 —0.230 0.151 —0.040 0.091
5. GENDER —0.182 —0.112 0.084 —0.073 1 —0.085 —0.093 0.098 0.064 0.003 —0.112
6. FIRMSIZE —0.240 —0.336 —0.218 0.051 —0.044 1 —0.040 0.116 —0.017 0.273 —0.089
7. RELATIVISM 0.368 0.421 —0.072 0.039 —0.117 —0.085 1 —0.043 0.096 0.051 —0.223
8. COMPETENCE —0.250 —0.230 0.025 —0.266 0.123 0.112 —0.069 1 0.111 —0.045 —0.139
9. PENALTIES 0.217 0.212 0.167 —0.141 0.084 —0.054 0.113 0.069 1 —0.125 —0.206
10. PERCENTAUDIT —0.203 —0.247 —0.941 —0.062 —0.057 0.258 0.056 —0.051 —0.167 1 —0.100
11. YEARSEXP 0.081 0.029 0.123 0.049 —0.113 —0.207 —0.277 —0.148 —0.215 —0.130 1
Table values are Spearman’s Rho above the diagonal and Pearson Correlation Coefficients below the diagonal.
Bold correlations are significant at p , 0.05 (two-tailed).
Variable Definitions:
RECOMMENDATION ¼ measured on a seven-point scale as the response to the following question: ‘‘Should Sam concede this issue (i.e., go along with the client) in this
situation?’’ Where 1 ¼ definitely should not concede and 7 definitely should concede;
BEHAVIORAL INTENTION measured¼ on a seven-point scale as the response to the following question: ‘‘Imagine you faced the same situation as Sam. Would you concede this
issue?’’ Where 1 ¼ definitely would not concede and 7 definitely would concede;
Beha
PROFESSIONAL ROLE ¼ an indicator variable equal to 0 (1) if the participant’s primary role is in audit (tax);
v TAX/AUDIT ¼ an indicator variable equal to 0 (1) if the experimental condition assignment is an audit (tax) scenario;
i GENDER ¼ an indicator variable equal to 1 (2) if the participant is male (female); B
o FIRMSIZE ¼ an indicator variable equal to 0 (1) if the participant works at a local (international) firm; ob
r ¼
RELATIVISM measured using ten items with a seven-point scale. Higher scores indicate higher levels of relativism. Thus, the range for this variable is 7–70; ek
a COMPETENCE ¼measured on a five-point scale: ‘‘Indicate the importance of whether a good tax professional (independent auditor) would require his/her client to revise the ,
estimate for the charitable contribution deduction (estimate of uncollectible receivables) in considering what Sam should do.’’ Where¼1 not important and 5 extremely H
l important; ag
PENALTIES ¼ measured on a five-point scale: ‘‘Indicate the importance of the likelihood of potential criminal or civil penalties that could be levied on Sam or his firm in e
R considering what Sam should do.’’ Where 1 not ¼ important and 5 extremely important;
m
e PERCENTAUDIT ¼ percentage of participants’ work engagements that are audit. The range of the variable is between 0 percent–100 percent, with higher numbers indicating that
participants spend more time on audit engagements; and
an
s YEARSEXP ¼ total years of public accounting experience of the participants. ,
e an
a d
Professional Role, Context, Gender, and Ethical Decision Making 67
TABLE 4
Hypotheses Testing
ANCOVA Results
BEHAVIORAL
RECOMMENDATION INTENTION
Independent Variable F p-value F p-value
Constant 1.45 0.231 1.47 0.228
PROFESSIONAL ROLE (H1) 2.62 0.054 6.54 0.012
TAX/AUDIT (H2) 4.52 0.017 3.63 0.028
GENDER (H3) 5.69 0.019 3.38 0.034
PROFESSIONAL ROLE 3 0.18 0.676 0.01 0.946
TAX/AUDIT
PROFESSIONAL ROLE 3 4.02 0.047 3.13 0.080
GENDER
TAX/AUDIT 3 GENDER 5.04 0.027 2.98 0.087
FIRMSIZE 6.35 0.013 11.83 0.001
RELATIVISM 15.01 , 0.001 23.34 ,
0.000
F-Statistic 6.505 8.581
Significance Level , 0.0001 , 0.0001
Adjusted R2 0.249 0.313
p-values are one-tailed for H1 and H2, two-tailed otherwise.

The dependent variables in these regression models are the logarithmic transformations of the variables described in
Table 3.
See Table 3 for variable definitions.
tax condition, and gender) and the following covariates: FIRMSIZE, and RELATIVISM.13 Two-
way interaction terms are also included for the hypothesized variables to see if males and females
respond differently. As reported in Table 4, consistent with H1a, participants who are auditors are
less likely to recommend conceding to the client (p ¼ 0.054, one-tailed). H1b is also supported,
as participants who are auditors are less likely to indicate that they would concede to the client
(i.e., behavioral intentions) than are tax professionals (p ¼ 0.012, one-tailed). The results also
support both H2a and H2b, as participants are less likely to recommend conceding to the client (p
¼ 0.017, one-tailed) and less likely to indicate that they would concede to the client in the audit
condition than in the tax condition (p ¼ 0.028, one-tailed). With regard to H3, the effect of
GENDER, a complex picture arises as there is a significant main effect for GENDER, as well as
significant interactions between GENDER and both PROFESSIONAL ROLE and TAX/AUDIT for
both dependent variables (all p , 0.10, two-tailed). This finding is explored in more detail
below.
With respect to covariates, FIRMSIZE is significant, indicating that participants from
international firms are less likely to recommend conceding and to indicate that they would
concede to the client than participants from local firms (both p , 0.03). Second,
RELATIVISM is highly significant with regard to both dependent variables (both p ,
0.0001), with those who are less relativistic being less likely to concede to the client.
13
The distributions of the two dependent variables are significantly skewed. Thus, logarithmic transformations of
the dependent variables are used for hypotheses testing purposes. Results are qualitatively similar to using the
untransformed variables. Further, while the instrument included measures of professional skepticism (Hurtt
68 Bobek, Hageman, and Radtke
2010), client advocacy (Pinsker et al. 2009), and idealism, none of these variables is significantly related to the
dependent variables; thus, they are excluded from all analyses.

TABLE 5
Means of Dependent Variable by Condition, Professional Role, and Gender

Males Only
Professional Rolea Females Only
Professional Role
Tax
Tax
Conditionb Auditor Professional Row Totals Auditor Professional Row Totals
Audit 1.75 2.27 1.90 1.86 2.08 1.94
(n ¼ 28) (n ¼ 11) (n ¼ 39) (n ¼ 22) (n ¼ 12) (n 34)
Tax 2.63 ¼
3.69 3.00 1.92 1.82 1.88
(n ¼ 24) (n ¼ 13) (n ¼ 37) (n ¼ 13) (n ¼ 11) (n 24)
Column Totals 2.15 ¼
3.04 2.43 1.89 1.96 1.91
(n ¼ 52) (n ¼ 24) (n ¼ 76) (n ¼ 35) (n ¼ 24) (n ¼ 58)

Males Only Females Only
Professional Rolea Professional Role
Tax Tax
Conditionb Auditor Professional Row Totals Auditor Professional Row Totals
Audit 1.93 2.82 2.18 2.14 2.67 2.32
(n ¼ 28) (n ¼ 11) (n ¼ 39) (n ¼ 22) (n ¼ 12) (n 34)
Tax 2.92 ¼
4.08 3.32 2.38 2.45 2.42
(n ¼ 24) (n ¼ 13) (n ¼ 37) (n ¼ 13) (n ¼ 11) (n 24)
3.50 2.74 2.23 2.54 2.36
(n ¼ 52) (n ¼ 24) (n ¼ 76) (n ¼ 35) (n ¼ 23) (n ¼ 58)
a
Male auditors are significantly less likely to recommend conceding or to intend to concede than male tax
professionals (p , 0.05, one-tailed).
b
Mean of audit condition for males is significantly less than tax condition ( p , 0.05, one-tailed) for both
auditors and tax professionals.
Analysis of Gender Differences

To further explore differences between the genders, Table 5 reports descriptive statistics for
the dependent variables separately for males and females. The results indicate that for male
participants, both auditors and tax professionals are less likely to recommend conceding (1.90
versus 3.00) and less likely to indicate that they themselves would concede (2.18 versus 3.32) in
the audit condition versus the tax condition (both p , 0.05, one-tailed). Further, both dependent
variables are significantly lower for auditors than tax professionals (RECOMMENDATION 2.15
versus 3.04; BEHAVIORAL INTENTION
2.38 versus 3.50; both p , 0.05, one-tailed). Conversely, there appear to be no significant
differences in the responses based on either condition or professional role for the female
participants in this study.14
14
Untabulated analyses show that female participants are significantly less likely to recommend conceding than
are male participants ( p , 0.05, two-tailed), but there are no statistically significant differences between
males and females in terms of whether they themselves would concede.
TABLE 6
ANCOVA for Males and Females Separately
Males Females
n ¼ 76 n ¼ 58
Behavioral
Behavioral
Independent Recommendation Intention Recommendation Intention
Variable F p-value F p-value F p-value F p-value
Constant 1.36 0.248 1.97 0.165 0.82 0.370 0.20 0.656
PROFESSIONAL ROLE (H1) 7.38 0.004 12.86 0.001 0.07 0.398 0.21 0.325
TAX/AUDIT (H2) 10.90 0.001 9.57 0.002 0.02 0.445 0.02 0.448
FIRMSIZE 5.34 0.024 8.35 0.006 1.34 0.253 3.90 0.054
RELATIVISM 13.39 , 0.000 18.77 , 2.15 0.149 6.33 0.015
0.000
F-Statistic 11.321 15.301 0.999 2.968
Significance Level , 0.0001 , 0.0001 0.416 0.028
Adjusted R2 0.355 0.433 0.000 0.121
p-values are one-tailed for H1 and H2, two-tailed otherwise.
The dependent variables in these regression models are the logarithmic transformations of the variables described in
Table 3.
To confirm the univariate findings reported in Table 5, separate ANCOVA analyses for males
and females are reported in Table 6. The results are interesting. Despite the fact that there are no
significant differences between males and females based on age, position in firm, experience in
audit versus tax, firm size, client advocacy attitudes, relativism, or idealism, 15 the males and
females appear to be using different decision-making schema. The males are strongly influenced
by professional role, context, relativism, and firm size for both RECOMMENDATION (all p-
values , 0.05) and BEHAVIORAL INTENTION (all p-values , 0.01). Conversely, the female
participants are not influenced by professional role or context. Instead, of the variables in our
study, females appear to be influenced only by relativism, and then only for behavioral¼ intentions
(p 0.015) and not recommendations
¼ ( p 0.149). Further, the model investigating females’
recommendations fails to reach statistical
¼ significance (p 0.999). This is in stark contrast to high
significance levels (both p , 0.0001) and adjusted R2 values for the models of both
recommendations and behavioral intentions for the male participants (0.355 and 0.433,
respectively).16 While there is no direct evidence of the decision process used by females, these
results are consistent with the notion that even in a professional accounting context, female
accounting professionals appear to be using a different decision-making process than males.
Females may be more likely to rely on an intuitionist approach (Haidt 2001) or some other
approach, such as those depicted by Forgas’ (1995) affect
15
The only statistically significant difference between males and females on any possible explanatory variable
relates to professional skepticism, with males scoring higher on the professional skepticism scale than females
¼
(22.4 versus 20.8, p 0.018); however, this variable is not related to either dependent variable.
16
While the sample contains a smaller number of females (n¼58) than males (n 76), it is unlikely that the lack of
significance is due to the smaller sample size. The observed effect size for PROFESSIONAL ROLE and TAX/
AUDIT for females is near 0 (largest effect size is 0.001). In comparison, the smallest effect size for the males’
subsample is 0.09.
infusion model.17 This difference in decision-making processes between males and females is an
interesting finding that should be further investigated in future research.
Additional Analyses
The effect of context is further explored in supplemental analyses. 18 Results of this study
indicate that male participants are less willing to concede to the client in the audit context versus
the tax context. This supplemental analysis considers whether differences in the perceived moral
intensity of the two contexts explain this result. 19 Moral intensity is a characteristic of a situation
(Jones 1991); the higher the degree of moral intensity, the more likely a situation will be identified
as containing an ethical issue. Jones (1991) identified six elements of moral intensity: magnitude
of consequences, social consensus, probability of harm, temporal immediacy, proximity, and
concentration of effect. While the effect of moral intensity was not hypothesized, the possibility
that the male accounting professionals in this study may have had different perceptions of the
moral intensity of the two contexts (i.e., audit versus tax) is explored. Two of the six moral
intensity elements were measured: the importance of the magnitude of consequences (the
likelihood of potential criminal or civil penalties that could be levied, labeled PENALTIES), and
the importance of social consensus regarding what an independent auditor/’’good’’ tax
professional would do in the situation (COMPETENCE).20
As shown in the correlation matrix (Table 3), interestingly, the correlation between
PENALTIES and the dependent variables is significantly positive, while the correlation between
COMPETENCE and the dependent variables is negative. Thus, the more importance that
participants place on penalties (what a good auditor/tax professional would do) in their decision
making, the more (less) likely participants are to concede to the client. This relationship suggests
17
As an alternative theory, Forgas (1995) introduced the affect infusion model, which links memory-based and
inferential approaches as complementary rather than competing mechanisms. Forgas (2008, 97) suggests that
‘‘Affect infusion is most likely when constructive processing, such as substantive or heuristic processing, is
used.’’ His affect infusion model ‘‘predicts that the extent of affective influences on social thinking should
critically depend on the kind of information processing strategies recruited by a given task and context’’ (Forgas
2008, 97).
18
Two untabulated sensitivity analyses were also performed with respect to professional role. First, the binary
classification of professional role is replaced with a continuous variable representing the percentage of time
participants spent on audit engagements. The results are unchanged. Second, a variable labeled CONGRUENT,
which is equal to 1(0) if the participant’s experimental condition is (is not) congruent with his/her primary role,
is constructed. When this variable is added to the analyses it is not significant and inclusion of this variable does
not change the results in any way. This suggests that participants who are in a familiar context do not respond
any differently than those who are in a more unfamiliar context. Finally, as noted in Table 1, data on participants’
age, years of experience, and position in firm were also collected. None of these demographic variables is related
to participants’ ethical decision making (all p . 0.200, untabulated).
19
Note that because only males are influenced by context, the effect of moral intensity is explored only with the
male participants. Untabulated analyses investigate whether females’ ethical decision making is influenced by
moral intensity, and it is not. Thus, the results reported in this section only hold for the male participants.
Additionally, for ease of exposition, the reported results leave out the other variables from Table 4 (i.e.,
PROFESSIONAL ROLE, RELATIVISM, and FIRMSIZE). The results are qualitatively similar when these
variables are included in this supplemental analysis.
20
Measures of all six dimensions are included in the instrument, but only these two components are significantly
correlated with the dependent variables. Note that these measures are similar to those used by Sweeney, Pierce,
and Arnold (2013), who find that ethical intensity (i.e., moral intensity) mediates the relationship between ethical
culture and ethical decision making related to audit-quality-threatening behaviors. Specifically, their social
consensus items asked whether an action would be acceptable by other audit professionals, while their magnitude
of consequences items (which they labeled ‘‘actual harm’’) included the overall harm that would result from an
action. Participant responses were on a seven-point agree/disagree Likert scale. In the present study, following
Thorne (2000), participants respond to the moral intensity items by indicating how ‘‘important each factor was’’
to their decision on a five-point scale with 1 ¼ ‘‘not important’’ and 5 ¼ ‘‘extremely important.’’
TABLE 7
Moral Intensity Variables—Males Only
Panel A: Magnitude of Consequences: PENALTIES

Professional Role
Condition
Audit 3.71 3.91 3.77
(n ¼ 28) (n ¼ 11) (n 39)
Tax 3.92 ¼ ,**
4.54* 4.14
(n ¼ 24) (n ¼ 13) (n 37)
4.25* 3.95
(n ¼ 52) (n ¼ 24) (n ¼ 76)
Panel B: Social Consensus: COMPETENCE

Professional Role
Condition
Audit 4.14** 3.45* 3.95**

(n ¼ 28) (n ¼ 11) (n 39)
Tax 3.46 ¼
3.54 3.49
(n ¼ 24) (n ¼ 13) (n 37)
3.50 3.95
(n ¼ 52) (n ¼ 24) (n ¼ 76)
* Significantly different between auditors and tax professionals at p , 0.05.

** Significantly different between conditions at p ,
0.05. See Table 3 for variable definitions.
that participants who are strongly concerned about penalties view the decision as more of an
economic (as opposed to ethical) decision.
Table 7 displays the means of the moral intensity variables by condition (for the male
participants only) and shows that the importance of PENALTIES and COMPETENCE varies by
condition. For example, a concern for penalties (PENALTIES) is considered the most important
for tax professionals in the tax condition. In addition, the importance of social consensus
(COMPETENCE) is more important in the audit condition than in the tax condition. Thus, given
that these two variables are related to the dependent variables and that participant perceptions
differ by condition, it is possible that moral intensity mediates the effect of context on ethical
judgments. To explicitly test whether moral intensity mediates the effect of the TAX/AUDIT
context, Hayes’s PROCESS tool for SPSS (Hayes 2013) is used to determine the direct and
indirect (through moral intensity) effect of context on ethical judgments. The results of this
analysis are shown in Figure 1, Panel A for RECOMMENDATION and Panel B for
BEHAVIORAL INTENTION. These results show that context is partially mediated by
COMPETENCE as there is a significant indirect effect ¼ of TAX/AUDIT on RECOMMENDATION
(b ¼ 0.086, 95 percent Confidence Interval [0.011,
0.228]) and BEHAVIORAL INTENTION (b 0.096, 95 percent Confidence Interval [0.009,
0.253]) through COMPETENCE. The direct effect of TAX/AUDIT remains significant, however
(both p , 0.10). Further, while PENALTIES has a direct effect on ethical judgments (both p ,
0.01), it is not a mediator of context, as the direct path from TAX/AUDIT to PENALTIES is not
significant (p ¼
FIGURE 1
Supplemental Analysis—Moral Intensity (Males Only)
0.151 for both RECOMMENDATION and BEHAVIORAL INTENTION). While these results were
not hypothesized and are exploratory, they suggest that differences in the ethical decision making
of male participants may be due, in part, to differences in the perceived moral intensity of the
contexts. Thus, further study of the role of the moral intensity of accounting contexts is an
important avenue for future research.
CONCLUSIONS
This paper investigates the degree to which professional role, context, and gender influence
the ethical decision making of public accounting professionals. The results show that male
participants’ professional experience influences their ethical decision making, as auditors are less
likely than tax professionals to recommend conceding to the client and to indicate that they would
concede when faced with a contentious client issue. The results also indicate that context plays an
important role in ethical decision making, as male professional accountants are less likely to
recommend that a third party concede to the client in an auditing context than in a tax context, and
are less likely to indicate that they themselves would concede. The effect of context is partially
mediated by perceptions of
the moral intensity (specifically, the element of social consensus) of the situation. Furthermore,
the results highlight the importance of individual attributes in making ethical decisions; in
particular, accountants’ ethical judgments are influenced by relativism and firm size. In addition,
an interesting gender effect is identified in that females appear to use a different decision-making
process than males with respect to ethical situations. Specifically, except for the effect of
relativism on behavioral intentions, the results obtained for the full sample of 134 professionals
appear to be driven by the male participants. When males and females are analyzed separately,
professional role, context, firm size, and moral intensity are not significantly related to females’
ethical decision making.
These results should be interpreted in light of its limitations. First, the auditing and tax
conditions are not identical. The expense item for the auditing (understatement of expenses) and
tax (overstatement of deductions) contexts are different. With the exception of the difference in
expense item in question, however, the content and language in both conditions is virtually
identical. Second, participants may not have felt comfortable with the ethical nature of the
scenarios. As a result, those who did respond may have been influenced by social desirability bias
in that they may have responded in a way they thought the researchers were expecting. Third, the
sample was drawn from CPA firms from the U.S. in two states, potentially limiting the
generalizability of the results to the larger population of public accounting professionals. Fourth,
the results with respect to moral intensity are exploratory; future research should more
thoroughly consider how context relates to perceived moral intensity, as well as develop more
comprehensive measures of this construct. Finally, the results appear to be driven by the male
(as opposed to female) participants. Future research should explore these differences in the
decision-making processes of males and females. This study makes several contributions to the
ethics and behavioral accounting literature. First,
the results highlight the importance of context in ethical decision making. This suggests that ethics
researchers should carefully consider the potential influence of the context of a situation,
especially when prescribing norms for expected ethical behavior. These results also highlight the
importance for accounting firm leaders to consider the differences between the professional
responsibilities inherent in the audit and tax contexts when developing firms’ ethics training
programs. Given that the lines dividing ‘‘auditors’’ and ‘‘tax professionals’’ are increasingly
being blurred, firms’ training programs should take into consideration both differences in context
and individual differences in experiences due to professional roles. Future research should also
further examine how the moral intensity of a situation (e.g., Jones 1991; Sweeney et al. 2013) may
vary depending upon the context, which could affect accounting professionals’ ethical decision
making.
Second, this study also identifies an interesting gender difference with respect to the ethical
decision-making process between male and female accountants. This study contributes
theoretically to the accounting literature through the introduction of alternative theories of ethical
decision making, which has important practical implications for the development of ethics training
in accounting firms. Specifically, this study considers the implications of the social intuitionist
framework (Haidt 2001, 2012; Reynolds 2006) for accounting research and practice. Ethics
training programs should take into consideration that there are different ethical decision-making
styles and that not all individuals use the same ethical decision-making process. Broadening the
scope of such programs could aid in facilitating learning and awareness of ethical situations,
resulting in improved ethical decision making throughout the firm. Herington and Weaven (2008)
also recommend a more customized (as opposed to standardized) approach to ethics training. In
fact, they argue that standardized ethics training may be particularly detrimental to males.
Furthermore, as noted by Kornberger et al. (2010), gender is an under-researched area in
accounting. Given the relative homogeneity on all other dimensions of the participants in this
study, this difference in the ethical decision-making process of males and females may have
implications for other professional decision-making contexts that should be explored by future
researchers.
Third, the results add to the findings of previous studies, such as Wakefield (2008), with
respect to the individual attributes of accounting professionals. Wakefield (2008) investigated the
construct of Machiavellianism, which represents a negative character trait including such features
as bad faith, cunning, manipulation, and duplicity. While the overall sample mean of accountants
in the Wakefield (2008) study is considered below a ‘‘neutral’’ score, those with higher levels of
Machiavellianism also report significantly higher levels of relativism. She also finds that younger
males with higher levels of education score higher on the Machiavellianism scale. In our study,
those who are less relativistic are less likely to concede to the client. Further, the decision-making
processes of males and females are significantly different. With the increased emphasis on firms’
ethics training, these results add to the premise that ‘‘one size fits all’’ training programs are
unlikely to achieve the desired results, and that firms’ ethics training may need to be tailored to
account for different individual approaches to decision making. Overall, these results have
important theoretical and practical implications for the accounting ethics literature and public
accounting firms alike.
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APPENDIX A
Example of Conditions21
Text of Audit Condition
Sam is an audit partner at another firm (.. .). He is the audit engagement partner on the
Oxford Manufacturing audit. Oxford is a privately owned company and one of his firm’s largest
clients. A contentious issue has emerged during this year’s annual audit engagement. During the
year, the client’s past-due accounts receivable balance has grown significantly. Sam believes the
client’s estimate of bad-debt expense is far too low compared to the estimation method that is
standard for the industry. Due to the economic downturn, others in the client’s industry have
increased their estimates of bad debts considerably. In fact, due to the increase in the amount of
past-due accounts, Sam believes that the client’s estimate for uncollectible receivables is
understated by a large amount.
21
The (.. .) represents the removed social distance text, which can be found in Footnote 9.
The client is unwilling to budge on this issue. The client’s CEO believes that it is merely a
difference of professional opinion regarding the adequacy of the estimate. The client feels that his
own staff has specialized knowledge of the customer base, which renders their estimate of
collectability (which is consistent with prior years) more reliable than estimates determined by the
standard industry estimation method. (.. .) Sam has conducted additional audit procedures and
remains convinced about his conclusions.
The client needs a clean audit opinion in order to extend its line of credit at the bank. While
Sam has a strong desire not to lose the client, in Sam’s judgment, the expense is clearly
understated.
Text of Tax Condition

Sam is a tax partner at another firm (.. .). He is the tax engagement partner on the Oxford
Manufacturing tax engagement. Oxford is a privately owned company and one of his firm’s
largest clients. A contentious issue has emerged during preparation of this year’s tax return.
During the year, the client donated a parcel of undeveloped land to a charitable organization.
While the client is allowed a tax deduction equal to the fair market value of the land at the time of
the donation, Sam believes the client’s estimate of the fair market value of the land (based on an
appraisal from a real estate appraiser that is regularly used by the client) is far too high compared
to the appraised value produced by an independent appraisal specialist from Sam’s accounting
firm. In fact, due to the uncertainty surrounding land values in the current economic environment,
Sam believes that the client’s estimate for the charitable contribution deduction is overstated by
a large amount.
The client is unwilling to budge on this issue. The client’s CEO believes that it is merely a
difference of professional opinion regarding the adequacy of the estimate. The client feels that his
own appraiser (which the client regularly uses) has specialized knowledge of the neighboring
area, which renders his estimate of the land value more reliable than the independent appraiser’s
value. Sam has conducted additional research and remains convinced about his conclusions. The
client is not willing to disclose this position on the tax return.
The client needs this deduction in order to avoid having to pay a large tax due when filing its
income tax return. While Sam has a strong desire not to lose the client, in Sam’s judgment, the
charitable contribution deduction is clearly overstated.
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BEHAVIORAL RESEARCH IN ACCOUNTING American Accounting Association

Vol. 27, No. 1 DOI: 10.2308/bria-

The Effects of Professional Role, Decision

Behavioral Research In Accounting

Behavioral Research In Accounting

THEORY, PRIOR RESEARCH, AND HYPOTHESES DEVELOPMENT

Panel A: Dependent Variable: RECOMMENDATION

Panel B: Dependent Variable: BEHAVIORAL INTENTION

p-values are one-tailed for H1 and H2, two-tailed otherwise.

Behavioral Research In Accounting

Panel A: Dependent Variable: RECOMMENDATION

Panel B: Dependent Variable: BEHAVIORAL INTENTION

Analysis of Gender Differences

Panel A: Magnitude of Consequences: PENALTIES

Panel B: Social Consensus: COMPETENCE

Audit 4.14** 3.45* 3.95**

* Significantly different between auditors and tax professionals at p , 0.05.

Panel A: Dependent Variable: RECOMMENDATION

Panel B: Dependent Variable: BEHAVIORAL INTENTION

See Table 3 for variable definitions.

Text of Tax Condition

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