FOR THE ACCOUNTING PROFESSION, LEADERSHIP MATTERS REGARDING ETHICAL CLIMATE PERCEPTIONS

Abstract

We tested the hypothesis advanced by Mannarelli (2006) and Early and Davenport (2010) that professional accounting organizations would benefit from a transformational leadership style. Eleven CPA firms were surveyed to test the correlative relationship between three perceived leadership styles (i.e., transformational, transactional, and passive-avoidant) and the workplace ethical climate (i.e., caring, law code, rules, instrumental, and independence). Using the Multifactor Leadership Questionnaire (Bass & Avolio, 2010) and the Ethical Climate Questionnaire (Victor & Cullen, 1988), data provided by 103 respondents showed that transformational leadership style is the most effective, transactional is not effective, and passive-avoidant leadership style is deleterious to subordinates’ perception of the preferred ethical climates.