Abstract
We contribute to the literature on intentions to report wrongdoing by examining whether Chinese internal auditors make consistent judgments when an ethical dilemma is presented in English and when the same dilemma is presented in Chinese. We invoke cultural frame switching theory, and our findings, which are based on a randomized experiment using between-subjects and within-subject mixed design, support the hypothesis that Chinese internal auditors are more likely to report wrongdoing when the ethical dilemma is presented in English than when it is presented in Chinese. Our results, which demonstrate that internal auditors make inconsistent ethical judgments in English and Chinese, point to language-triggered cognitive bias resulting from cultural mindsets. We suggest practical interventions and language strategies to improve audit quality.
Similar content being viewed by others
Data Availability
The data are available from the first author.
Notes
For example, PCAOB Auditing Standard No. 5 requires external auditors to consider the internal audit function’s work in assessing internal control effectiveness.
In China, Simplified Chinese is the official standard written language used in education and teaching in schools and universities, as well as in business. It is the second most important global business language (The World Bank, 2017). In our study, Chinese refers to Simplified Chinese, which is the native language of our participants. Accordingly, the Chinese version of our research instrument was developed in Simplified Chinese.
China is one of the USA’s top three trading partners (The U.S. Census Bureau, 2022). Chinese cross-listed firms in the USA have been valued at $US1.8 trillion (Forbes, 2020). Moreover, the linguistic distance index shows that Chinese and English represent the greatest difference in language families (Dow et al., 2016).
For example, Lee et al. (2010) show that Chinese students are more self-enhancing in rating themselves as better than others when their individualist mindset is made salient in English compared to when their collectivist mindset is made salient in Chinese. Furthermore, based on findings from four studies, Chen et al. (2014) consistently show that the predictive power of “dialectical thinking” on cultural orientations is stronger in Chinese than in English.
In a more recent study relating to business ethics, Taghavi and Segalla (2023) suggest that frame switching renders one set of cultural knowledge temporarily accessible when activated by situational cues. They provide evidence that religious stimuli interacted with cultural identity to predict work ethic using North African–French individuals.
For example, evidence shows that the presence of a Code of Ethics has a positive impact on the quality of judgments made by auditors, but not on students (Pfugrath et al., 2007). Holthoff et al. (2015) suggest future research involving accounting practitioners to examine topics relating to fraud and litigation cases.
Consistent with the literature in cross-cultural psychology (Bond, 1991; Harrison and McKinnon, 1999; Patel, 2006), our use of the concept of individualist versus collectivist societies refers not only to Hofstede’s (1980, 2011) cultural dimension of individualism versus collectivism but also captures perceptions of acceptable cultural norms and behavior (Bik and Hooghiemstra, 2018; Harrison, 1992; Harrison and McKinnon, 1999).
Consistently, evidence also shows that individuals in individualist cultures, such as the United States and Australia, are more positive towards reporting wrongdoing than individuals in collectivist cultures, such as India, Malaysia, and Croatia (e.g., Arnold et al., 2007; Lee et al., 2019; Nayir and Herzig, 2012; Park et al., 2005; Sims, 2009; Tavakoli et al., 2003; Zheng et al., 2019).
We acknowledge that prior studies have identified that individuals’ intentions to report wrongdoing may also be affected by organizational characteristics, such as whether organizations protect employees from possible retaliation for reporting wrongdoing and provide anonymous reporting channels (see Lee and Xiao, 2018 for a summary of factors that influence reporting accounting- and auditing-related wrongdoing). It is not possible to include all specific factors because many of these are correlated with the three mediating factors in our model, which may potentially threaten the validity of the theoretical model. Therefore, we applied Graham’s (1986) and Schultz et al.’s (1993) theoretical model, which captures individuals’ “psychological state” (Graham, 1986, p. 39) related to their intentions to report wrongdoing when using English versus Chinese.
We adopted the third-person approach to reduce possible “moral muteness,” whereby individuals are hesitant to discuss their own ethics (Ramsey et al., 2007, p. 197). Specifically, our scenario presented an ethical dilemma relating to reporting a wrongdoing by a third person and posited a decision made by that person. Participants were then required to evaluate this third person’s decision in the scenario. Prior research suggests that the formulation of the scenario in the third person rather than the first person can largely free participants from the need to state their own responses to whether to report the wrongdoing in the scenario, thereby reducing their felt pressure to provide a socially desirable response (Lowe et al., 2015; Patel and Millanta, 2011).
While linguistic equivalence is important in developing research instruments, direct translation may make translated texts difficult to understand, which potentially affects how participants respond to the research instrument (Evans et al., 2015; Kocbek, 2008; Laaksonen, 2021). To address this limitation, we applied the translation and back-translation method and the committee method (e.g., Brislin, 1986; Kamala and Komori, 2018) in developing the research instrument in English and Chinese to achieve the best possible cultural fit and linguistic equivalence. We acknowledge that there may be minor discrepancies in the English and Chinese versions of our research instrument, which is a possible limitation of our study.
This is because the College English Test (CET) in Band 4 is compulsory to meet the requirements for bachelor or higher degrees in China. The CET is a national examination that measures individuals’ English proficiency in mainland China.
We conducted pre-experimental interviews in English with 30 randomly selected internal auditors during the recruitment phase. Consistent with Benet-Martínez and Haritatos (2005) and Chen et al. (2014), we asked questions about participants’ English exposure within and outside the workplace, such as “How much do you use English in your workplace?” and “How often do you watch TV shows or movies in English?” Participants were also asked questions relating to their experience of internal auditing practice, such as “How many years have you been an internal auditor?” and “To whom do you report when you are aware of irregularities?”.
Eight participants’ responses in both languages were excluded from the data analysis because the majority of the required information was not provided, or they provided inconsistent demographic information in English and Chinese.
The majority of our participants were junior internal auditors because they met the stringent language requirements to complete the experimental tasks. Compared to senior internal auditors and others in higher positions, junior internal auditors have greater exposure to English language environments.
Statement 1 and statement 2 relate to the collectivist and interdependent cultural mindset. For each statement, the mean score of participants’ responses in Chinese is significantly higher than the mean score in English (statement 1: Chinese mean = 6.16 vs. English mean = 5.91; statement 2: Chinese mean = 4.56 vs. English mean = 4.13), indicating that participants’ collectivist and interdependent cultural mindset was more accessible in Chinese.
Statement 3 and statement 4 relate to the individualist and independent cultural mindset. For each statement, the mean score of participants’ responses in English is significantly higher than the mean score in Chinese (statement 3: English mean = 4.49 vs. Chinese mean = 3.96; statement 4: English mean = 5.09 vs. Chinese mean = 3.97), indicating that participants’ individualist and independent cultural mindset was more accessible in English.
Our robustness tests controlling gender, age, professional experience, qualifications, existence of the Code of Ethics, size of organization, participants’ evaluation of realism and understandability of the scenario, as well as the distributing sequences of the research instrument produce consistent results with those from the main analyses.
References
Alberti, C. T., Bedard, J. C., Bik, O., & Vanstraelen, A. (2022). Audit firm culture: Recent developments and trends in the literature. European Accounting Review, 31(1), 59–109.
Alcántara-Pilar, J. M., Barrio-García, S. D., & Rodríguez-López, M. E. (2018). Does language matter? A cross-national comparison of the moderating effect of language on website information-processing. Journal of Business Research, 88, 66–78.
Alleyne, P., Hudaib, M., & Pike, R. (2013). Towards a conceptual model of whistle-blowing intentions among external auditors. The British Accounting Review, 45(1), 10–23.
Andon, P., Free, C., Jidin, R., Monroe, G. S., & Turner, M. J. (2018). The impact of financial incentives and perceptions of seriousness on whistleblowing intention. Journal of Business Ethics, 151, 165–178.
Arnold, D. F., Bernardi, R. A., Neidermeyer, P. E., & Schmee, J. (2007). The effect of country and culture on perceptions of appropriate ethical actions prescribed by code of conduct: A Western European perspective among accountants. Journal of Business Ethics, 70, 327–340.
Arnold, D. F., & Ponemon, L. A. (1991). Internal auditors’ perceptions of whistle-blowing and the influence of moral reasoning: An experiment. Auditing: A Journal of Practice & Theory, 10(2), 1–15.
Asay, H. S., Guggenmos, R. D., Kadous, K., Koonce, L., & Libby, R. (2022). Theory testing and process evidence in accounting experiments. The Accounting Review, 97(6), 23–43.
Association of Certified Fraud Examiners (ACFE). (2022). Occupational fraud 2022:A report to the nations. https://acfepublic.s3.us-west-2.amazonaws.com/2022+Report+to+the+Nations.pdf
Austin, A. A., & Carpenter, T. D. (2021). Game changer: Can modifications to audit firm communication improve auditors’ actions in response to heightened fraud risk? Auditing: A Journal of Practice and Theory, 41, 1–26.
Babri, M., Davidson, B., & Helin, S. (2021). An updated inquiry into the study of corporate codes of ethics: 2005–2016. Journal of Business Ethics, 168, 71–108.
Bailey, W. J., & Spicer, A. (2007). When does national identity matter? Convergence and divergence in international business ethics. Academy of Management Journal, 50(6), 1462–1480.
Benet-Martinez, V., & Haritatos, J. (2005). Bicultural identity integration (BII): Components and psychological antecedents. Journal of Personality, 73, 1015–1050.
Benet-Martinez, V., Leu, J., Lee, F., & Morris, M. W. (2002). Negotiating biculturalism: Cultural frame switching in biculturals with oppositional versus compatible cultural identities. Journal of Cross-Cultural Psychology, 33(5), 492–516.
Bik, O., & Hooghiemstra, R. (2018). Cultural differences in auditors’ compliance with audit firm policy on fraud risk assessment procedures. Auditing: A Journal of Practice and Theory, 37(4), 25–48.
Bond, M. H. (1991). Beyond the Chinese face: Insights from psychology. Oxford University Press.
Brewster, B. E., Butler, J. B., & Watkins, A. L. (2019). Eliminating biases that jeopardize audit quality. Journal of Accountancy, 228(2), 42–47.
Brewster, B. E., Johanns, A. J., Peecher, M. E., & Solomon, I. (2021). Do stronger wise-thinking dispositions facilitate auditors’ objective evaluation of evidence when assessing and addressing fraud risk? Contemporary Accounting Research, 38(3), 1679–1711.
Brink, A. G., Eller, C. K., & Gao, L. (2021). He wouldn’t, but I would: The effects of pronoun-induced language vividness in whistleblowing policies. Advances in Accounting, 54, 100545.
Brink, A. G., Eller, C. K., & Green, K. Y. (2022). Fraud reporting within an organization and the use of the internal audit function as a training ground for management. Behavioral Research in Accounting, 34(1), 1–22.
Brink, A. G., Lowe, J. D., & Victoravich, L. M. (2013). The effect of evidence strength and internal rewards on intentions to report fraud in the Dodd–Frank regulatory environment. Auditing: A Journal of Practice and Theory, 32(3), 87–104.
Brink, A. G., Lowe, J. D., & Victoravich, L. M. (2017). The public company whistleblowing environment: Perceptions of a wrongful act and monetary attitude. Accounting and the Public Interest, 17(1), 1–30.
Brislin, R. W. (1986). The wording and translation of research instrument. In W. J. Lonner & J. W. Berry (Eds.), Field-methods in cross-cultural research (pp. 137–164). Sage Publications.
Chambers, R. (2015). China: The new frontier for internal auditing. https://iaonline.theiia.org/blogs/chambers/2015/china-the-new-frontier-for-internal-auditing
Chen, S. X., Benet-Martinez, V., & Ng, J. C. K. (2014). Does language affect personality perception? A functional approach to testing the Whorfian hypothesis. Journal of Personality, 82(2), 130–143.
Chen, S. X., Benet-Martinez, V., Wu, W. C. H., Lam, B. C. P., & Bond, M. H. (2013). The role of dialectical self and bicultural identity integration in psychological adjustment. Journal of Personality, 81(1), 61–75.
Chen, S. X., & Bond, M. H. (2010). Two langauge, two personalities? Examining language effects on the expression of personality in a bilingual context. Personality and Social Psychology Bulletin, 36(11), 1514–1528.
Chiu, R. K. (2003). Ethical judgment and whistleblowing intention: Examining the moderating role of locus of control. Journal of Business Ethics, 43, 65–74.
Conyon, M. J., & He, L. (2016). Executive compensation and corporate fraud in China. Journal of Business Ethics, 134, 669–691.
Curtis, M. (2006). Are audit-related ethical decisions dependent upon mood? Journal of Business Ethics, 68, 191–209.
Dahlgren, J., & Nilsson, S. (2012). Can translations achieve comparability? The case of translating IFRS into Swedish. Accounting in Europe, 9(1), 39–59.
Dalton, D., & Radtke, R. R. (2013). The joint effects of Machiavellianism and ethical environment on whistle-blowing. Journal of Business Ethics, 117, 153–172.
De Quidt, J., Haushofer, J., & Roth, C. (2018). Measuring and bounding experimenter demand. American Economic Review, 108(11), 3266–3302.
Dow, D., Cuypers, I. R. P., & Ertug, G. (2016). The effects of within-country linguistic and religious diversity on foreign acquisitions. Journal of International Business Studies, 47, 319–346.
Earley, C. E., Hoffman, V. B., & Joe, J. R. (2008). Reducing management’s influence on auditors’ judgments: An experimental investigation of SOX 404 assessments. The Accounting Review, 83(6), 1461–1485.
Ejelov, E., & Luke, T. J. (2020). “Rarely safe to assume”: Evaluating the use and interpretation of manipulation checks in experimental social psychology. Journal of Experimental Social Psychology, 87, 103937.
Evans, L. (2004). Language, translation and the problem of international accounting. Accounting, Auditing and Accountability Journal, 17(2), 210–248.
Evans, L. (2018). Language, translation and accounting: Towards a critical research agenda. Accounting, Auditing and Accountability Journal, 31(7), 1844–1873.
Evans, L., Baskerville, R., & Nara, K. (2015). Colliding worlds: Issues relating to language translation in accounting and some lessons from other disciplines. Abacus, 51(1), 1–36.
Flory, S., Phillips, T., Jr., Reidenbach, R. E., & Robin, D. (1992). A multidimensional analysis of selected ethical issues in accounting. The Accounting Review, 67, 284–302.
Forbes. (2020). Why do Chinese companies list their shares in New York? https://www.forbes.com/sites/georgecalhoun/2020/08/14/why-do-chinese-companies-list-their-shares-in-new-york/#5567d9971f1b
Fredin, A. J. (2011). The effects of anticipated regret on the whistleblowing decision. Ethics and Behavior, 21(5), 404–427.
Gao, J., Greenberg, R., & Wong-On-Wing, B. (2015). Whistleblowing intentions of lower-level employees: The effect of reporting channel, bystanders, and wrongdoer power status. Journal of Business Ethics, 126, 85–99.
Gao, L., & Brink, A. G. (2017). Whistleblowing studies in accounting research: A review of experimental studies on the determinants of whistleblowing. Journal of Accounting Literature, 38, 1–13.
Graham, J. (1986). Principled organizational dissent: A theoretical essay. In L. L. Cummings & B. M. Staw (Eds.), Research in organizational behavior (pp. 65–115). JAI Press.
Griffith, E. E., Nolder, C., & Petty, R. E. (2018). The elaboration likelihood model: A meta-theory for synthesizing auditor judgment and decision-making research. Auditing: A Journal of Practice and Theory, 37(4), 169–186.
Gundlach, M. J., Douglas, S. C., & Martinko, M. J. (2003). The decision to blow the whistle: A social information processing framework. Academy of Management Review, 28(1), 107–123.
Harrison, G. (1992). The cross-cultural generalizability of the relation between participation, budget emphasis and job related attitudes. Accounting, Organizations and Society, 17(1), 1–15.
Harrison, G., & McKinnon, J. L. (1999). Cross-cultural research in management control systems design: A review of the current state. Accounting, Organizations and Society, 24, 5–6.
Hassin, R. R., & Sklar, A. Y. (2014). The human unconscious—A functional perspective. In J. W. Sherman, B. Gawronski, & Y. Trope (Eds.), Dual-process theories of the social mind (pp. 299–313). Guilford Press.
Hauser, D. J., Ellsworth, P. C., & Gonzalez, R. (2018). Are manipulation checks necessary? Frontiers in Psychology, 9, 998. https://doi.org/10.3389/fpsyg.2018.00998
Hayakawa, S., Pan, Y., & Marian, V. (2022). Language changes medical judgments and beliefs. International Journal of Bilingualism, 26(1), 104–121.
Hayes, A. F. (2013). Introduction to mediation, moderation, and conditional process analysis. Guilford Press.
Hellmann, A., Patel, C., & Tsunogaya, N. (2021). Foreign-language effect and professionals’ judgments on fair value measurement: Evidence from Germany and the United Kingdom. Journal of Behavioral and Experimental Finance, 30, 100478.
Hoang, H., & Trotman, K. T. (2021). The effect of CSR assurance and explicit assessment on investor valuation judgments. Auditing: A Journal of Practice and Theory, 40(1), 19–33.
Hofstede, G. H. (1980). Culture’s consequences: International differences in work-related values. Sage.
Hofstede, G. H. (2011). Dimensionalizing cultures: The Hofstede model in context. Online Readings in Psychology and Culture, 2(1), 8. https://doi.org/10.9707/2307-0919.1014
Holthoff, G., Hoos, F., & Weissenberger, B. E. (2015). Are we lost in translation? The impact of using translated IFRS on decision-making. Accounting in Europe, 12(1), 107–125.
Hong, Y. Y., Morris, M. W., Chiu, C. Y., & Benet-Martinez, V. (2000). Multicultrual minds: A dynamic constructivist approach to culture and cognition. American Psychologist, 55(7), 709–720.
Huerta, E., Petrides, Y., & Braun, G. P. (2016). Interpretation of probability expressions in accounting: The effects of frame switching. Journal of International Accounting, Auditing and Taxation, 27, 1–12.
Hwang, D. B., Chen, Y., Staley, A. B., Tsai, Y., & Chu, C. L. (2013). A comparative study of the propensity of whistle-blowing: Empirical evidence from China, Taiwan, and the United States. International Journal of Accounting and Financial Reporting, 3(2), 202.
Kamala, R., & Komori, N. (2018). Diagnosing translation gap: The politics of translation and the hidden contradiction in interdisciplinary accounting research. Accounting, Auditing and Accountability Journal, 31(7), 1874–1903. https://doi.org/10.1108/AAAJ-08-2017-3067
Kaplan, S. E., Pany, K., Samuels, J., & Zhang, J. (2012). An examination of anonymous and non-anonymous fraud reporting channels. Advances in Accounting, 28(1), 88–95.
Kaplan, S. E., & Schultz, J. J. (2007). Intentions to report questionable acts: An examination of the influence of anonymous reporting channel, internal audit quality, and setting. Journal of Business Ethics, 71(2), 109–124.
Kettunen, J. (2017). Interlingual translation of the International Financial Reporting Standards as institutional work. Accounting, Organizations and Society, 56(1), 38–54.
Kitayama, S., King, A., Yoon, C., Tompson, S., Huff, S., & Liberzon, I. (2014). The dopamine D4 receptor gene (DRD4) moderates cultural difference in independent versus interdependent social orientation. Psychological Science, 25(6), 1169–1177.
Kocbek, A. (2008). The cultural embeddedness of legal texts. Journal of Language and Translation, 9(2), 49–70.
Komissarouk, S., & Nadler, A. (2014). “I” seek autonomy, “we” rely on each other self-construal and regulatory focus as determinants of autonomy- and dependency-oriented help-seeking behavior. Personality and Social Psychology Bulletin, 40(6), 726–738.
Kuselias, S., Lauck, J. R., & Williams, S. (2021). Social media content and social comparisons: An experimental examination of their effect on audit quality. Auditing: A Journal of Practice and Theory, 40(1), 55–72.
Kwon, B., & Farndale, E. (2020). Employee voice viewed through a cross-cultural lens. Human Resource Management Review, 30(1), 1–11.
Laaksonen, J. (2021). International comparability and translation: How is the concept of equivalence used and understood in accounting research? Accounting, Auditing and Accountability Journal, 34(1), 137–163.
Lee, G., & Fargher, N. (2018). The role of the audit committee in their oversight of whistle-blowing. Auditing: A Journal of Practice and Theory, 37(1), 167–189.
Lee, G., Pittroff, E., & Turner, M. J. (2019). Is a uniform approach to whistleblowing regulation effective? Evidence from the United States and Germany. Journal of Business Ethics, 163, 553–576.
Lee, G., & Xiao, X. (2018). Whistleblowing on accounting-related misconduct: A synthesis of the literature. Journal of Accounting Literature, 41, 22–46.
Lee, S. W. S., Oyserman, D., & Bond, M. H. (2010). Am I doing better than you? That depends on whether you ask me in English or Chinese: Self-enhancement effects of language as a cultural mindset prime. Journal of Experimental Social Psychology, 46, 785–791.
Lin, H., Yeh, S., & Yen, Y. (2019). Effects of translation on probability judgments: Evidence from the IFRS in Taiwan. Journal of International Accounting Research, 18(1), 127–141.
Liu, S., Liao, J., & Wei, H. (2015). Authentic leadership and whistleblowing: Mediating roles of psychological safety and personal identification. Journal of Business Ethics, 131, 107–119.
Lowe, D. J., Pope, K. R., & Samuels, J. A. (2015). An examination of financial sub-certification and timing of fraud discovery on employee whistleblowing reporting intentions. Journal of Business Ethics, 131, 757–772.
Luna, D., Ringberg, T., & Peracchio, L. (2008). One individual, two identities: Frame switching among biculturals. Journal of Consumer Research, 35(2), 279–293.
Markus, H. R., & Kitayama, S. (1991). Culture and the self: Implications for cognition, emotion, and motivation. Psychological Review, 98(2), 224–253.
Matthews, S. H., Kelemen, T. K., & Bolino, M. C. (2021). How follower traits and cultural values influence the effects of leadership. The Leadership Quarterly, 32(1), 101497. https://doi.org/10.1016/j.leaqua.2021.101497
Mihret, D. G., & Grant, B. (2017). The role of internal auditing in corporate governance: A Foucauldian analysis. Accounting, Auditing and Accountability Journal, 30(3), 699–719.
Montoya, A. K., & Hayes, A. F. (2017). Two-condition within-participant statistical mediation analysis: A path-analytic framework. Psychological Methods, 22(1), 6–27.
Mutschmann, M., Hasso, T., & Pelster, M. (2022). Dark triad managerial personality and financial reporting manipulation. Journal of Business Ethics, 181, 763–788.
Nayir, D. Z., & Herzig, C. (2012). Value orientations as determinants of preference for external and anonymous whistleblowing. Journal of Business Ethics, 107, 197–213.
Neff, K. D., Pisitsungkagarn, K., & Hsieh, Y. P. (2008). Self-compassion and self-construal in the United States, Thailand, and Taiwan. Journal of Cross-Cultural Psychology, 39(3), 267–285.
Nolder, C., & Kadous, K. (2018). Grounding the professional skepticism construct in mindset and attitude theory: A way forward. Accounting, Organizations and Society, 67, 1–14.
Nolder, C., & Riley, T. (2014). Effects of differences in national culture on auditors’ judgments and decisions: A literature review of cross-cultural auditing studies from a judgment and decision making perspective. Auditing: A Journal of Practice and Theory, 33(2), 141–164.
Oyserman, D. (2011). Culture as situated cognition: Cultural mindsets, cultural fluency, and meaning making. European Review of Social Psychology, 22(1), 164–214.
Pan, P., & Patel, C. (2018). The influence of native versus foreign language on Chinese subjects’ aggressive financial reporting judgments. Journal of Business Ethics, 150(3), 863–878.
Park, H., Rehg, M. T., & Lee, D. (2005). The influence of Confucian ethics and collectivism on whistleblowing intentions: A study of South Korean public employees. Journal of Business Ethics, 58(4), 387–403.
Patel, C. (2006). A comparative study of professional accountants’ judgements. Emerald Group Publishing.
Patel, C., & Millanta, B. R. (2011). “Holier-than-thou” perception bias among professional accountants: A cross-cultural study. Advances in Accounting, 27(2), 373–381.
Pfugrath, G., Martinov-Bennie, N., & Chen, L. (2007). The impact of codes of ethics and experience on auditor judgments. Managerial Auditing Journal, 22(6), 566–589.
Pike, B. J., Curtis, M. B., & Chui, L. (2013). How does an initial expectation bias influence auditors’ application and performance of analytical procedures? The Accounting Review, 88(4), 1413–1431.
Public Company Accounting Oversight Board (PCAOB). (2011). Activity summary and audit implications for reverse mergers involving companies from the China Region: January 1, 2007 through March 31 2010. Research note #2011-P1. https://pcaobus.org/Research/Documents/Chinese_Reverse_Merger_Research_Note.pdf
Public Company Accounting Oversight Board (PCAOB). (2019). Non-U.S. registered firms. https://pcaobus.org/International/Registration/Pages/InternationalRegisteredFirms.aspx.
Public Company Accounting Oversight Board (PCAOB). (2020). 2019 inspection KPMG LLP. PCAOB.
Ralston, D. A., Cunni, M. K. V., & Gustafson, D. J. (1995). Cultural accommodation: The effect of language on the responses of bilingual Hong Kong Chinese managers. Journal of Cross-Cultural Psychology, 26, 714–727.
Ralston, D. A., Egri, C. P., Furrer, O., et al. (2014). Societal-level versus individual-level predictions of ethical behavior: A 48-society study of collectivism and individualism. Journal of Business Ethics, 122, 283–306.
Ramírez-Esparza, N., & García-Sierra, A. (2014). The bilingual brain: Language, culture and identity. In V. Benet-Martinez & Y. Y. Hong (Eds.), Handbook of multicultural identity: Basic and applied perspectives (pp. 35–36). Oxford University Press.
Ramírez-Esparza, N., Gosling, S. D., Benet-Martinez, V., Potter, J. P., & Pennebaker, J. W. (2006). Do bilinguals have two personalities? A special case of cultural frame switching. Journal of Research in Personality, 40, 99–120.
Ramsey, R. P., Marshall, G. W., Johnston, M. W., & D. R. D-Schmelz. (2007). Ethical ideologies and older consumer perceptions of unethical sale tactics. Journal of Business Ethics, 70, 171–207.
Roussy, M., & Rodrigue, M. (2018). Internal audit: Is the ‘third line of defense’ effective as a form of governance? An exploratory study of the impression management techniques chief audit executives use in their annual accountability to the audit committee. Journal of Business Ethics, 151, 853–869.
Saiewitz, A., & Wang, E. (2020). Using cultural mindsets to reduce cross-national auditor judgment differences. Contemporary Accounting Research, 37(3), 1854–1881.
Schultz, J., Johnson, D., Morris, D., & Dyrnes, D. (1993). An investigation of the reporting of questionable acts in an international setting. Journal of Accounting Research, 31(Supplement), 75–103.
Securities and Exchange Commission (SEC). (2020). Spotlight on financial reporting and audit (FRAud) group. Available at https://www.sec.gov/spotlight/financial-reporting-and-audit-task-force.shtml
Simnett, R., & Trotman, K. T. (2018). Twenty-five-year overview of experimental auditing research: Trends and links to audit quality. Behavioral Research in Accounting, 30(2), 55–76.
Sims, R. L. (2009). Collective versus individualist national cultures: Comparing Taiwan and U.S. employee attitudes toward unethical business practices. Business and Society, 48(1), 39–59.
Spence, C., Zhu, J., Endo, T., & Matsubara, S. (2017). Money, honour and duty: Global professional service firms in comparative perspective. Accounting, Organizations and Society, 62, 82–97.
Spira, L. F., & Page, M. (2003). Risk management: The reinvention of internal control and the changing role of internal audit. Accounting, Auditing and Accountability Journal, 16(4), 640–661.
Srivastava, S., Singh, S., & Dhir, S. (2020). Culture and international business research: A review and research agenda. International Business Review, 29(4), 101709.
Sung, Y., & Choi, S. M. (2010). The influence of self-construal on self-brand congruity in the United States and Korea. Journal of Cross-Cultural Psychology, 43(1), 151–166.
Sweeney, B., & Costello, F. (2009). Moral intensity and ethical decision-making: An empirical examination of undergraduate accounting and business students. Accounting Education: An International Journal, 18(1), 75–97.
Taghavi, S., & Segalla, M. (2023). Is work an act of worship? The impact of implicit religious beliefs on work ethic in secular vs. religious cultures. Journal of Business Ethics. https://doi.org/10.1007/s10551-023-05325-z
Tank, A. K., & Farrell, A. M. (2019). Is neuroaccounting taking a place on the stage? A review of the influence of neuroscience on accounting research. European Accounting Review, 31(1), 173–207.
Tavakoli, A. A., Keenan, J. P., & Cranjak-Karanovic, B. (2003). Culture and whistleblowing: An emprical study of Croatian and United States managers utilizing Hofstede’s cultural dimensions. Journal of Business Ethics, 43(2), 49–64.
Tenzer, H., Pudelko, M., & Zellmer-Bruhn, M. (2021). The impact of language barriers on knowledge processing in multinational teams. Journal of World Business, 56(2), 1–16
The Institute of Internal Auditors (IIA). (2018). Code of ethics. https://global.theiia.org/standards-guidance/Public%20Documents/IPPF_Code_of_Ethics_01-09.pdf
The Telegraph. (2013). China must not rely on whistle-blowing mistresses to expose corrupt officials. http://www.telegraph.co.uk/news/worldnews/asia/china/10086393/China-must-not-rely-on-whistle-blowing-mistresses-to-expose-corrupt-officials.html
The U.S. Census Bureau. (2022). Top trading partners. https://www.census.gov/foreign-trade/statistics/highlights/toppartners.html
The World Bank. (2017). The World Bank in China. http://www.worldbank.org/en/country/china/overview
Trongmateerut, P., & Sweeney, J. T. (2013). The influence of subjective norms on whistle-blowing: A cross-cultural investigation. Journal of Business Ethics, 112(3), 437–451.
Valentine, S., & Godkin, L. (2019). Moral intensity, ethical decision making, and whistleblowing intention. Journal of Business Research, 98, 277–288.
Veltkamp, G. M., Recio, G., Jacobs, A. M., & Conrad, M. (2012). Is personality modulated by language? International Journal of Bilingualism, 17(4), 496–504.
Verwey, I. G. F., & Asare, S. K. (2022). The joint efect of ethical idealism and trait skepticism on auditors’ fraud detection. Journal of Business Ethics, 176, 381–395.
Vishkin, A., Kitayama, S., Berg, M. K., Diener, E., Gross-Manos, D., Ben-Arieh, A., & Tamir, M. (2023). Adherence to emotion norms is greater in individualist cultures than in collectivist cultures. Journal of Personality and Social Psychology, 124(6), 1256–1276.
Vitolla, F., Raimo, N., Rubino, M., & Garegnani, G. M. (2021). Do cultural differences impact ethical issues? Exploring the relationship between national culture and quality of code of ethics. Journal of International Management, 27(1), 100823.
Yang, K., & Bond, M. H. (1980). Ethnic affirmation by Chinese bilinguals. Journal of Cross-Cultural Psychology, 11(4), 411–425.
Yin, J., & Quazi, A. (2018). Business ethics in the Greater China region: Past, present and future research. Journal of Business Ethics, 150, 815–835.
Zhang, J. (2018). Public governance and corporate fraud: Evidence from the recent anti-corruption campaign in China. Journal of Business Ethics, 148, 375–396.
Zhang, J., Chiu, R., & Wei, L. (2009). Decision-making process of internal whistleblowing behavior in China: Empirical evidence and implications. Journal of Business Ethics, 88, 25–41.
Zhang, J., Pany, K., & Reckers, M. J. (2013). Under which conditions are whistleblowing “best practices” best? Auditing: A Journal of Practice and Theory, 32(3), 171–814.
Zhang, Y., De Zoysa, A., & Cortese, C. (2020). The directionality of uncertainty expressions and the foreign language effect: Context and accounting judgment. Meditari Accountancy Research, 28(3), 543–563.
Zheng, B. Z., Patel, C., & Evans, E. (2019). The influence of construal of self on internal auditors’ judgments on whistleblowing: Evidence from China. Journal of International Auditing, 23, 73–85.
Zhuang, T., & Miller, D. (2005). Examining culture’s effect on whistle-blowing and peer reporting. Business and Society, 44(4), 462–486.
Acknowledgements
We thank Professor Graeme Harrison, Professor Nonna Martinov-Bennie, Professor Patrick Garcia, Professor Grant Richardson, Professor Shiqiao Zheng, Professor Christian Nielsen, Professor Yingfei Liu, Dr Bella Zheng, Professor Huayun Zhai, Professor Noriyuki Tsunogaya, Professor Qingliang Tang, Professor Simone Scagnelli, Professor Milind Sathye, Ms Angela Yu, Professor Stella Huiying Wu, Dr Steven Wu, Dr Sammy Ying and Dr Andreas Hellmann for their helpful comments and suggestions. We gratefully acknowledge the support from Macquarie University and Nanjing Audit University.
Author information
Authors and Affiliations
Corresponding author
Ethics declarations
Conflict of interest
No potential conflict of interest is reported by the authors.
Ethical Approval
All procedures performed in this study involving human participants were in accordance with the ethical standards of our respective institution.
Informed Consent
Informed consent was obtained from all individual participants included in the study.
Additional information
Publisher's Note
Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.
Rights and permissions
Springer Nature or its licensor (e.g. a society or other partner) holds exclusive rights to this article under a publishing agreement with the author(s) or other rightsholder(s); author self-archiving of the accepted manuscript version of this article is solely governed by the terms of such publishing agreement and applicable law.
About this article
Cite this article
Pan, P., Patel, C. Do Internal Auditors Make Consistent Ethical Judgments in English and Chinese in Reporting Wrongdoing?. J Bus Ethics (2024). https://doi.org/10.1007/s10551-024-05629-8
Received:
Accepted:
Published:
DOI: https://doi.org/10.1007/s10551-024-05629-8