Organizational Leadership and Ethical Climate in Utah’s
Certified Public Accounting Profession
(90-minute Presentation Slides) by
Jeffrey N. Barnes, CPA, MAcc
Oral Defense Slides in Partial Fulfillment of Requirements for the Degree
Doctor of Business Administration
UNIVERSITY OF PHOENIX
February 2013

Chapter 1, Introduction
• CPAs are critically involved with assuring fair presentation of financial statements.
• Fraudulent financial reporting continues
(Arens, Elder, & Beasley, 2012; Apostolou
& Crumbley, 2007).
• Foundations of fraudulent behavior are rooted in sociological, psychological, and moral-development theories
(Albrecht, Romney,
Cherrington & Roe, 1982).

Chapter 1, Introduction
Sociological Theories
• Differential association, with focal leader, contributes to informing and perpetuating unethical behavior
(Galliher & Guess, 2009).
• CPA profession organizational structure lends to fragmented and departmentalized workplace environments
(Darley, 2004).
• Ethical climates are “. . . the perceived prescriptions, proscriptions, and permissions regarding moral obligations
in the organization”
(Victor & Cullen, 1988, p. 101).

Chapter 1, Introduction
Purpose of the Study
• Quantitative research study with correlation design to describe and quantify relationships between
– focal supervisor’s leadership style,
– subordinate’s ethical climate perceptions,
– religiosity influence, and
– regulations’ influence.

Chapter 1, Introduction
Significance of the Problem
• Accounting profession to benefit from the study by,
– understanding current state of organizational leadership,
– finding confirmatory or disconfirmatory evidence that leadership correlates to ethical perceptions,
– determining if religiosity and regulatory influence relate to leadership and ethical climate perceptions, and
– designing leadership training interventions.

Chapter 1, Introduction
Significance of the Problem
• A growing body of literature, although small in scope,
provides some information about public accounting firms’ leadership, ethical climate, and firm personnel’s cognition of its importance
(Bobek, Hageman, & Radtke, 2010; Gunz, Gunz, & McCutcheon, 2002; Jiambalvo & Pratt,
1982).

Chapter 1, Introduction
Overview of the Research Design
• This quantitative research study, with a correlation design, investigated the relationships between independent, dependent, and moderating (intervening) variables
(Creswell, 2005).
• The model variables are,
– leadership style (IV),
– ethical climate perception (DV),
– religiosity (MV, treated as an IV), and
– understanding of FSGO (MV, treated as an IV).

Chapter 1, Introduction
Overview of the Research Design
• The research sought to explore answers to the following questions:
1. To what degree do partners, managers, a nd supervisors’ various leadership
styles relate to the subordinate’s perception of what are ethical
expectations and behaviors to be followed?
2. To what degree does the subordinate’s knowledge of regulatory
influence relate to the subordinate’s perception of the ethical climate and the focal leader’s leadership?
3. To what degree does the subordinate’s religiosity or compassionate service relate to the subordinate’s perception of the ethical climate and
the focal leader’s leadership?

Chapter 1, Introduction
Overview of the Research Design
• H1
0
: A leaders’ transformational leadership style does not relate to the subordinate’s perception of the firm’s ethical climate in Utah.
• H2
0
: A leaders’ transactional leadership style does not relate to the subordinate’s perception of the firm’s ethical climate in
Utah.
• H3
0
: A leaders’ laissez-faire leadership style does not relate to the subordinate’s perception of the firm’s ethical climate in
Utah.

Chapter 1, Introduction
Overview of the Research Design
• H4
0
: Known exogenous regulatory/punishment factors, as perceived by subordinates, do not relate to the subordinate’s perception of the firm’s ethical climate and immediate leadership in Utah.
• H5
0
: The degree of service or church attendance does not relate to the subordinates’ perception of the firm’s ethical climate and immediate leadership in Utah.
• Alternate hypotheses, for each of the null hypotheses, suggest that relationships exist

Chapter 1, Introduction
Overview of the Research Design

Chapter 1, Introduction
Summary
• Established that fraudulent financial reporting continues
• Suggested a background for the problem rooted in sociology, psychology, ethics, moral development; and perhaps influence by professionals’ regulations and religiosity
• Stated the significance of the problem to the public and the accounting profession
• Proposed a quantitative research project, with correlation design

Chapter 2, Review of Literature
Introduction
• The current study,
– explains previous research related to leadership and ethical climate, which is sparse in the accounting profession,
– provids secondary evidence regarding regulatory controlling
subordinate effect, and
– provides secondary evidence regarding the nascent emerging
positive subordinate effects of religiosity.

Chapter 2, Review of Literature
Documentation
Category of Documentation
2006 to present
Number
123
Percentage
44.2%
Prior 2006
All references
Founding or extending theorists
Empirical research
Peer-reviewed articles
Books
Dissertations/unpublished research
Official websites
57
4
18
154
277
41
83
198
55.8%
100.0%
14.8%
30.0%
71.5%
20.6%
1.4%
6.5%

Chapter 2, Review of Literature
Moral Philosophies and Ethics Theories
• A review of moral philosophy, as founded in ethics theories, is useful for identifying the common struggles ethics systems seek to resolve. Moral philosophy can be categorized in a
number of frameworks, this study categorizes as,
– Maximizing self-interests,
– Maximizing joint-interests, and
– Standing on moral principles.
• Related to accounting, criticisms exist for each of these moral philosophical frameworks

Chapter 2, Review of Literature
Ethics and Effective Leadership
• Underpinning leadership style is the individual’s ethical
philosophy, whether that generally be leaning toward
egoism, benevolence, or universal principles.

Chapter 2, Review of Literature
Ethics and Effective Leadership
•
managers in the highest stage of moral reasoning exhibited more transformational leadership traits and behaviors
(Turner, Barling, Epitropaki, Butcher, and Milner (2002).
• Similar results with the Norwegian Naval Cadets in which
(Olsen, Eid, and Johnsen (2006).

Chapter 2, Review of Literature
Leadership
• Leadership is about influencing individuals and groups within an organization
(Nahavandi, 2006).
• Leadership has many definitions; however, all leadership definitions have the common thread of influencing others to
accomplish organizational objectives. Important is the responsibility that leadership has to set the ethical tone about how to accomplish organizational objectives.
• Leaders are responsible for creating an ethical work climate
(Schminke, Arnaud, & Kuenzi, 2007).
• Some evidence has shown that top management’s ethical
climate standards and perceptions do not necessarily filter
down to lower-level employees
(Trevino, Weaver, & Brown, 2008).

Chapter 2, Review of Literature
Full-range Leadership Theory
• The full-range leadership theory (FRLT) has been a relied upon as a valid continuum describing the range of leadership
styles exhibited by effective organizational leaders
(Lowe, Kroeck, &
Sivasubramaniam, 1996).
• Regarding the FRLT model, with its nine leadership
descriptions (subscales), were stable and that leadership effectiveness lessened the further away the leadership style
ventured from the transformational description down through transactional and to the laissez-faire leadership styles
(Lowe, Kroeck, & Sivasubramaniam, 1996).

Chapter 2, Review of Literature
Leadership and Subordinate Socialization
• The fundamental leadership relational association hypothesizes to affect an organizational ethical and moral climate
(Neubert et al., 2009).
• The most important ethical figures in an organization are the
leaders and the values they possess, both by word and by deed.
• Interpersonal leader-to-subordinate relationships influence ethical behavior and perceptions
(Mumford, Waples, Antes, Murphy, Connelly, Brown, &
Davenport (2009).

Chapter 2, Review of Literature
Leadership and Its Linkage to Ethical Climate
• Supervisors “. . . influence employees’ perceptions of the policies and practices, i.e., ethical climate”
(Wimbush & Shepard, 1994, p. 645).
• Postulated that their results (i.e., correlation study findings)
“show that managers’ attitudes, shaped by the tone set by
top executives, significantly influence managers’ decisions to
behave unethically or not”
(Carpenter & Reimer, 2005, p. 125).
• Finding correlative relationships between Bass and Avolio’s full-range leadership theory styles and ethical climate
perception would be useful knowledge in the accounting profession.

Chapter 2, Review of Literature
Ethical Climate Theory to Leadership
• The AICPA’s Statement on Quality Control Standards (SQCS)
No. 7, A Firm’s System of Quality Control, requires . . . policies
and procedures to ensure that services are competently delivered and adequately supervised with independence, integrity, objectivity, and concern for the public trust
(AICPA, 2011a).
• The ethical principles of independence, integrity, objectivity,
and concern for the public trust are intellectual virtues.
These virtues should be foundational in the ethical decision making for members of the AICPA.

Chapter 2, Review of Literature
Ethical Climate Theory to Leadership
• Brown, Trevino, and Harrison (2005) found that “. . . ethical
leadership predicts outcomes such as perceived effectiveness
of leaders, employees’ satisfaction with the job, and their willingness to extra effort into the work and to report
problems to management”
(as cited in Toor and Ofori, 2009, p. 536).
• Victor and Cullen (1988) developed a theoretical framework for assessing the ethical context within which employees operate.

Chapter 2, Review of Literature
Ethical Climate Theory
Nine Theoretical Ethical Climate Types
Ethical
Criterion
Egoism
Benevolence
Principle
Individual
Locus of Analysis
Local Cosmopolitan
Self-interest
(EI)
Friendship
(BI)
Company profit
(EL)
Efficiency
(EC)
Team Interest
(BL)
Social responsibility
(BC)
Personal morality
(PI)
Company rules and procedures
Laws and professional codes
(PL) (PC)
Source: Victor and Cullen (1988, p. 104).

Chapter 2, Review of Literature
Ethical Climate Theory
• Victor and Cullen’s (1988) five empirically derived ethical
climate types have remained rather stable over time and addressed in some limited accounting peer-reviewed journal articles
(Martin & Cullen, 2006).

Chapter 2, Review of Literature
Ethical Climate Theory
Five Statistically Derived Ethical Climate Types
Instrumental
Caring
Independence
Rules
Lawcode
Egoism
Locus of Analysis
Individual
Self-interest
(EI)
Local
Company profit
(EL)
Cosmopolitan
Efficiency
(EC)
Ethical
Criterion
Friendship
(BI)
Team Interest
(BL)
Social responsibility
(BC) Benevolence
Principle
Personal morality
(PI)
Company rules and procedures
(PL)
Laws and professional codes
(PC)

Chapter 2, Review of Literature
Public Accounting Ethical Climate Summary
• The several ethical climate research studies for public accounting indicate the importance of ethical climate
perceptions on subordinate decision making
(Buchan, 2005).
• In this Asian study, the public accountants’ ethical climate perceptions of “. . . rules codes, caring, self-interest, social
responsibility, and instrumentalism, while efficiency and personal morality were perceived higher in the private sector”
(Venezia, Venezia, & Hung, 2010, p. 77).

Chapter 2, Review of Literature
External Control Factors—FSGO Regulations
• Some important regulatory control efforts to curb corruption and fraud in U.S. business have been the establishment of the
Federal Sentencing Guidelines for Organizations (FSGO) and related subsequent amendments as well as the Sarbanes-
Oxley Act of 2002 regulations.
• Commission determined, through input from their newly organized Advisory Board, to “. . . encourage organizations to
foster ethical requirements as opposed to mere technical compliance that can potentially circumvent the intent or spirit of law or regulation”
(FSGO, 2010. p. 738).

Chapter 2, Review of Literature
Religiosity
• Religion is thought to influence business individuals’ ethical decision making and ethical climate perception within organizations
(Weaver & Agle, 2002).
• Recently, religiosity, spirituality and ethics are emerging, in
management literature, as possibly related factors for positive
effectiveness
(Corner, 2009).
• Communities with religious institutions, in which a higher discourse of spiritual values is taught and ritually and personally
practiced, nurture spirituality. Spirituality, in a form of religious and community service orientation, enhance ethical behavior intention
(Christensen et al., 2005).

Chapter 2, Review of Literature
Summary
• An organization’s ethical climate, is founded on the collective
foundation of it individuals moral and ethics philosophies.
These moral and ethical philosophies are related to the five
empirically derived ethical climate types found within organizations.
• Organizational leadership shapes and is shaped by the organization’s ethical climate. Potentially affecting the public accountants’ perceptions of organizational leadership and ethical climate are two potential moderating variables, which are awareness of regulatory statutes and personal religiosity, respectively.

Chapter 2, Review of Literature
Summary
(cont.)
• Both the lack of empirical research into the public accounting
profession and the possible insights correlative influence
these two moderating variables could provide and substantiate the additional needed empirical studies regarding the current state of accounting firms’ ethical climate structure and the prevailing leadership style typically exhibited.

Chapter 3: Method
Theoretical Model Design
Superiors'
Leadership Style
(IV: H1, H2, H3)
9 Leadership Scales
(MLQ Survey,
45 Questions)
H4
Known Exogenous
Regulatory/Punishment
Factors
(MV: H4)
1 FSGO Scale
(FSGO Survey,
12 Questions)
H4
H1, H2, H3
Subordinates'
Perception of
5 Ethical Climate Scales
(DV)
(ECQ Survey,
26 Questions)
H5
Extent of
Religiosity/Compassionate
Service
(MV: H5)
1 Scale
(REL Survey,
4 Questions) Legend:
DV Dependent Variable
IV Independent Variable
MV Moderating (Intervening) Variable
H Hypothesis
H5
Figure 2 . Statistical Integrated Leadership & Ethical Climate Framework

• First, a researched body of knowledge already exists regarding the
major concepts of leadership styles and their effect on subordinate employees’ perceptions of organizational ethical climate
(Dahlin, 2009).
• Second, this quantitative research with correlation design also
sought understanding of whether a social or psychological phenomenon possesses confirmatory reality
(Campbell & Stanley, 1963).
• Third, the quantitative research questions found answers to what
degree a variety of variables correlatively impact the subordinate’s perception of the organizational ethical climate and leadership style.

Chapter 3: Method
Population
• In 2010, approximately 1,175 certified public accountants
(CPAs), in the practice of public accounting, in the State of
Utah and members of the Utah Association of Certified Public
Accountants
(UACPA, 2009).
• There were 469 separate physical CPA firm offices in Utah at the time of the study, many with below five CPAs. Of the 469 firms, only 41 firms with five or more CPAs exist
(UACPA, 2009).
• 11 CPA firms provided written permission to contact organization personnel, via email, for the administration of the electronic survey of this research study.

Chapter 3: Method
Population
(Cont.)
Administrative
Partner,
CPA
Tax
Services
Supervisor,
CPA
Assurance
Services
Supervisor,
CPA
Tax
Services
Subordinate,
CPA
Assurance
Services
Subordiante,
CPA
Figure 3.
Minimum Practice Structure Sought from Population.

Cochran’s
Sample Size Formula
• n = (t) 2 * (s) 2
(d) 2
Chapter 3: Method
Sample
Minimum Desired Sample Size
• Calculation of desired sample size is, n = [((1.96) 2 *
(1.25) 2 )/(.25) 2 ] = 96.04 or rounding up, 97 respondents

Chapter 3: Method
Data Collection
(Cont.)
• The original request was sent on February 7, 2012, the
second request was sent on February 18, 2012, and the third
and last request was sent March 13, 2012.
• The 257 email addresses, at the time the survey was administered, there was provided 236 continuing valid
prospective respondents. The reduction of 21 emails represented natural attrition from the firms. The number of survey participants was 103 from a target population of 236, providing a 43.6% response rate.

Chapter 3: Method
Pilot Study
Table 9
Summary of Changes to the Survey based on Pilot Sample Recommendations
Pilot Sample Recommendation
“Please provide an orientation statement before each survey.”
Corrective Change to Survey
Before each of the four surveys, an orientation statement was made to help focus the survey responder to the immediate survey’s intent and
“I was able to proceed to the next page without having answered all the questions on the survey webpage.” context.
The survey instrument was changed to disallow progressing to a next survey webpage without all the questions being answered. If the survey respondent neglected to answer a question, that questions was turned into red text to highlight the error. The question then needed to be completed in order to proceed forward with the survey.
Changed scale as recommended.
“In the REL survey, measuring religiousness, the scale did not make sense, ‘1’ should be
‘most important’ and ‘5’ should be ‘least important.’”
“Place the FSGO survey last, so those that don’t have SEC clients would just bypass that survey and go directly to the demographic questions.”
“Fix some minor spelling errors.”
Source: Personal interview by researcher.
Changed survey sequence as recommended.
Fixed the several identified spelling errors.

Chapter 3: Method
Instrumentation
• Four instruments were used in this research study, the
– Multifactor Leadership Questionnaire (MLQ), or standard MLQ, or also known as the MLQ 5X short, by Avolio and Bass (2004),
– Ethical Climate Questionnaire (ECQ), by Victor and Cullen (1987,
1988),
– Understanding of Federal Sentencing Guidelines for Organizations, by researcher (2012), and
– Religiosity, by researcher (2012).

Chapter 3: Method
Researcher Error with ECQ Instrument
(Cont.)
Proper Ethical Climate Questionnaire Scale and Scale Used in This Study
Proper ECQ Measurement Scale Measurement Scale of this Study
0—Completely false
1—Mostly false
2—Somewhat false
3—Somewhat true
4—Mostly true
5—Completely true
1—Completely false
2—Mostly false
3—Somewhat false
4—Mostly true
5—Completely true

Chapter 3: Method
Researcher Error with ECQ Instrument
(Cont.)
• According to Bart Victor, Ph.D. (personal communication,
August 2, 2012), who is one the originators of the Ethical
Climate Questionnaire (Victor and Cullen, 1988), this study’s collected data would expect to still be meaningful. He provided the following guidance,
. . . the data collection need not be reperformed; to address the scale error in the ‘Methods’ section of the dissertation; to state that the existing data means, variances, and correlations are meaningful and reportable; to suggest that the scale errors do not cause a systemic or universal disqualifying error, because the recorded survey respondents’ impressions about the perceived ethical climate types are still valid; to not transform the data, thus, to use the existing data as is; and to check for similar intercorrelations and reliability.

Chapter 3: Method
Researcher Error with ECQ Instrument
(Cont.)
Victor & Cullen, 1988,
Intercorrelations and
Cronbach’s Alphas
Climate Scales 2 3 4 5 Alpha
1.
Caring .45 .42 -.40 .19 .80
2.
Law and code .55 -.14 .07 .79
3.
Rules -.09 -.07 .79
4.
Instrumental
5.
Independence
R > .06 (p < .05)
.05 .71
.60
This Study’s
Intercorrelations and
Cronbach’s Alphas
Climate Scales 2 3 4 5 Alpha
1.
Caring .35 .49 -.16 .18 .62
2.
Law and code .68 -.38 .04 .68
3.
Rules -.39 .10 .76
4.
Instrumental
5.
Independence
.10 .83
.69

Chapter 3: Method
Correlation Analysis Interpretive Scale
Guilford Interpretation of the Magnitude of Significant Correlations
Absolute Value of Rho ( r ) Interpretation
< .20 Slight, almost no relationship
.20 - .39
.40 – .69
.70 – .89
.90 – 1.00
Low correlation, definite but small relationship
Moderate correlation, substantial relationship
High correlation, strong relationship
Very high correlation, very dependable relationship
Source: Van Aswegen & Engelbrecht, 2009, p. 5.

Chapter 3: Method
ANOVA Analysis
• Prior to running the ANOVA analyses, assumptions for
ANOVA were tested. The assumptions for normality were tested, which ascertain that the scores be normally distribution around the mean of the dependent variable.
Histograms were developed for all the dependent variable ethical climate types.
• Also tested was the homogeneity of variance, which requires that the groups have equal variances in the population.
Scatterplots of dependent variable’s various ethical climate types were constructed to determine the absence of heteroscedasticity. Both histograms and scatterplot tests were performed visually.

Chapter 3: Method
ANOVA Analysis
(Cont.)
• ANOVA analysis was performed for those correlative relationships with statistical significance. ANOVA or analysis of variance provided the F-
significance.
crit statistic (F-test, F), R 2 , and

Chapter 3: Method
Univariate Analysis
• Statistical analysis also treated the demographic categories, with sufficient subsample size, as independent variables.
• Running univariate analysis of variances between the demographic independent variable and the leadership independent variable to the ethical climate’s dependent variables was performed. Those relationships that demonstrated significant relationships were reported

Chapter 4: Results
Statistical Analyses
• Descriptive statistics
• Assumptions Regarding Models Used
– Normality of Distributions
– Homoscedasticity
• Findings for Hypothesis 1—Transformational Leadership’s
Relationships to Ethical Climates
• Findings for Hypothesis 2—Transactional Leadership’s
Relationships to Ethical Climates
• Findings for Hypothesis 3—Laissez-faire Leadership’s
Relationships to Ethical Climates

Chapter 4: Results
Statistical Analyses
• Findings for Hypothesis 4—Regulatory Influence Relationships to Leadership and Ethical Climates
• Findings for Hypothesis 5—Religiosity’s Relationships to
Leadership and Ethical Climates
• Limited Cross-sectional Statistical Analysis
• Post Hoc Power and Effect Size Analysis

Chapter 4: Results
Descriptive Statistics
Respondents’ Personal Information
Age Freq. Gender Freq.
<26
26-40
41-55
>55
6 Female
74
19
4
Male
Educ.
29
74
AS
BS
MS
JD, etc.
Freq.
3
17
81
2
Total 103 Total 103 Total 103
CPA?
Yes
No
Total
Freq.
79
24
103

Chapter 4: Results
Descriptive Statistics
Respondents’
Relationship to and CPA Firm Information
Years with
Firm Freq.
Work
Function Freq.
Respon.
Level Freq.
Firm
Size Freq.
0-2
3-4
5-10
> 10
18 Assurance 61 Partner
27 Tax
32 Consulting
26 Other
35
5
Manager
Staff
11 Big 4
42 National
2 Supervisor 31 Regional
19 Local, large 50
Local, small
0
1
32
20
Total 103 Total 103 Total 103 Total 103

Chapter 4: Results
Findings for Hypothesis 1--Correlations
Transformational
(IV)
Pearson Correlation
Caring
(DV)
.411
Lawcode
(DV)
.282
Rules
(DV)
.402
Instrumental
(DV)
-.525
Significance (2-tailed), p -value .000** .004** .000** .000**
N 103 103 103 103
Independence
(DV)
.093
.349
103

Chapter 4: Results
Findings for Hypothesis 1--ANOVA
Transformation Leadership to
Caring Ethical Climate
Transformation Leadership to
Lawcode Ethical Climate
Transformation Leadership to
Rules Ethical Climate
Transformation Leadership to
Instrumental Ethical Climate
Model
Sum of
Squares df
Mean
Square F-test R
2
Sig.
187.525 20.550 .169 .000** Regression 187.525 1
Residual 921.678
Total 1109.204
101
102
9.126
Model
Regression
Residual
Total
Sum of
Squares
28.873 df
1
334.486 101
363.359 102
Mean
Square
28.873
3.312
F-test
8.718
R
2
.079
Sig.
.004**
Model
Regression
Residual
Total
Sum of
Squares df
72.129 1
373.521 101
445.650 102
Mean
Square F-test R
2
Sig.
72.129 19.504 .162 .000**
3.698
Model
Regression
Residual
Total
Sum of
Squares df
Mean
Square F-test R
2
Sig.
648.221 1 648.221 38.361 .268 .000**
1706.692 101 16.898
2354.913 102

Chapter 4: Results
Findings for Hypothesis 2--Correlations
Transactional
(IV)
Pearson Correlation (Rho)
Caring
(DV)
Significance (2-tailed), p -value .591
N
.054
103
Lawcode
(DV)
Rules
(DV)
.149
.132
103
.152
.125
103
Instrumental
(DV)
.054
.585
103
Independence
(DV)
-.038
.072
103

Chapter 4: Results
Findings for Hypothesis 3--Correlations
Laissez-faire
(IV)
Pearson Correlation (Rho)
Caring
(DV)
Significance (2-tailed), p -value .462
N
Lawcode
(DV)
Rules
(DV)
-.073 -.143 -.237
103
.151
103
.016*
103
Instrumental
(DV)
.247
.012*
103
Independence
(DV)
.010
.919
103

Chapter 4: Results
Findings for Hypothesis 3--ANOVA
Laissez-faire Leadership to
Rules Ethical Climate
Laissez-faire Leadership to
Instrumental Ethical Climate
Model
Regression
Residual
Total
Sum of
Squares df
Mean
Square
24.995 1 24.995
420.655 101 4.165
445.650 102
F-test
6.001
R
2
.056
Sig.
.016*
Model
Sum of
Squares df
Mean
Square F-test
Regression 143.840 1 143.840 6.570
Residual 2211.073 101 21.892
Total 2354.913 102
R
2
.061
Sig.
.012*

Chapter 4: Results
Findings for Hypothesis 4—Correlations
FSGO Understanding
(IV)
Pearson Correlation
N
Caring
(DV)
Lawcode
(DV)
-.002
Significance, (2-tailed), p-value .990
49
.220
.129
49
Rules
(DV)
Instrumental
(DV)
.165
.257
49
-.284
.048*
49
Independence
(DV)
.048
.742
49

Chapter 4: Results
Findings for Hypothesis 5--Correlations
(IV)
REL Religiosity
Pearson Correlation (Rho)
Caring
(DV)
-.091
Significance (2-tailed), p-value .363
N 103
Lawcode
(DV)
-.043
.669
103
Rules
(DV)
Instrumental
(DV)
-.084
.401
103
.021
.831
103
Independence
(DV)
-.110
.268
103

Chapter 4: Results
Cross-sectional Analyses
• To understand the significant interaction between gender
(or with any other demographic independent variable), and transformational leadership
(or any other independent variable), on the caring ethical climate type perception
(or any other dependent variable), the transformational leadership
(or any other independent variable) was grouped into those scoring higher than one standard deviation (+1SD) and those scoring lower than one standard deviation (-1SD) and plotted with gender
(or with any other demographic independent variable).

Chapter 4: Results
Limited Cross-sectional Statistical Analysis
Gender/Transformational Leadership to Caring Ethical Climate
Category D2
(Gender) Frequency
Female (1)
Male (2)
Total
29
74
103
Source
Corrected Model
Intercept
Gender (D2)
Transformational
Gender (D2) *
Transformational
Error
Total
Corrected Total
Type III Sum
Of Squares df
254.542
a
1506.910
59.265
28.464
48.949
854.662 99
63303.000 103
1109.204 102
3
1
1
1
1
Mean Square
84.847
1506.910
59.265
28.464
48.949
8.633
F
9.828
174.553
6.865
3.297
5.670
Sig.
.000
.000
.010
.072
.019*

Chapter 4: Results
Limited Cross-sectional Statistical Analysis
(Cont.)
Service Function/Transformational Leadership to Lawcode Ethical Climate
Category D8
(Service Function)
Assurance (1)
Tax (2)
Total
Frequency
61
35
96
Source
Corrected Model
Intercept
Assurance and Tax (D8)
Transformational
Assurance and Tax (D8) *
Transformational
Error
Total
Corrected Total
Type III Sum
Of Squares df
Mean
Square F Sig.
50.463
a
3 16.821 5.297 .002
1348.360 1 1348.360 424.591 .000
20.225 1 20.225 6.369 .013
14.507 1 14.507
16.339 1
292.162 92
16.339
3.176
30802.000 96
342.625 95
4.568 .035
5.145 .026*

Chapter 4: Results
Limited Cross-sectional Statistical Analysis
(Cont.)
Service Function/Transformational Leadership to Rules Ethical Climate
Category D8
(Service Function)
Assurance (1)
Tax (2)
Total
Frequency
61
35
96
Source
Corrected Model
Intercept
Assurance and Tax (D8)
Transformational
Assurance and Tax (D8) *
Transformational
Error
Total
Corrected Total
Type III Sum
Of Squares df
Mean
Square F Sig.
89.824
a
1069.929
26.019
35.826
23.310
323.165 92
28191.000 96
412.990 95
1
1
3 29.941 8.524 .000
1 1069.929 304.592 .000
1 26.019 7.407 .008
35.826 10.199 .002
23.310 6.636 .012*
3.513

Chapter 4: Results
Limited Cross-sectional Statistical Analysis
(Cont.)
Licensed CPA?/Transformational Leadership to Rules Ethical Climate
Corrected Model
Intercept
CPA? (D9)
Transformational
CPA? (D9) *
Transformational
Error
Total
Corrected Total
Source
Type III Sum
Of Squares
99.567
a
813.263
27.149
91.979
23.876
1
1
1
346.083 99 df
Mean
Square F Sig.
3 33.189 9.494 .000
1 813.263 232.641 .000
27.149
23.876
3.496
7.766 .006
91.979 26.311 .000
6.830 .010**
30009.000 103
445.650 102

Chapter 4: Results
Limited Cross-sectional Statistical Analysis
(Cont.)
Firm Size/Transformational Leadership to Lawcode Ethical Climate
Category D11
(Firm Size)
Regional
Local, large 25+
Local, small
Total
Frequency
32
50
20
102
Source
Corrected Model
Intercept
Firm Size (D11)
Transformational
Firm Size (D11) *
Transformational
Error
Total
Corrected Total
Type III Sum
Of Squares df
69.601
a
147.678
6.100
23.938
13.106 1
293.758 99
33269.000 103
3
1
1
1
363.359 102
Mean
Square F
23.200 7.819
147.678 49.769
6.100
23.938
2.056
8.067
13.106
2.967
4.417
Sig.
.000
.000
.155
.005
.038*

Chapter 4: Results
Limited Cross-sectional Statistical Analysis
(Cont.)
Licensed CPA?/Transactional Leadership to Rules Ethical Climate
Source
Corrected Model
Intercept
Transactional
CPA? (D9)
CPA? (D9) *
Transactional
Error
Total
Corrected Total
Type III Sum
Of Squares df
Mean
Square F
32.366
a
684.151
19.079
20.518 1
17.359 1
413.284 99
3 10.789 2.584
1 684.151 163.885
1 19.079 4.570
20.518
17.359
4.175
4.915
4.158
30009.000 103
445.650 102
Sig.
.058
.000
.035
.029
.044*

Chapter 4: Results
Limited Cross-sectional Statistical Analysis
(Cont.)
Years with Firm/Lassiez-faire Leadership to Lawcode Ethical Climate
Category D7
(Years with firm)
0 – 2
3 – 4
5 – 10
10+ years
Total
Frequency
18
27
32
26
103
Source
Corrected Model
Intercept
LFL
Time with Firm (D7)
Time with Firm (D7) *
LFL
Error
Total
Corrected Total
Type III Sum
Of Squares
66.219
a
5937.012
4.082
40.450
38.792
1
3
3
297.141 95
33269.000 103
363.359 102 df
Mean
Square F Sig.
7 9.460 3.024 .006
1 5937.012 1898.146 .000
4.082
13.483
12.931
3.128
1.305 .256
4.311 .007
4.134 .008**

Chapter 4: Results
Post Hoc Power and Effect Size Analysis
Post Hoc Power and Effect Size Analysis
Hypothesis Alpha P-value df
Post
Hoc
Power
(eta 2 )
Effect
Size
H1, Transformational to Caring
H1, Transformation to Lawcode
H1, Transformation to Rules
H1, Transformation to Instrumental
H3, Laissez-faire to Rules
H3, Laissez-faire to Instrumental
H4, Understanding FSGO to Instrumental
.05
.05
.05
.05
.05
.05
.05
.000** 102
.004* 102
.000** 102
.000** 102
.016* 102
.012* 102
.048* 48
.71
.73
.51
.92
.86
.93
.93
.18
.17
.33
.53
.54
.56
.56

Chapter 4: Results
Summary
(Cont.)
•
(ethical climate perception) and independent variables
(perceived focal leader’s leadership style), the findings:
– show a statistically significant relationship between transformational leadership and four ethical climate type
perceptions (i.e., caring, lawcode, rules, and instrumental).
– demonstrate no statistically significant relationship between transactional leadership and all five of the ethical climate type perceptions.
– reveal that laissez-faire leadership exhibits a statistically
significant, although weak negative correlative influence on the rules ethical climate type perception and a statistically
positive correlative influence on the instrumental ethical climate type perceptions.

Chapter 4: Results
Summary (Cont.)
• With regard to this study’s theoretical framework’s proposed
moderating or intervening variables, the survey respondents’
understanding of the Federal Sentencing Guidelines for
Organizations (FSGO) recommendations and the survey respondents’ religiosity, the following finding were observed:
– respondents’ understanding the Federal Sentencing Guidelines for
Organizations’ (FSGO) recommendations has a slightly negative correlative relationship with the instrumental ethical climate type perception.
– there was no statistically significant relationship between the moderating variable of understanding the FSGO recommendations to any leadership style.
– religiosity showed no statistical correlative relationship with any
ethical climate type. Additionally, no statistical correlative relationship exists between the moderating variable of religiosity and any leadership style.

Chapter 5: Conclusions and Recommendations
Frequency Means of Leadership Recognized
Frequency Means of Leadership Style Recognized
Leadership Style Mean Std. Dev.
Transformational
Transactional
Laissez-faire
2.53
1.89
1.31
0.626
0.369
0.647
MLQ Frequency Key: 0.0 = Not at all, 1.0 – Once in a while,
2.0 = Sometimes, 3.0 = Fairly often, and 4.0 = Frequently, if not always

Chapter 5: Conclusions and Recommendations
Research Question 1
• To what degree do partners, managers, and supervisors’ various leadership styles affect the subordinate’s perception of what are ethical expectations and behaviors to be followed?

Chapter 5: Conclusions and Recommendations
Transformational Leadership’s Effect
• Transformation leadership influence subordinates to become aware of what is important to the accounting firm, such as performance expectations, as well as convinces subordinates to higher levels of moral and ethical standards
(Antonakis and House, 2002;
MLQ, 1995; MLQ, 2004)
• Analysis of descriptive statistics, such as, means and standard deviations of the three major leadership characteristics or styles reveal that transformational leadership was the most
often leadership style recognized.

Chapter 5: Conclusions and Recommendations
Transformational Leadership’s to Caring
(Cont.)
Table 61
Leadership’s Impact on Recognition of the Caring Ethical Climate
Leadership Style
Transformational
Transactional
Laissez-faire
Rho
.411
.054
-.073
Sig. N
.000** 103
.591
.462
103
103
**. P-value, correlation is significant at the .01 level (2-tailed).
• Professionals working in a recognized caring ethical climate are concerned with being
considerate toward others, focus on team play, and considerate of constituents outside the
organization. Accounting professionals operating in a caring ethical climate are concerned about social responsibilities.
• The AICPA principles of professional conduct mandate that the “public interest” subordinate all personal and firm interest. Complying with social responsibilities and expectations of ethical conduct is very beneficial to the ethical, as well as, legal sustainability of the accounting firm.
• Transformational leadership had the only statistically significant relationship with the
caring ethical climate. Transactional and laissezfaire leadership style does not engender a loyalty derived from leader caring and support or does not encourage concern for the public interest.

Chapter 5: Conclusions and Recommendations
Transformational Leadership’s to Caring
(Cont.)
Transformational
Leadership Style
Scale
Scale Definition
The leader . . .
An Example of How a Utah Accounting Firm
Leader Could Employ Transformational
Behavior
Idealized Attributes Instills pride in others for being associated with the leader
At the onset, during, and the end of an engagement activity, let your subordinate know how appreciative you are in leading an engagement activity with the subordinate and that both should grow from the experience
Goes beyond self-interest for the good of the group
Always show personal interest in the subordinate’s success by selflessly helping and advising work efficiencies in a timely manner
Acts in ways that build others’ respect for the leader
Always act respectfully of others, at all times, and always show respect to and about the subordinate when interacting with clients or colleagues
Displays a sense of power and confidence
At an appropriate time, discuss a sense of responsibility and loyalty to the accounting firm and confidence about the engagement’s successful completion and purpose

Chapter 5: Conclusions and Recommendations
Transformational Leadership’s to Caring
(Cont.)
An Example of How a Utah Accounting Firm Leader
Could Employ Transformational Behavior Transformational
Leadership Style Scale
Scale Definition
The leader . . .
Idealized Behaviors Talks about the most important values and beliefs
During engagement activities’ reflective opportunities
(i.e, during meals, reviewing subordinates’ work, discussing client difficulties) share personal companyrelated, professional-related, or personal-related values and beliefs
Specifies the importance of having a strong sense of purpose
At appropriate times, express the importance of the professional accounting profession’s responsibility to the public’s interest and how the firm’s services add to client efficiencies, compliance, and sustainability
Considers the moral and ethical consequences of decisions
At appropriate times, share your moral/ethical/legal decision-making processes, compliant with the accounting firm and or profession’s recommended decision-making practices
Emphasizes the importance of having a collective sense of mission
At the onset of an engagement activity, speak of the importance of team cohesion, problem-solving agreement, and efficient and effectively completion of the engagement activity

Chapter 5: Conclusions and Recommendations
Transformational Leadership’s to Caring
(Cont.)
Transformational
Leadership Style Scale
Scale Definition
The leader . . .
An Example of How a Utah Accounting Firm
Leader Could Employ Transformational
Behavior
Inspirational Motivation Talks optimistically about the future
When discussion allows, speak positively about the accounting firm’s future growth opportunities and leadership opportunities for the subordinate
Talks enthusiastically about what needs to be accomplished
During each engagement, be enthusiastic about the engagement’s objectives and work tasks to be completed by all involved
Articulates a compelling vision of the future
When occasion arises, communicate the strategic goals and objectives of the accounting firm and how the subordinate fits into the future success of the accounting firm
Expresses confidence that goals will be achieved
At the onset of the engagement, express the potential work task difficulties and how the leader and subordinate will work together to complete the engagement successfully

Chapter 5: Conclusions and Recommendations
Transformational Leadership’s to Caring
(Cont.)
An Example of How a Utah Accounting Firm Leader
Could Employ Transformational Behavior Transformational
Leadership Style Scale
Scale Definition
The leader . . .
Intellectual Stimulation Re-examines critical assumptions to question whether they are appropriate
With each engagement, coach the subordinate about how the engagement procedures can be more efficiently performed, how worksheets should be organized and designed to evidence procedures have been properly performed, and how improvements from the prior engagement can be employed
Seeks differing perspectives when solving problems
Always seek subordinate input for solving client engagement problems that arise
Gets others to look at problems from many different angles
Coach the subordinate about how to solve client dilemmas, resolve accounting or tax measurement problems, or use current professional literature to bring another perspective to solving engagement difficulties
Suggests new ways of looking at how to complete assignments
At the onset of the engagement, coach the subordinate about how up-line leaders might have changed or reasons for not changing the engagement approach

Chapter 5: Conclusions and Recommendations
Transformational Leadership’s to Caring
(Cont.)
An Example of How a Utah Accounting Firm Leader
Could Employ Transformational Behavior Transformational
Leadership Style Scale
Scale Definition
The leader . . .
Idealized Consideration Spends time teaching and coaching
During the whole engagement, the leader should selflessly coach the subordinate how to improve the craft of performing the required engagement procedures
Treats others as individuals rather than just as a member of the group
Learn about your subordinate before commencing the engagement. Learn his/her name, family circumstances or status, interests, and past performance with an objective of helping the subordinate to improve is KSAs (i.e., knowledge, skills, and abilities)
Considers each individual as having different needs, abilities, and aspirations from others
Learn about the subordinate’s needs, abilities, and aspirations to better coach his/her “career equity,” so as to assist the subordinate in their desired career path
Helps others to develop their strengths
During the engagement and at the end, assist the subordinate in developing their strengths with during-the-engagement work practice recommendations and a meaningful performance evaluation

Chapter 5: Conclusions and Recommendations
Transformational Leadership’s to Lawcode
Table 63
Leadership’s Impact on Recognition of the Lawcode Ethical Climate
Leadership Style
Transformational
Transactional
Laissez-faire
Rho
.282 .004** 103
.149
-.143
Sig.
.132
.151
N
103
103
**. P-value, correlation is significant at the .01 level (2-tailed).
•
• Transformational leadership has the highest positive correlative
effect on subordinates recognizing the lawcode ethical climate.
Accounting firms would prefer their leaders to demonstrate transformation leadership, more often than not, simply to encourage firm-wide compliance with laws, regulations, and professional practice standards.
While performing univariate analysis of variances between the demographic subject factors of who practice assurance services and tax service, an interesting phenomenon arose. Those firm personnel not only are influenced by transformational leadership and practicing tax services but also experience a stronger perception of the lawcode ethical climate than those in the firm practicing assurance services.
Perhaps the tax personnel are more sensitive to the lawcode ethical climate because of their required understanding of voluminous tax
law’s authoritative sources (i.e., legislative tax law, administrative tax law, and judicial tax law). Also, tax professionals must also be aware of the generally accepted accounting principles (GAAP)

Chapter 5: Conclusions and Recommendations
Transformational Leadership’s to Rules
• From Table 64, it can be seen that transformational leadership has the only variable that shows statistically significant and highest correlative
relationship to the rules ethical climate.
Table 64
Leadership’s Impact on Recognition of the
Rules Ethical Climate
Leadership Style Rho Sig.
Transformational
Transactional
Laissez-faire
.402
.152
-.237
.000**
.125
.016*
N
103
103
103
*. P-value, correlation is significant at the .05 level (2-tailed).
**. P-value, correlation is significant at the .01 level (2-tailed).
• Also, Utah CPA firms should be aware that CPA licensed personnel, while
influenced by transformational leadership, recognize a higher level of
rules ethical climate type than those not having earned their CPA licensure.
• Perhaps this phenomenon arises from the stronger appreciation of quality control compliance requirements with firm rules, policies, and
procedures protocol for maintaining licensure and practice permission
from peer quality reviews. Additionally, personnel from larger CPA firms, while influenced by transformational leadership perceived a higher level of the rules ethical climate, than those personnel from smaller CPA firms.
This phenomenon may exist because larger CPA firms are perhaps performing more high-level assurance and tax services engagements, requiring greater understanding and compliance with in-firm policies,
procedures, and practices, such as, for those collaborative intra-office procedures for multi-city client engagements. Personnel from larger CPA firms would necessarily be more sensitive to complying with intracompany policies, procedures, and practices.

Chapter 5: Conclusions and Recommendations
Transformational Leadership’s to Instrumental
• Because transformational leadership suppresses the recognition of this
individual- and company-egoistic position, as evidence by the negative
correlative relationship, transformational leadership is important in lifting the subordinates’ conduct to higher levels of ethical preferences.
Table 65
Leadership’s Impact on Recognition of the
Instrumental Ethical Climate
Leadership Style Rho Sig. N
Transformational
Transactional
-.525
.054
.000** 103
.585 103
Laissez-faire .247 .012* 103
*. P-value, correlation is significant at the .05 level (2-tailed).
**. P-value, correlation is significant at the .01 level (2-tailed).
• Laissez-fair leadership also had a statistically significant and positively
correlated relationship with this deleterious instrumental leadership style.
Accounting firms have strong reporting, review, and follow-up policies. These procedures help ensure that auditing and tax engagement procedures are performed, evidence is properly assessed, and that the conclusion by the subordinate accounting professional are reasonable under the circumstances.
Utah’s public accounting leaders demonstrate very low level of the laissez-faire leadership style. Utah’s public accounting leaders leadership practices support that which has been found in other nation-wide accounting leadership research, that transformational and transactional leadership is widely prevalent (Early and Davenport, 2010).

Chapter 5: Conclusions and Recommendations
Transformational Leadership’s to Independence
Table 66
Leadership’s Impact on Recognition of the
Independence Ethical Climate
Leadership Style Rho Sig.
.349 Transformational
Transactional
Laissez-faire
.093
-.038
.010
.072
.919
N
103
103
103
• Professional accounting subordinates working in an independence ethical climate type are left to their own personal and moral beliefs driving their ethical
behavior. Leaving the accounting professional to their own beliefs of right and wrong and demonstrating their own personal ethics, regardless of rules, laws, regulations, and firm policies and procedures is problematic.
• If the subordinates’ personal beliefs of right and wrong differ from the principles
of the AICPA Code of Professional Conduct’s regard for the public interest, deviate from promulgated professional standards, dismiss firm policies and procedures, injurious ramifications are more likely to result from engagement activities.
When subordinate accounting professionals are left alone to exercise professional judgment, the independence climate type is not sufficient to protect the
accounting firm, if the personal philosophy, moral compass, and regard for established standards and conduct are different with the accounting subordinate.
Next, the interpretations, conclusions, and recommendations for transactional leadership follow.

Chapter 5: Conclusions and Recommendations
Transactional Leadership’s to Ethical Climates
Table 67
Transactional Leadership Impact on All Ethical
Climate Types
Ethical Climate Type Rho Sig. N
.591 103 Caring
Lawcode
Rules
Instrumental
Independence
.054
.149
.152
.054
-.038
.132
.072
103
.125 103
.585 103
103
• In Utah’s local-small, local-large, and regionally sized CPA firms, transactional leadership does not lend itself to having subordinates recognize any particular
ethical climate type. Transactional leadership is not necessarily bad; however, in
Utah public accounting, too much transactional leadership could retard subordinates to not be more fully aware of preferred ethical climate types. Ethical behavior is better remembered when reminded through perceiving a preferred
ethical climate (i.e., caring, lawcode, or rules). In Utah’s public accounting profession, higher-level leadership (i.e., inclining toward transformational leadership) helps keep professional accounting subordinates compliant with Code of Conduct expectations, quality control policies and procedures, firm-wide ethical policies and procedures, and professional practice standards. The preferred ethical perceptions also help the professional accountant remember and be sensitive toward the overarching mandated philosophy that the public’s interest fundamentally guides our ethical actions.

Chapter 5: Conclusions and Recommendations
Transactional Leadership to Higher Leadership Form

Chapter 5: Conclusions and Recommendations
Laissez-faire Leadership
Laissez-faire Leadership Impact on All Ethical
Climate Types
Ethical Climate Type
Caring
Rho Sig. N
-.073 .462 103
Lawcode
Rules
Instrumental
Independence
-.143 .151 103
-.237 .016* 103
.247 .012* 103
.010 .919 103
• While Utah accounting leaders, in local-small, local-large, and regionally-sized
CPA firms, exhibit laissez-faire leadership, subordinates’ perceive less of the rules ethical climate type. Too much laissez-faire leadership could lead subordinates to be reckless regarding compliance with rules, standards, and or ethical expectations. Additionally, laissez-faire leadership moves in the same direction as instrumental ethical climate perception. The more a focal leader exhibits laissez-faire leadership, the higher the probability of observing more instrumental ethical climate is recognized. The subordinate may well believe that self-interests and company-interests are more important factors in making ethical decisions. Utah CPA firms would do well to avoid subordinates’ from moving away from caring about the public’s interests in ethical decision-making, by avoiding laissez-faire leadership style.

Chapter 5: Conclusions and Recommendations
Summary—Research Question 1
• Utah’s accounting firms do well by having their subordinates more often identify their focal leaders with
transformational leadership near more fairly often, followed by near sometimes transactional leadership, and last with near once in a while laissez-faire leadership. Improving transformation leadership, through
continuous leadership training and evaluating leaders for their consistency in exhibiting transformational leadership behaviors and patterns, as recommended in Table 62 (Transformational Building Actions and
Behaviors), is strongly suggested. Perceive the preferred caring, lawcode and rules ethical climates types.
• Unfortunately, even if Utah CPA firms have ethical expectations for their professional subordinates,
transactional leadership does not persuade subordinates to recognize, to any statistical significance, the
preferred ethical climate types. When Utah’s public accounting leaders exhibit transactional leadership, not much will drive subordinates to recognizing the preferred ethical climate types. Transactional leadership will persist in public accounting practice, by the sheer nature of its deadline-oriented, time constrained, standards and regulatory-compliance rigor, and precise reporting engagement activities.
• Last, Utah CPA firms should eradicate any laissez-faire leadership tendencies that arise with any level of
the firm’s leadership structure. Laissez-faire leadership can put Utah CPA firms at risk of ethical failure.
Identifying whether subordinates’ perceive laissez-faire leadership form their local leaders can only be detected by upward evaluations or anecdotal observations by other leaders. Subordinates are loath to report poor leadership of their focal leaders, so formal upward evaluations should be performed on an anonymous basis. When focal leaders are found to be exhibiting laissez-faire leadership, corrective intervention training should occur.

Chapter 5: Conclusions and Recommendations
Research Question 2
• To what degree does the subordinate’s knowledge of regulatory influence affect the subordinate’s perception of the ethical climate and the focal leader’s leadership?

Chapter 5: Conclusions and Recommendations
FSGO Regulations Effect on Ethical Climates

Chapter 5: Conclusions and Recommendations
FSGO Regulations Effect on Ethical Climates
• Instrumental leadership style places the leader’s self-interest above others, depicts leaders the company mostly out for themselves, disallows room for personal morality, accepts substandard work product, so along as the company is not harmed.
• Basically, instrumental leadership is antithetical to the objectives of the Federal
Sentencing Guidelines for Organizations. When Utah accounting professionals are aware of regulatory requirements, they recognize less of the instrumental ethical climate type.
• The instrumental ethical climate type is perhaps the worst ethical climate type that a CPA firm would hope exists among the perceptions of their professional
subordinates.
• Instrumental ethical climate’s self-interest could lead toward dangerously careless attitudes regarding professional standards and regulatory requirements. Such disregard of standards and regulations could lead to professional error,
negligence, or inclinations toward fraud.

Chapter 5: Conclusions and Recommendations
Research Question 3
• To what degree does the subordinate’s religiosity or compassionate service affect the subordinate’s perception of the ethical climate and the focal leader’s leadership?

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

Chapter 5: Conclusions and Recommendations
Religiosity’s Effect on Ethical Climates
• One would anticipate that high religiosity and compassionate service activity would positively correlate with the caring ethical, and perhaps the lawcode and independence ethical climate types. This assumption was based on the notion that philosophy and religion are closely aligned with ethic’s theories and models of ethical behavior.
• Because the survey respondents virtually all answered weekly church activity and weekly to monthly compassionate service activity, there could exists a “ceiling effect” that makes correlation analyses more difficult to associate among the differing ethical climate type perceptions and leadership styles.
• There could be a serious range restriction found in the religiosity scale or the properties of the sample respondents
(i.e., all highly religious) spoiled the desired variability of responses over the possible scale responses
(Schmidt 2012).
• This correlation analysis perhaps required larger and more distributed religiosity response samples over the possible responses to show correlative association with multiple dependent variables. The distribution statistics for the religiosity scale is shown to the left.

Chapter 5: Conclusions and Recommendations
Religiosity’s Effect on Ethical Climates
• As can be seen, the sample is positively skewed to the left and tails sharply to the right. Apparently, either the measuring instrument was not sufficiently constructed to differentiate on one side of the measuring scale or the sample size was not sufficiently large to possess differentiation among respondents.
• Utah is a highly religious state, with many members of the Church of Jesus Christ of Latter-day Saints, who are unique as a religious group in that the active members are strongly engaged with religious and compassionate services
(Cnaan, Evans, & Curtis, 2012)

Chapter 5: Conclusions and Recommendations
Limitations, Improvements, & Suggestions
•
–
• Future research, of this sort, should seek to obtain larger sample sizes. Academic researchers need to somehow break down the barrier of fear and suspicion, exacerbated in our litigious society, between academic researchers and owners and legal counsel of national and international firms. Perhaps more
collaborative research, with in-firm corporate research specialists and academics, where greater trust could be built and control over findings can be contractually and amicably handled could be a way in.
–
• Because this web-based research study was rather lengthy and required all four surveys, plus a robust demographic section to be filled out, the researcher is not aware of how many partially-completed surveys
were electronically abandoned. Partially-completed surveys were not electronically submitted, and thus, examination for sample bias by comparing full survey respondents’ answers with known incomplete respondents’ answers was not possible. Future research could perhaps, if collaboratively linked with corporate researchers, be present at the various firms’ and help personally administer the survey and obtain a higher with-in firm response rate.

Chapter 5: Conclusions and Recommendations
Limitations, Improvements, & Suggestions
– Statistical Inferences and Theoretical Construct
Development
• This study took a quantitative approach with a correlation design. Relationships between the variables were described as to their movement with respect to each other and their strength of statistical relationship to each other. By no means are these findings causative. However, the
conceptual design of this study’s theoretical model is strongly supported by logic. A person’s moral development, immediate supervisor’s leadership style, known company understanding for the regulatory and professional conduct standards, and religiosity would seem to influence their perception of their prescribed ethical inclinations and conduct.
• Inference limitation relates to the lack of variability in the survey respondents’ answers for describing
their religiousness. Virtually all survey respondents’ classified themselves as weekly churchgoers and or providing compassionate service to others. Perhaps the religiosity’s construct validity is not adequately defined. This study’s religiosity definition was not as well defined to represent the underlying true population’s perceptions regarding religious salience. Or possibly, the lack of variability about their religiousness could have created a “ceiling” effect and skewed the responses for correlation analysis. This phenomenon, in which 89 of the 103 survey respondents identified themselves as rather highly religious could also tainted the overall findings, if only religious professional accounting staff felt inclined to complete the survey. In the future, perhaps a religiosity survey (i.e., religious identity, religious salience, and religious conviction) is not warranted, but rather a survey of servant-style and compassionate-service attributes could be used to correlate such attributes with influence on ethical work climate perceptions.

Chapter 5: Conclusions and Recommendations
Limitations, Improvements, & Suggestions
•
–
• The independent variable, transactional leadership style, produced non-statistical results, with respect to the impact of the subordinate’s perception of their ethical workplace climate. However, upon deeper correlation analysis and ANOVA analysis, accepted leadership subscales of contingent reward and management-by-
exception active had statistical correlation and significance. Transactional leadership has, in previous research, been problematic in accounting profession research.
• In the future, perhaps some exploratory qualitative research can better understanding how transactional leadership style’s subscales of contingent reward, management-by-exception—passive, and management-by-
exception—active, is present and utilized in the public accounting profession. Then a better quantitative research conceptual model could be posited.

Chapter 5: Conclusions and Recommendations
Limitations, Improvements, & Suggestions
•
• First, with appropriate corrections for the ECQ Survey instrument, this study can be replicated in other professional public accounting jurisdictions. The accumulation of future replications can add to the aggregating of a larger, robust sample, perhaps leading to a meta-analysis.
• Second, better religiosity construct development can be pursued.
• Third, further research opportunities. For example,
– why in Utah do women’s employment percentages nearly shrink in half, over time?
– Why do men represent a higher percentage in the accounting profession’s senior positions?
– What are the social factors creating a “glass ceiling” effect in Utah’s public accounting profession?
– Why does the public accounting profession continue to appear unattractive to minority persons?
• Fourth, can better process-based management philosophies, with leadership training interventions, further bend the Utah public accounting leadership culture more toward transformational
leadership, less towards transactional, and the eradication of laissez-faire leadership?
• Fifth, could accounting firms that improve their transformational leadership practices,
– heighten the subordinates’ perception to the more preferred ethical climate types (i.e., caring, lawcode, and rules) ?
– earn higher employee satisfaction, experience less professional staff turnover, and increase profitability?

Provided in the separate chapter PowerPoint presentations