Name : Bima Aditya N

Class/ ID : Accounting /008201300016

Are You Satisfied With Your Pay When You Compare? It Depends on Your
Love of Money, Pay Comparison Standards, and Culture

Roberto Luna-Arocas • Thomas Li-Ping Tang

Critical Review

1. Motivation of article
The motivation of the author of this article is the author wanted to examine about pay
satisfaction, love on a money motive and pay comparison standards.
2. Theory
Love of Money : Mitchell and Mickel (1999) concluded that the Money Ethic Scale
(MES, Tang 1992, 1993, 1995; Tang and Gilbert 1995) is one of the three most
carefully developed and systematically used money attitudes.
Equity Comparison : In the compensation literature, high-income individuals
consistently have high pay satisfaction (Heneman 1992; Heneman and Schwab 1985).

3. Logic behind the hypothesis

H1 The relationship between income and pay equity comparison satisfaction is stronger
for American professors than for Spanish professors.
H2 : There is a positive relationship between income and the love of money for
American professors, but not for Spanish professors.
H3 : There is a positive relationship between love of money and the pay equity
comparison standards for American professors, but not for Spanish professors.
H4 : The negative relationship between pay equity comparison standards and the pay
equity comparison satisfaction is stronger for Americans than for Spanish professors.

4. Variable and Measurement

Variable: Independent
Sample: 207 American professors and 104 Spanish professors
Data collection: questionnaire
 Statistic tool: Multi-Group Confirmatory Factor Analysis (MGCFA) and Structural
Equation Modeling (SEM).
5. Result
Pay comparison satisfaction may have less to do with people’s income (absolute
amount), but more to do with their love of money, pay comparison standards, and
culture. Overall, individuals with high income have high pay comparison satisfaction.
This relationship is stronger for American professors than for thier Spanish
counterparts.
6. Conclusion
This research develop a mediated mediation theoretical model, examine the relationship
between income and pay comparison satisfaction, treat love of money and pay
comparison standards as two mediators, investigate the direct and the indirect paths of
its model simultaneously, and treat culture as a moderator based on a sample of
professors in the US and Spain.
7. Future Research
For the future research may want to expand the love of money construct (e.g.,Monetary
Intelligence, or money smart, Chen et al. 2013; Lemrova´ et al. 2013; Tang and Sutarso
2013), use longitudinal, objective and subjective/qualitative data from different
sources, and replicate these findings in different occupations, cultures, and countries to
enhance our understanding of the psychology of money.

Ethical Climate, Social Responsibility, and Earnings Management

William E. Shafer

Critical Review

1. Motivation of article
The motivation of the writer of this article is to complement previous research and examines
the relations among industry accountants ' perceptions of the ethical climate in their
organization, their views toward the importance of corporate ethics and social responsibility,
and earnings management decisions.
2. Theory
 Earnings Management : Merchant (1989) reported results from a survey using a questionnaire
to measure attitudes toward earnings management. This questionnaire, which became
influential in the accounting literature, contained thirteen earnings management scenarios

Ethical Climate : The model incorporates the Victor and Cullen (1987, 1988) multi-
dimensional conceptualization of organizational ethical climate, and includes multiple
measures of ethical decisions and behavioral intentions to provide a more refined assessment
of accountants’ ethical decision-making processes.

Perceived Importance of Ethics and Social Responsibility : Singhapakdi et al. (1996) developed
a scale to measure the perceived role of ethics and social responsibility (PRESOR) in
organizational success.

3. Logic behind the hypothesis

H1 : A stronger perceived emphasis on corporate profitability and the pursuit of self-interest

(collectively, an instrumental climate) will lead accountants to less strongly support the
importance of corporate ethics and social responsibility..
H2 : A stronger perceived emphasis on serving the public interest (benevolent/cosmopolitan
climate) and following laws or professional codes of conduct (principled/ cosmopolitan
climate) will lead accountants to more strongly support the importance of corporate ethics and
social responsibility.
H3 : Stronger support for the importance of corporate ethics and social responsibility will lead
professional accountants to judge aggressive actions as more unethical and decrease the
likelihood that they will express an intention to engage in similar actions.
H4 : Accountants’ ethical judgments regarding earnings management will influence their
expressed intentions of engaging in similar behavior.

4. Variable and Measurement

Variable: Independent

Sample: 211 respondents

Data collection: questionnaire

Statistic tool: SEM

5. Result
 H1 : The strong negative correlations between the instrumental climate dimension and both the
stockholder and stakeholder view dimensions of the PRESOR scale. (partially supported)

H2 : the benevolent/cosmopolitan and principled/cosmopolitan climate dimensions were

positively and significantly correlated with both the stockholder view and stakeholder view
dimensions, indicating that organizational concerns with serving the public interest and
following laws and professional codes of conduct are associated with stronger belief in the
importance of corporate ethics and social responsibility. (partially supported)

H3 : stronger belief in the importance of corporate ethics and social responsibility was
associated with more harsh ethical judgments and lower estimated likelihoods of engaging in

similar actions. (partially supported)

H4 : strong relationships documented between ethical judgments and behavioral intentions for
both operating and accounting manipulations. (fully supported)

6. Conclusion
These findings appear to have important practical implications. The emergence of
benevolent/cosmopolitan and principled/cosmopolitan climate dimensions in a sample of
industry accountants implies that, at least to some extent, traditional professional values
more closely associated with public accounting firms are also emphasized in corporate
accounting departments..
7. Future Research
For the next research, the writer should investigate the differential impacts of the stockholder
and stakeholder dimensions of the PRESOR scale on accountants’ ethical decision processes
and for the variables in the next research should be designed to provide a firm basis for
conclusions regarding causal relationships among the variables.