Collusive Accounting Supervision and Economic Culture

Abstract

ABSTRACT Supervisors who manipulate accounting information to their advantage may seek the cooperation of subordinates, who depend on them for career advancement and direction, in order to navigate their way through their organization's controls. In this way, accounting supervisors influence not only the end users of accounting information, but also subordinates who learn about the accounting profession from them. In investigating collusive supervision, I utilize a field-based instrument and a sample of practicing accounting supervisors. I find that accounting supervisors' behavioral intentions to encourage their subordinates to collude in manipulating accounting information are influenced by attitudes, perceived behavioral control, subjective norms, and materialism. I investigate cultural influences on these relationships. I find that power distance and collectivism increase the likelihood that an accounting supervisor will encourage subordinates to collude in manipulating accounting information. Uncertainty avoidance, or rule orientation, decreases the likelihood. Partial least squares (PLS) path modeling illustrates direct and indirect cultural effects. The findings suggest that adding relevant cultural variables to the Theory of Planned Behavior and considering related mediation effects can increase the framework's capacity to explain behaviors in international or cross-cultural settings. Ramifications for subordinates, educators, the accounting profession, organizations, and policy makers are discussed.

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