Could Community Service Morally License Dysfunctional Auditor Behavior?

Firm community service initiatives are popular and generally seen as positive developments. However, moral licensing theory suggests engaging in community service (acting morally) can facilitate subsequent immoral behavior, which could diminish audit quality. In a series of experiments with practicing auditors, we provide evidence that voluntary community service causes moral licensing, but mandatory service (i.e., participation in a firm-wide event) attenuates moral licensing. Compared to a control group, auditors who voluntarily committed to a service activity engaged in more dysfunctional audit behavior, but auditors who were told they would be participating in a firm-directed service event did not. Our study highlights an unintended consequence of employee volunteerism, and contributes to research on audit quality, and ethical behavior in professional settings.