The Effect of Personal Values on Individuals' Ethical Behavioural Intentions: Evidence from Professional Auditors in People's Republic of China

Abstract:     
As one of the fastest growing stock market in the world, Chinese market gradually plays an important role in the global economic order. As a result, some researchers from Canada and US start to explore research opportunities in Chinese market. However, following the concern of business ethics in the People's Republic of China (PRC), related parties raised another specific concern about the PRC auditing¿whether the audited accounting numbers are reliable, which motivates this study to examine the PRC professional auditors' ethical behavioural intentions. It is hypothesized that auditors possessing higher degrees of idealism and lower degrees of relativism, and possessing lower degrees of guanxi orientation will be less likely to develop the unethical behavioural intentions. The main findings indicate that idealism had a positive, relativism had a negative, and guanxi orientation had a negative impact on professional auditors' ethical behavioural intentions. This study also explores the potential effects of CPA firm type (local vs. international) on the PRC professional auditors' ethical behavioural intentions and the result suggests that professional auditors employed by international CPA firms were less likely to develop unethical behavioural intentions than those employed by local firms. The overall findings suggest that idealism, relativism, guanxi orientation, and CPA firm type play a significant role in the PRC professional auditors' ethical behavioural intentions.

Number of Pages in PDF File: 39

Keywords: Ethical Behavioral Intentions, Idealism, Relativism, Guanxi Orientation

JEL Classification: M41

working papers series