With the upcoming publication of Responsible Finance and Accounting: Performance and profit for better business, society and planet with publishers Routledge, a spotlight on contributor Professor Qinqin Zheng, School of Management Fudan University, and her research insight included in the book.
Companies Have an Inherent Motivation to Be Good: Can accounting firms influence that? A spotlight on Prof. Qinqin Zheng’s research included in the book Responsible Finance and Accounting: Performance and profit for better business, society and planet.
Qinqin Zheng’s research has been published in many highly regarded research journals on an international level. A professor of business administration at the prestigious School of Management Fudan University, China, her research has explored many facets of the world of business and management and its impact on wider society.
For this first book in the Routledge-CoBS collection, Professor Zheng offers an insight based on her research originally published in the Journal of Business Ethics* exploring whether the special ties between accounting firms and their clients can influence ethical – or unethical – behaviours.
Featured in the new book, prof. Zheng’s insight For Better or for Worse? The special ties between accounting firms and their clients – influence and behaviours provides readers with an empirically-researched view of this crucial, though complex business relationship.
Influence – yes. But not how you might have thought
For Professor Zheng, three points in particular can be drawn from the book insight. First, that through their professional expertise and proximity to their client and financial information, accounting firms have the capabilities to detect clients’ unethical accounting information disclosure.
However, her research finds that the rate of unethical behaviour is not – as we might have thought – significantly reduced by accounting firms with higher capabilities and qualifications.
Instead, according to Prof. Zheng, a longer duration of relationships between the accounting firm and the client is associated with a significant reduction in the rate of unethical information disclosure by listed companies.
“These takeaways are important in the context of responsible finance & accounting as they go beyond some of the traditional perceptions on accounting firms such as collusion and capability discrimination,” says Prof. Zheng. Indeed, “accounting firms,” she continues, “as important others in a firm’s ecosystem, can impose positive influence on the behaviours of clients from the perspective of virtue ethics.”
In addition, accounting firms typically possess professional codes of conduct which, points out Prof. Zheng, primarily pay attention to accounting firms’ self-regulation – also serving to have further effect through accounting firms to their clients.
“Companies have an inherent motivation to be good,” states Prof. Zheng. And as such, ethical important others in their sphere of stakeholders – such as accounting and audit firms – can improve corporate moral standards and help to create a virtuous cycle.”
* The Influence of Accounting Firms on Clients’ Immoral Behaviors in China, Qinqin Zheng & Zhiqiang Li, Journal of Business Ethics (2010) 91:137–149 _ Springer 2010 DOI 10.1007/s10551-010-0572-4.
By strengthening the professionalism and ethical standards of accounting firms, Prof. Qinqin Zheng believes that the quality of financial reporting will be enhanced. With the positive result that companies will be more likely to engage in responsible and sustainable business practices.
- Included in the book Responsible Finance and Accounting: Performance and profit for better business, society and planet: For Better or for Worse? The special ties between accounting firms and their clients – influence and behaviours, Qinqin Zheng, School of Management Fudan University. Discover.
- Read another CoBS Insights article by Prof. Qinqin Zheng: Ethics & Compliance: Why it happens and what makes it effective
Learn more about the Council on Business & Society
The Council on Business & Society (The CoBS), visionary in its conception and purpose, was created in 2011, and is dedicated to promoting responsible leadership and tackling issues at the crossroads of business and society including sustainability, diversity, ethical leadership and the place responsible business has to play in contributing to the common good.
Member schools are all “Triple Crown” accredited AACSB, EQUIS and AMBA and leaders in their respective countries.
- ESSEC Business School, France-Singapore-Morocco
- FGV-EAESP, Brazil
- School of Management Fudan University, China
- IE Business School, Spain
- Keio Business School, Japan
- Stellenbosch Business School, South Africa
- Trinity Business School, Trinity College Dublin, Ireland
- Warwick Business School, United Kingdom.