آگاهی اخلاقی مدیران و حسابداران کسب و کار چینی و دیدگاه های آنها در استفاده از حساب های خارج از کتاب

This paper reports the survey results of ethical awareness of Chinese business managers and accountants on business ethical issues and their assessment of the nature of off-book accounts (OBAs) usage from the perspective of ethical viewpoints. We find that Chinese respondents can, overall, make appropriate ethical judgments on explicitly unethical business behaviors but they may still adopt a relatively tolerant view towards some business behaviors that are less explicit in deviation from the general business ethics. Regarding the ethical assessment of the use of OBAs in practice, Chinese respondents can generally recognize the illegitimacy and irrationality of the OBAs and they hold reservations on the so-called positive effects of OBAs. In addition, the paper has further analyzed the impacts of a series of influential factors (e.g., gender, age, education, job occupation, work experience, firm size/listing status, and business ownership) on the ethical judgments of general business ethical issues and the ethical assessment of the nature of OBAs made by the respondents respectively.

Through questionnaire survey, we analyze the ethical awareness of Chinese business managers and accountants and their views on the use of OBAs from the perspective of business ethics. Overall we find that Chinese respondents can uphold some ethical values and standards that are prevailing in the developed economies, especially the respondents, in general, express a low level of tolerance towards those business behaviors that are explicitly against the normal business ethics, such as exaggerated or untruthful advertising, substitute of low piece or poor quality parts in products, use of unlicensed computer software, and overspending on entertainment by senior executives. However, Chinese respondents, taken as whole, are not strongly against some business behaviors that are not so obvious in violation of general business ethics, including delay payment to suppliers, lure to hire key employees of competitors, kick back from sales, cut R&D or other necessary expenses to boost profits, and sending gifts to higher authorities. In addition, the respondents demonstrate only moderate acceptance of whistle blowing to external authorities for management misconduct or illegal acts. The respondents' such ethical awareness or judgments may be attributed to the specific business environment and traditional business practices in China. For instance, guanxi (relationship) is very important for running business operations in China, so sending gifts (or bribes) to higher authorities to build up guanxi and offering or receiving kickback from sales may be regarded as necessary for mutual benefits (favors) in business operations ( Lovett et al., 1999, Steidlmeier, 1999, Tian, 2008 and Yang, 1994). In addition, under the formal centrally planned economy and state-ownership business structures, almost all business entities were owned and run by the state or government agencies. Thus, delay payment to suppliers, cut R&D or other expenses to boost profits, or lure to hire key employees of competitors are not regarded as so unethical or intolerable as other explicit unethical business behaviors in China. Furthermore, under the traditional Chinese culture of manzi (face save), loyalty, or self-esteem and the long-term emphasis on collectivism or relativeness under the socialist doctrines, most Chinese people are more constraints towards the wrongdoings of colleagues or other fellows (Erdener, 1998). They may try to avoid direct criticism or blame others even when the later have made mistakes or misconduct. Therefore, whistle-blowing is not treated as an admirable action among many Chinese people at the present. The findings of this study suggest that there is an urgent need to enhance business ethics education in pace with the progress of economic reforms towards a market-oriented economy in China. The ethical standards prevailing in the developed market economies should be greatly promoted and adopted, particularly when the Chinese economy is increasingly integrated with the world markets in recent years. For the general views towards the establishment and use of OBAs, the study results reveal that Chinese business managers and accountants can appropriately recognize the essential nature of the OBAs, i.e., the use of OBAs is illegitimate and irrational even the OBAs are widely used by many business enterprises or non-business organizations in China. The respondents have demonstrated relatively strong reservations on the so called positive effects of OBAs and explicitly recognized the negative effects of OBAs. In particular, the respondents have made their assessments on OBAs from the perspective of business ethics as they generally agree that the use of OBAs mainly facilitates management to circumvent restrictions on illegitimate or illegal spending, but it is harmful to budgetary controls and will cause untruthful financial reporting. Furthermore the respondents agree that the use of OBAs may indicate the integrity problem of the management, and it will induce corruptions by the management. The recognition of these negative effects or unethical nature of OBAs is helpful to the restriction of OBAs usage in practice. It can therefore be inferred that the OBAs, although being used by many business and non-business entities, cannot be justified from the point of business ethical standards. Thus the so-called collective corruption of OBAs may loss its popularity so long as the importance of business ethics is recognized and promoted in China. Our study found that, at present, business accountants demonstrated a higher level of ethical awareness than business managers in China. They held a lower level of acceptance or tolerance toward unethical business behaviors and the use of OBAs in practice. The reasons may be attributed to the fact that accountants have to undertake more education or training on ethics under their professional qualification requirements and they should comply with the professional codes of conduct or ethical standards in their work to fulfill their professional obligations. The finding should suggest that there is an urgent need to expand ethical education or training to business managers in order to raise ethical standards in business operations in China. Our study also found that gender has an effect on ethical awareness or judgment. In general, female respondents showed a lower level of acceptance or tolerance than male respondents towards unethical business behaviors. The finding is consistent with the result of prior studies in the literature (Deshpande, 1997, Giacomino and Akers, 1998 and Kracher et al., 2002). This may confirm that females are more sensitive in their moral reasoning or ethical judgment as they will more concern about the justice, fairness, integrity, and legitimacy than the male counterparts, so they will less tolerate of unethical business behaviors. Nonetheless religion has very limited effect on ethical awareness in China at present. This may be due to the long time depression of religion beliefs under the orthodox Communist or Socialist ideologies. Most Chinese people did not have the freedom in religion until very recent years, they did not receive formal religion education and their beliefs in religion were depressive or immature. This may explain why religion background could not play a significant role in moral awareness and ethical judgment in China at present. Many studies argued that age is a factor influencing people's moral development and ethical awareness (Deshpande, 1997 and King and Mayhew, 2002), this contention has been verified, to certain extent, in our study. Thus middle-age and senior respondents, in contrast to young respondents (less that 30 years old) did demonstrate a lower level of acceptance of some unethical business behaviors and the use of OBAs. In particular, from the work experience perspective, seniority in job tenure did correspond to lower level of tolerance toward unethical business behaviors. The results may suggest that senior respondents have loner work experience and they have received more disciplinary education/training in career development. So they are keener in ethical awareness and will be less tolerant towards unethical business behaviors and the use of OBAs in practice. The younger Chinese people who have short work experience and less professional training grew up over the last three decades of dramatic economic reforms or transition of marketization in China. Influenced under the motivation for profit and wealth maximization derived from the market economies and less exposure to ethical education or training, the young generation may be keener in seeking for individual materialistic or pecuniary benefits instead of the traditional socialist values for collective interests, which may lower their standards in ethical judgment. It is argued that the Chinese government should enhance ethical education and training for young generation, in order to boost ethical standards in business operations. Finally our study findings indicate that firm size alone is not a major factor to influence respondents' moral awareness and ethical judgments. However, the public listing status of business enterprises did have some significant effects. This may be because the listed companies must comply with more stringent regulatory rules on their operations and information disclosures and they must be subject to more severe scrutiny by market regulators and public investors, in contrast to unlisted companies. They have to face greater pressures for rules-compliance or to receive greater disciplinary actions and consequences for violations of regulations or ethical standards. Thus, the respondents from listed companies should have a higher level of ethical awareness and a lower level of tolerance towards unethical business behaviors or the use of OBAs. In addition, business ownership may be another factor affecting ethical judgments or decisions. In particular, for those individual-owned private enterprises in China, due to their hierarchical family structure of governance and management style and the unlisted status, the market regulation and disciplinary sanction pressures were relatively weaker comparing to that for the more established SOEs and FIEs, so their ethical standards for business operations will have been lower than that of the SOEs and FIEs at present. It should be pointed out that there are some limitations in this study. A main problem is the representativeness of our survey sample as the respondents are the part-time EMBA and MPAcc students in three universities in tow regions in China. Although most of the part-time students have relatively extensive work experience, whether they can appropriately represent business managers and accountants in their moral awareness and ethical judgments may be challengeable. As we have particularly examined the difference in the perceptions of business managers and accountants, no control group proxy for the general population was employed. Thus the inference of our study results should be made with caution. In addition, the data analysis in this study is mainly based on univariate analysis except for the regression analysis of the influencing factors/attributes to explain the variation of the overall assessment of the critical nature of OBAs. Although we adopted the assumptions of treating Likert scale data as in equal interval scale and maintaining normality, the validity of regression analysis is subject to further tests and confirmation. Finally, some other multivariate tests can be employed in future study to enhance the robustness of the study conclusions.