AUDITOR’S ETHICAL JUDGEMENTS: ASSESSING THE EFFECT OF ETHICAL SENSITIVITY AND ETHICAL CLIMATE

  • Aida Hazlin Ismail Faculty of Accountancy, Universiti Teknologi MARA
  • Takiah Mohd Iskandar Accounting Research Institute, Universiti Teknologi MARA
  • Zuraidah Mohd Sanusi Accounting Research Institute, Universiti Teknologi MARA
  • Zaleha Abdul Shukor Faculty of Economics and Management, The National University of 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
Published
Dec 23, 2016
How to Cite
ISMAIL, Aida Hazlin et al. AUDITOR’S ETHICAL JUDGEMENTS: ASSESSING THE EFFECT OF ETHICAL SENSITIVITY AND ETHICAL CLIMATE. Management & Accounting Review (MAR), [S.l.], v. 15, n. 2, p. 185-207, dec. 2016. ISSN 2550-1895. Available at: <http://arionline.uitm.edu.my/ojs/index.php/MAR/article/view/595>. Date accessed: 30 nov. 2022. doi: http://dx.doi.org/10.24191/mar.v15i2.595.