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PurposeThis paper aims to examine the effect of managerial ability (MA) on real earnings management and the effect of real earnings management by higher ability managers on future profitability, at a different level of the crime rate.Design/methodology/approachThe research sample includes 864 manufacturing firms-years listed on the Indonesian Stock Exchange. MA uses an efficiency score by data envelopment analysis. Real earnings management is measured by abnormal activities. The crime rate is measured by logarithm natural of the number of crimes per 100.000 citizens in the region where the firm is headquartered. Data analysis uses fixed-effect regression.FindingsMA increases real earnings management in the region where the firm is headquartered with a higher crime rate while MA will reduce real earnings management in the region where the firm is headquartered with a lower crime rate. Also, real earnings management by higher-ability managers gives a signal of better future profitability in the region where the firm is headquartered with a lower crime rate.Originality/valueThis research contributes to filling the previous gap of managerial characteristics ability-related on real earnings management by providing regional crime rate as a determinant factor of managers’ ethical behavior. This research is the first one to considers the regional crime rate treatment to the relationship between MA and real earnings management especially in Indonesia. This research also provides new evidence of efficient real earnings management for a lower crime rate group of samples to give a signal of better future profitability.

In an organization or company, fraud is usually discovered by people within the organization. The existence of evidence of fraud, whether strong or weak, sometimes does not make people who know the fraud report to the authorities. The purpose of this study was to determine the effect of the bystander effect, whistleblowing, and ethical behavior on financial statement fraud. The method used is a quantitative method. The population in this study were all Bekasi District Civil Servants who served in the financial division of each agency. This study uses primary data from a questionnaire. The data were analyzed using multiple regression analysis. The results of this study indicate that the bystander effect has a positive effect on Financial Statement Fraud, while the whistleblowing variable and eris behavior have a negative effect on Financial Statement Fraud.

The importance of ethical behavior in consumers has never been so evident, and in recent years, researchers have generated a great deal of knowledge about ethical consumption. The search for happiness in consumption has been a recurrent line of research by academics of the management and, mainly, the marketing fields. Our study analyses the relationship between ethical and sustainable behavior in consumption and the achievement of consumer happiness. Employing structural equations, the findings of the study suggest that there is a positive relationship between consumers’ predisposition toward sustainable behavior and happiness. In addition, the findings indicate that, when there are reasons to justify unethical behavior in consumption, the consumer also manages to be happier. Important implications for theory and practice are derived from the results. Emphasizing the benefits of sustainable consumption for enhancing happiness might instigate sustainable consumption, especially in the case of those consumers who do not have a positive attitude toward sustainable consumption.

In this study, the researchers investigated the relationships between character strengths and ethical engagement in online faculty. One of the ethical duties for higher education faculty is to engage in effective teaching practices. As online higher education becomes increasingly popular, online faculty also bear this duty. Numerous studies have shown that character strengths cultivate ethical behavior. Hence, we sought to determine the relationship between character strengths and ethical engagement in online faculty. Specifically, we focused on intellectual character strengths, interpersonal character strengths, and emotional character strengths because of their relevance to online faculty's teaching practices. Through correlational analyses, we learned that interpersonal and emotional character strengths were positively and moderately related to ethical engagement, whereas intellectual character strengths were weakly related to ethical engagement. The findings of this study provide insight into online faculty's character strengths and ethical engagement. However, further research is needed to understand the role of character strengths and ethical engagement in promoting effective teaching practices in online higher education classrooms.

Purpose This paper aims to examine the effect of the corporate ethical approach on the cost of equity capital. This study is conducted on a large international sample on behalf of the world’s most engaged firms from an ethical point of view in 2015. Design/methodology/approach The multivariate linear regression model is used to meet the purpose of this study and research hypotheses are also examined using a sample of 80 of most ethical firms in the world during the year 2015. Moreover, three variables (i.e. business ethics, corporate social responsibility and executive compensation based on the achievement of sustainable development goals) are used to reflect the corporate ethical approach and the implied cost of equity capital is used for estimating the cost of equity. In this regard, equity cost estimation is the most appropriate approach to test the effect of business ethics on the cost of financing firms. Findings Based on a sample of 80 firms emerging as the world’s most ethical firms in 2015, the results revealed that firms with better ethics scores are significantly associated with a reduced cost of equity capital. This paper also demonstrates that the executive incentive pays that are based on the objectives of sustainable development are able to explain different outcomes regarding the relation between corporate ethical behaviors and the cost of equity. These findings support arguments in the literature that firms with socially responsible practices have a higher valuation and lower risk. Originality/value This study provides implications for global regulators and policymakers when setting social reporting standards, suggesting that corporate ethical engagement reduces the cost of equity capital by decreasing the information asymmetry and thereby reducing the firms’ risk. Therefore, the findings may be informative to international managers and investors when considering the effect of business ethics on the firm’s ex-ante cost of equity. In this perspective, the voluntary disclosure of information makes it possible to mitigate the problems of asymmetry of information and conflict of interest between the firm and its main providers of capital, which could reduce the cost of equity.

Ethical behavior has been a topic of increasing research interest, but only a few studies have examined ethical decision-making through a holistic consideration of ethical consumption. In this paper, we empirically establish the relationship between consumers’ ethical sensitivity (CES), ethical judgment and ethical consumption behaviors (ECB). We also examine the mediating and moderating role of internal locus of control (iLOC) in these relationships, a key factor that could explain individuals’ behaviors but has never been explored through a holistic approach to ethical consumption behavior. Based on data from 684 consumers and a structural equation model, our findings empirically support part of the Hunt-Vitell and Kotler-Zaltman theories, i.e., CES has a direct and positive effect on both ethical judgment and ECB, and ethical judgment positively impacts ECB. Moreover, while iLOC mediates the relationship between CES and ECB, its moderating role is significant only in the relationship between ethical judgment and ECB. This contributes to a better understanding of consumer ethics, with several implications for ethical brand management, at the same time opening up new research avenues for further investigation.

PURPOSE: This research was done to 1). Explain the influence of ethical behavior on customer trust and loyalty. 2) Explain the influence of ethical behavior on customer commitment and loyalty. 3) Analyze the influence of ethical behavior on customer trust and commitment. DESIGN/METHODOLOGY: This research was done using well-structured and comprehensive procedures to examine the relationship among variables in order to obtain valid answers for the research questions. An explanatory design in the form of survey was employed to describe and investigate the relevant phenomena and factual information. FINDINGS: The conclusions of this research are drawn as follows. 1) Ethical behavior has a significant positive influence on trust. This means that the ethical behavior of employees in providing services to customers increases customer trust. 2) Ethical behavior has a positive and insignificant influence on commitment. This implies that ethical behavior shown by employees is not yet able to improve customer commitment. 3) Ethical behavior has a negative and insignificant influence on loyalty. Therefore, ethical behavior does not have any significant role in increasing customer loyalty. 4) Trust has a significant positive effect on customer commitment. This implies that customer trust plays an important role in increasing the commitment of customers. 5) Trust has a significant positive influence on customer loyalty. Thus, stronger trust supports stronger customer loyalty. 6) Commitment has a significant positive influence on loyalty. This implies that the customer’s commitment upon their perception of services provided by employees is able to increase customer loyalty. ORIGINALITY: The population of this study included all Bank customers in Denpasar City. Samples were selected using a purposive sampling method to select samples based on certain specific objectives. Only customers who had completed their transaction at the Bank could be selected as the samples.

This research aimed to obtain the information and empirical evidence on the moderation effect of religiosity on the effect of moral equity to auditor ethical behavior. This research was conducted at the Public Accountant in East Java. This research uses primary data to obtain vital information from respondents using saturated sampling method. Respondents of this study were 102 auditors who work at the Public Accountant in East Java. This study uses a causality analysis Structural Equation Model (SEM) based component or variance or with the model name of Partial Least Square (PLS). Hypothesis testing will be done with the help of software WarpPLS 5.0. The results of this research indicate that religiosity is proved to have significant positive effect on the effect of moral equity to auditor ethical behavior. This finding can be useful for an auditor to be able to understand that there are several factors which can influence and strengthen ethical behavior.

This study aims to examine the effect of Machiavellian, equity sensitivity, ethical sensitivity on the ethical perceptions of accounting students in perceiving the ethical behavior of accountants. The sampling method that used is proportional sampling. The participants of this study are S1/ D4 students from accounting study program in the level of 2016 at the State Universities (PTN) and the Private Universities (PTS) accredited A in Malang. The samples of this study were 381 accounting students from eight universities. The data analysis that used in this study is multiple linear regression. The results showed that Machiavellian had a positive effect on the accounting students' ethical perceptions of the accountant's ethical behavior, equity sensitivity had no effect on the accounting students' perceptions of the accountant's ethical behavior, and ethical sensitivity had a positive effect on the accounting students' ethical perceptions of the accountant's ethical behavior.

PurposeThe purpose of this paper is to examine the impact of self-other rating agreement (SOA) on ethical decisions and behavior.Design/methodology/approachA sample of 169 students (60 women and 109 men) enrolled in a part-time, regional MBA program was divided into three SOA categories: (1) Self-aware, individuals whose self-ratings matched observer ratings, (2) Underraters, those whose self-ratings were lower than observer ratings and (3) Overraters, individuals whose self-ratings were higher than other ratings. Ethical behavior was evaluated with the completion of a managerial in-basket assessment.FindingsThe results revealed that ethical behavior varied by SOA, with underraters exhibiting the highest levels of ethical behavior, followed by self-aware (i.e. accurate) and then overraters. One of the intriguing results is that underraters displayed more ethical behaviors than accurate raters, raising questions about the use of accurate self-assessments as an indicator of personal and professional effectiveness.Originality/valueThe results indicate that organizations should consider SOA in their human resource processes because it has important implications for employee training, selection and promotion. While prior research has examined the effect of SOA on performance, commitment and leadership perceptions, the authors contribute to the literature by examining whether SOA influences actual ethical decisions and actions.

PurposeThis paper aims to examine the association between the strength of auditing and reporting standards (SARS, hereafter) and sustainability and investigates whether ethical behavior of firms moderates relationship between SARS and sustainability.Design/methodology/approachThe sample consists of 500 country-year observations over the period of 2014–2017. Sustainability is collected from the Global Sustainable Competitiveness Index Reports for 2014, 2015, 2016 and 2017, while SARS and ethical behaviors are collected from the Global Competitiveness Reports for the same years.FindingsThe findings of this study suggest that the SARS is associated with sustainability. Similarly, ethical behavior of firms has a positive and significant effect on sustainability. When testing for the moderating effect of ethical behavior of firms on the association between SARS and sustainability, the results show that the positive association SARS becomes positive and more significant for countries where firms operate with high ethical behaviors, while the association becomes insignificant for settings where firms operate with low ethical behaviors.Originality/valueThe findings emphasize the role played by SARS and business ethics in improving sustainability. These results may have policy implications for governments aiming to improve sustainability by strengthening auditing and reporting standards and enforcing laws obliging firms to act ethically.

Purpose In this paper, the author sought to explain why ethical behavior is the antidote to toxic workplace culture at a time where employees are forced to take their complaints through external channels when internal procedures fall short. Design/methodology/approach The author draws upon recent discussions around employer responsibilities in the wake of #MeToo and the Black Lives Matter movements, using relevant case studies to outline where employers have failed to offer adequate protection for their employees. Findings The author found that by promoting a healthy speak-up culture within the workplace, employees are more likely to feel that their concerns are heard, and the issues can be dealt with internally, to the benefit of both individuals and their organizations. Originality/value HR departments will be able to access the merits of shifting workplace culture to a more transparent model that bridges the trust gap between employees and their organizations.

Digital piracy of DVDs, software, and music is a prevalent behavior worldwide and has significant financial and social costs for society. Yet legal remedies and technological ways of controlling digital piracy are expensive and often do not work. To address a need for study of moral reasoning in digital piracy decisions, we develop and test a model of moral behavior that relies on self-control. Two kinds of shame are examined in separate experiments: indirect shame, where a shamed person overhears a friend condemning digital piracy but the friend is unware that the person overhearing the criticism has in fact committed digital piracy, and direct shame where a person becomes aware that his or her friend has in fact committed digital piracy and reprimands him or her. Findings show that both kinds of felt shame can be induced to affect such behaviors as decisions to discontinue digital piracy, giving advice or discouraging others not to engage in digital piracy, giving money to anti-digital piracy causes, reporting people who commit acts of digital piracy, signing a petition against digital piracy, and supporting legislation and fines against digital piracy. We examine two boundary conditions of felt shame: values of personal ambition and equality that function as automatic cognitions regulating the shame and through it digital piracy. Hypotheses were tested on a sample of 300 adults.

This study explores the link between institutional quality, ethical behaviors of firms, and market regulations on stock market developments. The dynamic panel regression analysis and moderation analysis with single‐threshold modeling approaches were exploited to test the hypotheses. The results show that overall institutional quality with its six indicators are significant predictors of stock market development taking into account that they have varying influence on different stock market development proxy. Moreover, moderation analysis showed that the ethical behavior of firms and market regulations mostly acts as a substitute and sometimes acts as a complement for institutional quality in stock market development.

In view of corporate wrongdoings like Enron’s accounting fraud and Volkswagen’s emissions scandal, the need to prevent unethical decision-making in the business sector has become widely accepted. Human resource development is of high relevance in this regard: a multiplicity of companies utilizes ethics training programs to teach their managers and employees business ethics and to develop their ethical competences. However, knowledge about the efficacy of these training programs is still rather fragile. In the present study, we (a) develop a framework of relevant design categories to consider in creating ethics training programs; (b) consolidate empirical insights by reviewing 92 studies about the effectiveness of standalone business ethics training programs regarding their impact, dependent variable and measurement methods, design, and conceptual foundation; and (c) identify remaining research gaps and provide theoretical-conceptual considerations for further investigation.

We develop a mixed gamble perspective of tax evasion that explains why family firms vary in how they weigh the costs and benefits of tax evasion. Testing our framework on family firms from India, we find that family firm identity is negatively related to tax evasion when firm performance is high. However, when firm performance is low, family firm identity is positively related to tax evasion. Our study therefore reveals why some family firms refrain from tax evasion, some rationalize it for the sake of the family firm, and others see tax evasion as a financial gain worth the risks.

The study subject of this paper is the identification of changes in public perception of environmental problems, social and corporate governance issues, and the risks arising from its. The goal is going to be finding ways to manage these risks. The research’s methodology envisages a consistent analysis of impact of the amended approaches of society on the basic aspects of companies’ activities, starting from the investment stage, with definition of qualitative and quantitative parameters of the likely risks and benefits associated with the introduction of sustainable development principles by commercial organizations. The result of the study is identification a degree of impact of acceptance of importance or refusal of management of the specified risks on companies’ financial result and its value for shareholders and investors. It is substantiated that nowadays the motivation of investors is determined not only by financial performance of the company, but also by its efforts to comply with the changed ideas of state and society about interaction of the economy and the environment, relations between people. Recommendations are formulated for companies to manage these risks, which are important for all sectors of the economy.

We hypothesize that clothes can affect the behavior of the wearer by influencing the person’s identity. We test this hypothesis by recruiting trick-or-treaters during Halloween, a time of year when people wear salient and extreme clothing. Because the tradition of costume-wear for Halloween evolved, in part, to hide one’s identity during “tricks” (i.e. norm violations), we measure the effect of Halloween costumes on ethical behavior. We use the lying game of Fischbacher and Follmi–Heusi as our experimental paradigm with 2 × 3 × 2 conditions. First, we vary the stakes to price lying behavior. Second, we run three conditions with different beneficiaries of the report (self, other, and both) to test whether lying for others is perceived to be normative. Third, we manipulate the salience of one’s costume to test the effect of costume and identity on ethical behavior. Surprisingly, we find that costume salience caused “good guys” to lie more and “bad guys” to lie less. We interpret this either as a moral licensing effect or as stemming from a perception of being monitored. Our design allows for the identification of contagion effects, and although there were no direct effects of gender, we found that children lie more when children of the same gender near them lie more. We also find that stakes had no effect, people lied more for themselves than for others, and lying has an inverted-U pattern over age, peaking at age 12.

The influence of organizational ethics toward job satisfaction with Standardized Beta (à) is very high (= 0,856) and Adjusted R? = 0.732 and significant at level of significance 5%. It represents, that the contribution of organizational ethics toward job satisfaction on the private banks is 73,2 %. Among the three dimensions which form organizational ethics, the organization's ethical climate (â= 0,429) appears to be the biggest influence and the association between ethical behavior and career success (â= 0,376); and top management support for ethical behavior (a= 0,113) as the lowest influence.The managerial implication from this research is that the private banks' managers can give the more attention to every dimension above. Advises for the future researchers is to do another research that related to the human resource development, such as the link between job satisfaction and organizational commitment.

There is a growing emphasis on the code of conduct in disaster research. It has recently been suggested that the involvement of local researchers is essential to achieving ethical behaviors when external researchers conduct fieldwork and study disaster-affected areas so that they can reflect local voices in their process and outputs. However, it is not always possible to fulfill these conditions due to the nature and preexisting resources of the affected area. Following Japan’s 2011 triple disaster, a team of healthcare providers came in for support activities in the northern coastal area of Fukushima Prefecture. They primarily worked as clinicians before going beyond their original roles and eventually functioning as local researchers by drawing on the commitment of local stakeholders both inside and outside of medical institutions. This case study conducted an in-depth analysis on the initiatives and networks of originally external healthcare providers and discussed essential elements to working as local researchers following an unprecedented disaster with complex and persistent health, social, and political impacts. In conclusion, this has contributed to the development of evidence related to radiation protection and other health issues and supports the need for ethical behavior in disaster research.

This research explored the impact of job satisfaction, the ethical behavior of coworkers, successful managers, and employees themselves. Also explored were six types of ethical climate on organizational commitment and its three dimensions, including affective, continuance, and normative commitment through an investigation on 476 Chinese insurance agents. The empirical results showed that ethical behavior of coworkers and a caring climate had a significantly positive impact on both organizational commitment and its three dimensions, while independence climate had no significant influence on overall organizational commitment or its three dimensions. Job satisfaction, ethical behavior of successful managers and employees themselves, and the other five types of ethical climates only had a significant impact on organizational commitment or some of its dimensions.

This study develops and tests an integrated model that explains how Schwartz’s higher order personal values of Openness to Change, Conservation, Self-Transcendence and Self-Enhancement influence the ethical behavior of accountants. The study further explores the influence of ethics training, gender and religiosity on ethical behavior. A survey instrument was administered to 252 accounting students and the findings reveal that some of the higher order personal values (Conservation, Self-Transcendence, Self-Enhancement) are significant in explaining the ethical behavior of accounting students. The findings also reveal that gender and ethical training influence ethical behavior, and that effect of the personal value Self-Transcendence differs depending on participant gender and also religiosity. The implications of the findings are discussed.

Increased global competitiveness has forced corporations to improve how they manage their resources, especially when it comes to resources that give them a competitive advantage. Corporate Reputation and Corporate Social Responsibility fulfill that role. This research aims to identify the dimensions that most influence Corporate Reputation and which can be most easily used to achieve a positive result. To do this, the data about 46 companies (from different sectors) contained in the 2015 report “The world's most reputable companies” by Reputation Institute was used. This report identifies seven dimensions which influence Corporate Reputation: products and services, innovation, workplace, governance, citizenship, leadership, and performance. The most important main conclusions are that (a) those companies in which the dimensions of Corporate Social Responsibility (workplace, governance, citizenship) were at an acceptable level, also had an acceptable level of Corporate Reputation. (b) Companies usually carry out passive Corporate Social Responsibility actions, such as those involving citizenship.

The nonprofit sector continues to grow in size, assets, and influence. However, a critical eye in recent years has brought scrutiny from many stakeholders to the operations of nonprofit organizations (NPOs). Accountability, transparency, and ethical behavior are now part of the everyday language of NPO leaders, staff, volunteers, donors, and board members. This study synthesizes research on a specific set of guidelines developed by Independent Sector and provides a substantive review of key concepts and developments related to nonprofit ethics and accountability. The results should prove useful for NPO staff, stakeholders, regulators, the media, and others interested in improved governance.

The Defense Advanced Research Project Agency’s (DARPA) mission is to make pivotal investments leading to research breakthroughs that support national security. DARPA artificial intelligence (AI) programs have emphasized the need for machines to perceive and interact with the world around them; to frame problems and to arrive at solutions and decisions based on reasoning; to implement those decisions, perhaps through consultation with a human or another machine; to learn; to explain the rationale for decisions; to adhere to rules of ethical behavior defined for humans; to adapt to dynamic environments; and, to do all of this in real-time. In short, DARPA has always been interested in AI frameworks that integrate AI and computer science technologies, and the application of those frameworks to DARPA-hard problems. In this article, we describe the significant role that DARPA has played in the establishment of AI, and introduce six articles that explore DARPA’s Three Waves of AI.

Prior research finds that firms with strong business ethics are less likely to be tax aggressive. Labor union is one of the key stakeholders influencing firm’s tax aggressive behavior, whereas the bargaining process between labor union and firms exhibits ethical dilemma. Although industry-wide labor union coverage is commonly used in prior study to explore the monitoring role of labor unions in constraining management’s aggressive financial and tax decisions of their associated firms, we argue that firm-specific labor unions, which represent a different bargaining power of the employees, do play an important role in determining firms’ tax ethical decisions. Specifically, we examine whether and how the firm-specific labor union coverage impacts firms’ tax aggressiveness decisions over and above industry-wide labor union coverage. We hypothesize and find that firm-specific labor unions influence the associated firms to be more tax aggressive, which results in higher levels of residual cash flows. We also find that industry-wide labor unions influence the associated firms to be less tax aggressive, which is consistent with prior findings. We perform further analyses and find that the results are more pronounced for the firms with greater industry-wide labor unions representation. These results demonstrate that the inclusion of and interaction between the firm-specific and industry-wide labor unions matter in determining corporate’s tax aggressiveness decisions, which highlight firm’s ethical perplexity between tax savings and social commitments.

The selling environment is becoming more and more competitive and organizations are trying to gain edge over the other companies. Producing quality goods is not enough. In such a scenario, organizations are trying to make improvements in their salesforce which can be made by making them more ethical. Therefore, it becomes important for the organization to know the factors affecting salesforce ethical behavior. This paper makes an attempt in this regard and explores the organizational antecedents of salesforce ethical behavior. The findings of the review reveal that there are various organizational factors which have an impact on salesforce ethical behavior such as compensation plan, quota, top management, code of ethics, salesforce control system, ethical climate, and ethics training. Based on the findings, the implications and directions for future research are stated.