The Importance of Ethical Leadership in the Accounting Industry

The purpose of this study was to examine a multivariate model for predicting leader effectiveness that included both the assessment of the contribution of ethical leadership in predicting the effectiveness of a leader, as well as the impact of related variables that may moderate the relationship between a leader's ethical behaviors and leader effectiveness. Moderating variables included employee preferences and expectations for ethical leadership and the perceived ethical climate of an organization. The study examined leaders within the accounting profession. The research has provided evidence that leaders who are ethical and transformational are more effective, and each of these behaviors can incrementally contribute to explaining and predicting the effectiveness of a leader. The research has not supported the theory that (a) subordinates' preferences and expectations for ethical leadership or (b) the perceived ethical climate of an organization moderated the relationship between a leader's ethical leadership behaviors and the perceived leader's effectiveness. Additional research is encouraged that assists academics and practitioners in determining how these combined leadership qualities may be further developed in leaders to add to their overall effectiveness. Further research, specifically in the accounting profession, is encouraged to restore a profession tarnished with accusations of unethical behavior to one that regains its original prominence based on moral, ethical, and effective leaders.