Volume 15 No. 2, December 2016
ARTICLE INFO
Article History:
Received: 24 March 2016
Accepted: 28 October 2016
Published: 23 December 2016
MANAGEMENT AND ACCOUNTING REVIEW, VOLUME 15 NO. 2, DECEMBER 2016
Auditor’s Ethical Judgements: Assessing the Effect of Ethical Sensitivity and Ethical Climate
Aida Hazlin Ismail1, Takiah Mohd Iskandar2, Zuraidah Mohd Sanusi2 and Zaleha Abdul Shukor3
1Faculty of Accountancy,
Universiti Teknologi MARA, Malaysia
2Accounting Research Institute,
Universiti Teknologi MARA, Malaysia
3Faculty of Economics and Management,
The National University of Malaysia, Malaysia
1Faculty of Accountancy,
Universiti Teknologi MARA, Malaysia
2Accounting Research Institute,
Universiti Teknologi MARA, Malaysia
3Faculty of Economics and Management,
The National University of Malaysia, Malaysia
ABSTRACT
This study examined effects of ethical sensitivity and ethical climate on auditors’ ethical judgements. The study employed a ‘between subjects’ experimental design to assess auditors’ judgements on ethical dilemmas relating to issues of independence and confidentiality. Participants consist of 146 auditors from Big 4 and Non Big 4 firms. Results showed ethical sensitivity had a significant positive effect on auditors’ ethical judgements. However, the effect of ethical sensitivity on auditors’ ethical judgements was moderated by the ethical climate of the firm. The positive effect of ethical sensitivity is stronger in higher ethical climate.
Keywords: ethical judgements, International Standards of Quality Control (ISQC) 1, ethical climate, ethical sensitivity, independence and confidentiality
Keywords: ethical judgements, International Standards of Quality Control (ISQC) 1, ethical climate, ethical sensitivity, independence and confidentiality