This study examines the relationship between a number of goal characteristics and the propensity of divisional managers to create budgetary slack. These goal characteristics are variables in goal clarity and goal difficulty. Managers also consider communication and reward systems -which are significant factors affecting the relationship between goal characteristics and propensity to create budget slack. The communication and reward systems are affected by influencing power of managers, required explanation of budget variance, budgetary feedback, peer relations, and relationship between superiors and subordinates. Using a sample of 108 hotel managers in Macau, the findings indicate that the clear communication and reward systems can result in goal clarity and can help to solve budgeting problems under difficult goal situations. The implications of these findings are discussed in relation to the design of budgeting systems. The need to integrate results and develop frameworks for future research is noted.

Purpose -The purpose of the study is to investigate the factors that may result in a high turnover rate of auditors in Macau. The factors considered include client importance, task complexity, time budget constraints, auditor independence and acceptance of dysfunctional behaviour by Macau's audit firms. Design/methodology/approach -This study involved three stages. In the first stage, interviews were carried out with auditors from Big-4 (seven interviewees) and local non-Big-4 firms (three interviewees) in Macau to investigate the reasons for the high turnover rate amongst auditors in Macau. They were asked to speculate about common explanatory factors. The second stage involved 141 auditors from Big-4 and local non-Big-4 accounting firms who were asked to complete a questionnaire survey for the explanatory factors. A total of 135 usable questionnaires were included in the multiple regression data analysis. The third stage of research comprised follow-up interviews aimed at learning more about the reasons for dysfunctional behaviour. Findings -This research provides valuable information for audit firms in Macau and will potentially help them to reduce their turnover rate and identify the factors affecting dysfunctional behaviour amongst auditors. The results extend the literature by focusing on the effect of perceived responsibility on professional responses to time budget pressures, task complexity, pressure from clients, and professional and ethical issues. Practical implications -The challenge facing auditors today is to expand their auditing practices and evolve standards for adequately monitoring the operations of business entities. The current high turnover rate alarms audit firms, which are concerned with training and the provision of sufficient resources to solve the problems that auditors face in the workplace. Originality/value -This is the first paper to examine the reason for turnover intentions in Macau. This study sheds light on the factors that contribute to individual auditor differences in the acceptance of dysfunctional behaviour that may result from the stressful nature of their duties.

PurposeThe purpose of this study is to examine the influence of factors affecting students’ choice of accounting as a study major in Hong Kong.Design/methodology/approachMultinomial logistic regression and Hierarchical Generalized Linear Modeling (HGLM) are used to analyze the survey data for the level one and level two data, which is the first time such an approach has been used in the literature. Twenty semi‐structured interviews are conducted.FindingsResults reveal that parental influence has the highest explanatory power among all three groups of students (i.e. accounting major, accounting minor, and other majors). This finding reflects the inculcation in students of the Confucian cultural norms ingrained in Chinese societies. Intrinsic interest is the second most important influencing factor reported by students. Two factors, “intrinsic interest” (attitude towards the behavior) and “parental influence” (subjective norm) in the multinomial logistic regressions and HGLM make significant contributions to predicting a student's decision to major in accounting for the level one (undergraduate) and level two model (master's students). The results support the theory of reasoned action (TRA) model. “First accounting course,” “high school accounting,” and “financial rewards” are not found to be factors influencing the decision to major in accounting, in contrast to the findings of the literature prior to the Enron scandal. Females are more likely to choose accounting as a major or minor than are males in the level one and level two models.Practical implicationsThe findings indicate that Hong Kong universities and the Hong Kong Institute of Certified Public Accountants (HKICPA) need to promote accounting to improve the current negative image of the profession to attract more bright students, who traditionally might choose a non‐accounting major.Originality/valueThe findings of this study extend the application of the TRA model to the accounting profession. Besides, results provide insights for employers to better understand the mindsets of potential accounting graduates.

Purpose The purpose of this study is to investigate whether corporate social responsibility (CSR) can lower tax risk. Previous studies have demonstrated a negative link between CSR and tax aggressiveness. Generally, corporations engaging in social irresponsibility tend to undertake aggressive tax planning; whereas socially responsible firms enjoy tax savings. Because several recent studies have suggested that lower tax payments do not necessarily create higher tax risk, an exploration of the relationship between CSR and tax risk was not only interesting but also important. Design/methodology/approach Using an ethical perspective of CSR, this paper argues that executives who are nourished by an ethical climate tend to make responsible and reliable operating decisions. Therefore, their corporations would have better control of tax administration, and the corresponding tax risk would be constrained. Such corporations would enjoy greater tax savings while keeping their tax risk at relatively low levels. However, this reasoning ignores the fact that limited economic resources would constrain a firm from practicing CSR in the form of donations. This situation would also influence its attitude toward tax strategies. Specifically, when a firm’s performance is unsatisfactory, the cultural effect of CSR may diminish or even disappear. Findings Firms donating additional resources to CSR activities can construct a more ethical work climate that encourages executives to control tax risk while lowering tax expenses. For firms with unsatisfactory performance, the ethical benefits of CSR could disappear, thus suggesting a relationship with firm performance. This finding contributes to the knowledge on the ethical implications of CSR and proposes that the culture argument is conditional on satisfactory firm performance. Originality/value This study explores the association between corporate culture (CSR) and tax risk. The empirical results help shareholders, analysts and other investors to make their business decision better because CSR or corporate culture is less likely to change suddenly or dramatically in an abbreviated time. The finding of this study shed light on the importance of corporate culture on making an investment evaluation or decision. In addition, this study extends the research on CSR by demonstrating that the effects of CSR are conditioned on firm performance. The beneficial effect of CSR on tax risk would disappear when firms have unfavorable financial performance.

PurposeNumerous accounting studies have investigated the effects of participatory budgetary processes. The job satisfaction of participating employees is one of the most frequently researched issues. Increased employee participation in budgeting widens the responsibilities and experience of employees. However, it might also increase the level of task difficulty and reduce task clarity. The purpose of this study is to design an improved budgeting system for subordinates so as to enhance job satisfaction in a working environment of difficult task setting and low goal clarity.Design/methodology/approachThe present paper employs two models (direct and indirect) to investigate the level of employee satisfaction during budgetary participation, focusing on the hotel industry in Macau.FindingsThe direct model suggests that task difficulty and clarity do not directly affect satisfaction levels among employees during budgetary participation. However, the indirect model suggests that, under conditions of increased task difficulty and unclear goal situations, the level of job satisfaction is mediated indirectly through the influence of four core dimensions (budget variety, autonomy, task identity, and feedback). The study thus finds that improved design of budgetary processes, taking account of four core dimensions (budget variety, autonomy, task identity, and feedback), produces greater job satisfaction among employees who are desirous of satisfying higher‐order needs. Moreover, these employees are rated by superiors as performing higher‐quality work during the budgetary process.Originality/valueThe paper contributes to the budgeting literature in several ways. It confirms the beneficial effect of improved budgetary design in enhancing employees' job satisfaction in a working environment of task difficulty and unclear goal setting, which is particularly important in the hotel industry and other service sectors. The paper also extends the literature that has hitherto typically focused on the examination of factors that affect the level of employees' job satisfaction, and recognizes the importance of budgetary design to job satisfaction.