Using a sample of Portuguese privately-held firms, I examine the association between religiosity and financial reporting quality. The results suggest that firms headquartered in Portuguese areas with strong religious adherence and in the core area of the Portuguese religious cult (the district where the Fátima Sanctuary is located) generally experience lower incidence of earnings management. I provide further evidence that the results are robust to alternative measures of religiosity, and that are not driven by firms headquartered in rural areas. I also conclude that religious social norms, together with other forms of external financial monitoring, represent a mechanism for reducing costly agency conflicts. While the religious practice declined in the last decades in Portugal, I provide evidence that, even in a such context, religiosity is associated with reduced acceptance of unethical business practices, in particular, with reduced acceptance of aggressive accounting practices.

We revisit religiosity, gender, age, ethics education and experience as drivers of ethicality, while expanding prior research from Anglo-Saxon and Asiatic/Euro-Asiatic countries to a Latin European country, Portugal. We apply the Merchant (1989) instrument of attitudes towards earnings management, in a sample of Portuguese accounting students and alumni. We find no significant evidence of a positive association between religiosity and accountants' judgments on earnings management. However, gender, age, education (and accounting ethics education) and experience are significant predictors of accountants' judgments. The results are unchanged when we control for the intent (selfish benefit) of earnings management. Females, older individuals and alumni judge accounting earnings management more harshly than males, younger individuals, and students (who have not yet completed an accounting ethics course). A higher level of accounting work experience induces accountants to judge accounting earnings management as a less ethically questionable practice. This finding is theoretically relevant because it underscores the necessity of taking people's constraints in the workplace into consideration when studying ethical behavior in business contexts. The results are also practically relevant, as they highlight the importance of a systematic ethics education throughout the accountant's life.

This study uses a sample of 25 OECD countries to examine the association between CSR, national governance and tax evasion at the country level. The interaction between country-level governance and CSR relative to tax avoidance is also explored. The findings suggest that neither the ESG dimensions nor the overall CSR measure are significant determinants of tax evasion at the country level. In contrast, national governance quality is significantly and negatively related to tax evasion. Significant support is also found for the mediating effect of national governance on the association between CSR and tax evasion: in countries with weak national governance, CSR and country-level governance are substitutes; in countries with strong national governance, CSR reporting (in particular, environmental disclosures) seems to be used as a cosmetic and compensatory tool for firms to mitigate the reputational risk and public concern arising from tax evasion activities. The findings are theoretically and practically relevant as they underscore not only the importance of national governance in mitigating tax evasion but also the relevance of the mediating effect of national governance on the relationship between CSR and tax evasion. The evidence highlights the need for policymakers in countries with strong national governance to design new/strong anti-tax avoidance regulations.

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This study provides a comprehensive literature review of audit quality and it explores three decades of audit research (1980 to 2010). The DeFond and Zhang (2014) framework is used to present and discuss several perspectives on the concept and measures of audit quality, its inherent limitations and main strengths, adding a United States of America (U.S.) versus international studies comparative approach. The study is of interest to students, academic researchers, practitioners, standard setters/regulators and all those interested in understanding audit quality, from a U.S. versus international perspective.