Introduction
Ethical leadership and decision-making are of significance in the accounting sphere. Representatives of this field are expected to do their best to report financial information accurately and in accordance with established standards and regulations. Leaders should engage in these behaviors by themselves and promote them among their subordinates. That is why managers should select the most suitable leadership styles to ensure their efforts achieve the expected outcomes.
Furthermore, leaders should ensure that the selected strategies can be effectively used in the accounting sphere. A suitable approach to identifying appropriate leadership styles is to seek scientific evidence that addresses them. Scholarly articles and professional guidelines demonstrate that accounting leaders can successfully rely on transformational, authentic, and servant types.
Transformational Leadership
Transformational leadership is the first type that is included in this review. According to Mintz (2019), this approach is used to cause positive change among followers to help them achieve a particular objective. Such leaders can rely on multiple behaviors, including referring to subordinates’ sense of identity, acting as role models, and maximizing followers’ advantages (Mintz, 2019).
All these steps share a common goal: forcing subordinates to change a particular aspect of their behavior to achieve positive change. That is why such managers should be skillful motivators and communicators. Afsar and Umrani (2020) add that transformational leaders encourage and stimulate innovative approaches in the workplace. This information clearly demonstrates the basics of the selected leadership type, but additional analysis is necessary to determine how it fits the accounting industry.
It is necessary to focus on the accounting profession’s organizational culture and identify aspects that intersect with transformational leadership. According to Roulin and Krings (2020), continuous learning, innovation, and transparency are essential phenomena within the selected sphere. Such an organizational culture indicates that a Chief Financial Officer (CFO) is expected to ensure that their subordinates share these values.
In addition, it is reasonable to discuss the impact of gender on leadership. As Shailja and Singla (2023) state, women typically succeed in transformational leadership more than men because females have higher inclusive constructs. This term denotes that women accountants can rely on this type to achieve better results.
It is additionally reasonable to consider what external literature says about transformational leadership. On the one hand, the American Institute of Certified Public Accountants (AICPA) offers its Code of Professional Conduct, which describes responsibilities and recommendations for accountants’ professional behavior. According to this resource, the specialists should engage in planning and supervising professional services (American Institute of Certified Public Accountants [AICPA], 2020).
In other words, accountants should supervise services, identify weaknesses, and develop plans to mitigate their negative impact. Transformational leadership is suitable here because it helps managers introduce the desired changes in the workplace. On the other hand, one should determine what the Bible says about this approach. A suitable passage explains: “And we all, with unveiled face, beholding the glory of the Lord, are being transformed into the same image from one degree of glory to another” (English Standard Version Bible, 2001, 2 Corinthians. 3:18). The Holy Scripture shows that changing is a natural process, which denotes that leaders can promote it in accounting.
This analysis demonstrates that transformational leadership can be effectively applied in the accounting sphere. The rationale behind this statement is that this approach relies on a few values that are significant in the accounting profession. In particular, they include transparency, continuous learning, innovation, and improvement. That is why accountants can rely on the given strategy to succeed in the workplace and help their organization prosper.
Authentic Leadership
Authentic leadership is the second type that is discussed in this assignment. Mintz (2019) stipulates that such leaders possess a myriad of qualities, including optimism, resilience, courage, confidence, and high moral character. In general, such managers should have internal power that enables subordinates to listen to and follow this leader.
Such managers often act as role models, which denotes that followers are willing to emulate their behaviors (Mintz, 2019). This positive appraisal is possible since authentic leadership is closely correlated with emotional intelligence and high moral standards (Zhang et al., 2022). Mehmood et al. (2020) emphasize the importance of high moral standards and highlight the significant role of leaders’ self-awareness. Thus, managers should have all these features to become successful authentic leaders.
Now, it is reasonable to comment on the points of contact between the given leadership type and the organizational culture of the accounting profession. According to Cornacchione and Reginato (2021), organizational culture in the accounting sphere can be authoritarian and participative. The latter option still conveys that senior management receives respect and obedience in accordance with their authority and skills (Cornacchione & Reginato, 2021).
According to this information, the accounting profession values leaders who have the required internal skills and competencies to earn authority among subordinates. Authentic leadership is a suitable fit for this description because it denotes that a manager possesses these features while remaining altruistic in creating a common good for their organization (Mintz, 2019). This description demonstrates that if a CFO follows the selected leadership type, they are likely to succeed in the accounting industry.
Furthermore, gender should not be ignored in this context. Authentic leadership means that a person’s impact on followers depends on how followers perceive the leader. That is why the leader’s sex can significantly influence this aspect.
Although Zhang et al. (2022) note slight differences between males and females in the use of authentic leadership, Mehmood et al. (2020) report more successful outcomes among men. The rationale behind this state of affairs is that men are typically considered more knowledgeable and experienced than women. This statement is not always true, but the stereotype leads females to struggle to be authentic leaders.
One can also argue that the AICPA regulation and the Bible support authentic leadership. First, the Code of Professional Conduct demonstrates that specialists are expected to possess professional competence and to provide adequate services and care (American Institute of Certified Public Accountants [AICPA], 2020). This description is suitable for authentic leaders who rely on specific personal qualities to establish high standards of practice and service.
Second, the Bible offers a significant passage that justifies selecting the given leadership approach: “By his good conduct let him show his works in the meekness of wisdom. But if you have bitter jealousy and selfish ambition in your hearts, do not boast and be false to the truth” (English Standard Version Bible, 2001, James 3:13-14). This statement implies that people should possess specific characteristics to be respected and valued.
The investigation above has demonstrated that authentic leadership is suitable for the accounting profession. This approach relies on qualities such as resilience, optimism, self-awareness, and emotional intelligence. All of them are significant because they guarantee that subordinates respect their leader and are ready to follow them. Thus, if authentic leaders want to succeed in the accounting industry, they need to develop their internal competencies and skills to gain more authority among followers.
Servant Leadership
The third leadership type is essentially different from traditional approaches. People tend to believe that leaders control, inspire, and direct others. However, servant leadership is peculiar because its basic premise states that “leaders should put the needs of followers before their own needs” (Mintz, 2019, p. 493). That is why managers rely on persuasion and collaboration to establish a trusting and ethical environment in an organization (Mintz, 2019).
According to Eva et al. (2019), servant leaders consider themselves stewards of a company, which motivates them to satisfy employees’ desires. The rationale for selecting this leadership approach is that people tend to be more effective and engaged in their work when they see that their growth and well-being are prioritized (Eva et al., 2019). One can also argue that this type is associated with self-sacrifice because managers are expected to prioritize others’ preferences and needs over their own.
The organizational culture in the accounting sphere has several key features that make servant leadership a suitable choice. According to Roulin and Krings (2020), honesty and agreeableness are significant values in this environment. In turn, these two phenomena lead to the establishment of trust, which is one of the most crucial factors in fostering productive relationships between leaders and their subordinates (Mintz, 2019). Thus, a CFO can successfully implement servant leadership if their organization impresses with these values.
Additionally, the choice and effectiveness of the given approach significantly depend on the leader’s gender. Various scholarly articles demonstrate that men and women can be significantly different in their roles. Eva et al. (2019) suggest that females are more likely to succeed in servant leadership because they are more often engaged in organizational stewardship, emotional healing, and altruism, which are characteristic of this leadership style. Shailja and Singla (2023) support this notion, mentioning that females are more likely to prefer people-oriented leadership, including the servant approach. Thus, a leader’s gender can significantly impact the approach chosen and its effectiveness.
The following aspect of this analysis focuses on the connection between servant leadership and the AICPA’s Code of Professional Conduct. According to this document, accountants should “act in a way that will serve the public interest, honor the public trust, and demonstrate a commitment to professionalism” (American Institute of Certified Public Accountants [AICPA], 2020, p. 5). Thus, serving is an essential component of the accounting profession, indicating that these specialists can benefit from adopting the leadership approach under consideration.
One should also note that the Bible justifies and supports the use of servant leadership. In particular, the Holy Scripture says that “even as the Son of Man came not to be served but to serve, and to give his life as a ransom for many” (English Standard Version Bible, 2001, Mathew. 20:28). This quotation demonstrates that serving others is a significant responsibility, which denotes that accounting leaders can rely on this practice to deal with their followers.
Based on the discussion above, it is clear that servant leadership can be a suitable approach for accountants. This style can only be successful if a leader is collaborative, communicative, and ready to value others’ needs above their own. This strategy is effective because employees understand they are respected and valued, which, in turn, leads to increased satisfaction, improved well-being, and greater engagement in their work.
Personal Responsibility, Professional Role, and Whistleblowing
Irrespective of the chosen leadership approach, it is vital to ensure that public trust in the accounting profession is enhanced. The rationale for this statement is that failed audits sometimes occur. On the one hand, this issue occurs since some unethical accountants agree to falsify information (Mintz, 2019). On the other hand, unintentional errors can occur because the subjective nature of accounting influences it. This description refers to an unconscious bias that arises when there are tight connections between accounting firms and their clients (Mintz, 2019).
This bias is dangerous because it can cause auditors to unintentionally distort figures, thereby misrepresenting an organization’s financial health. That is why accountants should understand their personal responsibility in making audits properly. For this purpose, these specialists should develop the skills and expertise to address the challenges and biases inherent in their professional role.
Additionally, whistleblowing is an effective way to enhance public trust. Since financial wrongdoing is common, an organization should encourage its employees to report such cases. Mintz (2019) stipulates that ethical leadership and providing support to reporters encourage individuals to engage in this activity. In many cases, people avoid whistleblowing because reporters often face negative consequences. That is why leaders are responsible for establishing a culture that promotes honesty, trust, and reporting. In this case, whistleblowing will be an acceptable practice that will help earn public trust.
Recommendations
Given the importance of public trust and ethical leadership in the accounting profession, specific recommendations are needed to promote these values. First, accountants should choose an appropriate leadership style and follow it in leading their followers. The current assignment has discussed three approaches, but it is impossible to state which one is better. The choice depends on a company’s organizational culture and a leader’s personal qualities. It appears that transformational leadership is effective because it enables a manager to introduce expected behaviors and avoid negative practices.
Second, irrespective of the chosen leadership type, accountants should promote honesty in the workplace. If employees behave honestly and ethically towards one another, the public will notice and appreciate it. Third, leaders should promote whistleblowing in the workplace, as this practice helps identify and resolve auditing errors rather than hiding them.
Conclusion
This assignment has presented a comprehensive analysis of ethical leadership and decision-making in the accounting profession. Evidence from the textbook, scholarly articles, and professional guidelines helped determine the basic concepts of three leadership types, including transformational, authentic, and servant leadership. All these approaches are perfectly aligned with the accounting organizational culture and professional standards; however, the choice of a particular style should depend on the leader’s gender and personal qualities. In addition, the paper has determined that building public trust is significant for the accounting profession. That is why leaders and their followers should understand their personal responsibilities and professional expectations, including whistleblowing.
References
Afsar, B., & Umrani, W. A. (2020). Transformational leadership and innovative work behavior: The role of motivation to learn, task complexity, and innovation climate. European Journal of Innovation Management, 23(3), 402-428.
American Institute of Certified Public Accountants. (2020). Code of professional conduct.
Cornacchione, E., & Reginato, L. (2021). Agent-based model and management accounting: Culture-contingent managerial behavior in light of budgetary constraints. Advances in Scientific and Applied Accounting, 14(3), 172-191.
English Standard Version Bible. (2001). ESV Online.
Eva, N., Robin, M., Sendjaya, S., Van Dierendonck, D., & Liden, R. C. (2019). Servant leadership: A systematic review and call for future research. The Leadership Quarterly, 30(1), 111-132.
Mehmood, Q., Hamstra, M. R., & Schreurs, B. (2020). Employees’ perceptions of their manager’s authentic leadership: Considering managers’ political skill and gender. Personnel Review, 49(1), 202-214.
Mintz, S. (2019). Ethical obligations and decision-making in accounting: Text and cases (5th ed.). McGraw-Hill Higher Education (US).
Roulin, N., & Krings, F. (2020). Faking to fit in: Applicants’ response strategies to match organizational culture. Journal of Applied Psychology, 105(2), 130-145.
Shailja, P. K., & Singla, H. (2023). Impact of servant leadership on innovative work behavior: A moderation mediation analysis. Leadership & Organization Development Journal, 44(3), 330-349.
Zhang, Y., Guo, Y., Zhang, M., Xu, S., Liu, X., & Newman, A. (2022). Antecedents and outcomes of authentic leadership across culture: A meta-analytic review. Asia Pacific Journal of Management, 39(4), 1399-1435.