Research On Professional Responsibility and Ethics in Accounting

Research on Professional Responsibility and Ethics in
Accounting
The Influence of Auditors’ Commitment to Independence Enforcement and Firms’
Ethical Culture on Auditors’ Professional Values and Behaviour
Itsaso Barrainkua, Marcela Espinosa-Pike,
Article information:
To cite this document: Itsaso Barrainkua, Marcela Espinosa-Pike, "The Influence
of Auditors’ Commitment to Independence Enforcement and Firms’ Ethical Culture
on Auditors’ Professional Values and Behaviour" In Research on Professional
Responsibility and Ethics in Accounting. Published online: 27 Mar 2018; 17-52.
Permanent link to this document:
Downloaded by INSEAD At 21:20 27 March 2018 (PT)
https://doi.org/10.1108/S1574-076520180000021002
Downloaded on: 27 March 2018, At: 21:20 (PT)
References: this document contains references to 0 other documents.
To copy this document: permissions@emeraldinsight.com
Access to this document was granted through an Emerald subscription provided by
emerald-srm:178665 []
For Authors
If you would like to write for this, or any other Emerald publication, then please
use our Emerald for Authors service information about how to choose which
publication to write for and submission guidelines are available for all. Please visit
www.emeraldinsight.com/authors for more information.
About Emerald www.emeraldinsight.com
Emerald is a global publisher linking research and practice to the benefit of society.
The company manages a portfolio of more than 290 journals and over 2,350 books
and book series volumes, as well as providing an extensive range of online products
and additional customer resources and services.
Emerald is both COUNTER 4 and TRANSFER compliant. The organization is a partner
of the Committee on Publication Ethics (COPE) and also works with Portico and the
LOCKSS initiative for digital archive preservation.
*Related content and download information correct at time of download.

The Influence of
Auditors’ Commitment to
Independence Enforcement
and Firms’ Ethical Culture
on Auditors’ Professional
Values and Behaviour
Itsaso Barrainkua and Marcela Espinosa-Pike
Abstract
This study explores auditors’ professional attitudes and behaviours. It tests

the influence of public interest commitment, independence enforcement
beliefs and organisational ethical culture on auditors’ acceptance of and
engagement in practices that compromise their objectivity. The study is
based on survey responses of 122 Spanish auditors. To analyse the com-
bined effect of the variables under study, variance-based structural equation
modelling (partial least squares, PLS) was employed. The results suggest
that the regulatory efforts to improve auditors’ behaviours by enforcing
independence rules have been internalised by auditors. The results also rein-
force the need to instil the societal responsibilities of professional auditors,
Research on Professional Responsibility and Ethics in Accounting, Volume 21, 17–52

Copyright © 2018 by Emerald Publishing Limited
All rights of reproduction in any form reserved
ISSN: 1574-0765/doi:10.1108/S1574-076520180000021002
17
18 Itsaso Barrainkua and Marcela Espinosa-Pike
since auditors’ public interest commitment is related to their ethical deci-

sion making. Furthermore, this study reveals that firms’ ethical cultures
influence auditors’ commitment to the public interest, as well as their ethi-
cal decision making. The study raises practical implications for auditing
professionals, regulators and audit firms. Understanding auditors’ beliefs
and behavioural patterns is critical to proposing mechanisms that enhance
their ethical behaviours, which could ultimately enhance audit quality. The
chapter contributes to the field by analysing the combined effect of the
regulatory framework and organisational context on auditors’ professional
values and behaviours.
Keywords: Auditing; public interest; independence enforcement;
firms’ ethical culture; ethical decision making; objectivity
Introduction
Audit failures at the beginning of the 21st century have been attributed to
a lack of professional identity, and to auditors’ insufficient dedication to
professional ideals (Clikeman, Schwartz, & Lathan, 2001; Wyatt, 2004).
Accounting professionals have also been blamed for unethical behaviours
that have contributed to corporate failures.
In response to the financial collapses that took place in the 2000s, the
regulatory auditing framework has evolved to restore public confidence in
auditing, mainly through the issuance of independence rules (Cooper &
Neu, 2006; Humphrey, Moizer, & Turley, 2006; Taylor, DeZoort, Munn, &
Thomas, 2003). Efforts to ensure that auditors fulfil their responsibilities to
the public have led to the establishment of rigid independence standards and
a related system of penalties (Humphrey et al., 2006).
However, few studies have analysed how auditors’ beliefs converge with
this independence enforcement focus, or whether this orientation affects their
public interest commitment. The responsibility to act in the public interest
is a distinguishing mark of the accountancy profession, according to the
International Federation of Accountants (IFAC, 2016). However, in existing
literature, little attention has been paid to the degree to which auditors accept
their roles as servants of the public interest (Davenport & Dellaportas, 2009).
Previous studies have attempted to link together accountants’ attitudes
toward the profession (e.g. research into professional commitment) and their
engagement in ethical decision making (Jeffrey, Weatherholt, & Lo, 1996;
Kaplan & Whitecotton, 2001; Lord & DeZoort, 2001). However, these studies
The Influence of Auditors’ Commitment 19
have mostly focused on analysing accountants’ professional commitment and

its effects on auditors’ ethical behaviours, without specifically addressing
accountants’ public interest commitment.
In addition, as theories of moral psychology and organisational behav-
iour claim (Ajzen, 1991; Ferrell & Gresham, 1985; Hunt & Vitell, 1986;
Jones, 1991; Thorne, Massey, & Magnan, 2003), professional attitudes and
behaviours do not depend solely on individual beliefs, but are also influ-
enced by organisational contexts. Audit firms’ organisational cultures and
structures shape auditors’ professional and ethical values (Shafer, Poon,
& Tjosvold, 2013). The International Auditing and Assurance Standards
Board (IAASB, 2014) recognises the key role that audit firms’ cultures play
in influencing auditors’ ethical values that ultimately support audit qual-
ity. Despite the growing concern regarding the effect of accounting firms’
commercial focus on auditors’ ethical values and behaviours, there is still
little empirical evidence concerning this issue. In this regard, the relations
between auditors’ professional values and beliefs, perceived organisational
ethical cultures, and ethical decisions have been very rarely analysed in
extant literature (Shafer, 2015).
Therefore, this study explores how regulatory environments and organi-
sational contexts affect auditors’ professional values and behaviours. To that
end, the professional behaviours considered in this chapter relate to audi-
tors’ ability to remain objective when faced with pressures that threaten their
objectivity. Although the literature has focused mainly on audit client pres-
sures, auditors may also experience pressures from audit superiors to change
conclusions or opinions in order to meet clients’ preferences (Espinosa-Pike
& Barrainkua, 2016; Lord & Dezoort, 2001). This chapter provides further
evidence on this topic by including not only the pressures that arise in the
auditor–client relationship, but also the pressures from members of an audit
firm to meet client preferences.
This study seeks to address some shortcomings of past research. First, we
focus our analysis on the public interest commitment, as it is the core profes-
sional value that is specific to the auditing context. Therefore, an analysis of
the factors that affect the public interest commitment and its influence on
ethical decision making can provide practical solutions that foster auditors’
professional behaviours.
Second, as far as we know, no prior study has analysed whether there is
an agreement in auditors’ opinions about how to best serve the public inter-
est within the current institutional regulatory framework. In this regard, this
study responds to calls from existing academic literature to analyse whether
auditors’ attitudes toward independence enforcement are related to their
professional values and ethical decisions (Alleyne, Hudaib, & Pike, 2013;
Gendron, Suddaby, & Lam, 2006; Suddaby, Gendron, & Lam, 2009).
Third, this chapter contributes to the field by analysing the combined
effect of regulatory frameworks and organisational contexts on auditors’ pro-
fessional values and behaviours. In this regard, we propose a model in which
auditors’ perceptions of the ethical cultures in their firms, together with their
beliefs toward independence enforcement, influence their public interest com-
mitment, while that commitment in turn influences their ethical decisions
regarding the practices that compromise their objectivity.
Fourth, we analyse auditors’ ethical judgements, as well as their reported
behaviours. This research extends on previous literature that analyses the
influence of ethical judgement on auditors’ capacity to withstand the pres-
sures that they encounter when carrying out their duties.

Finally, this study broadens the knowledge of the accounting profession
in institutional settings different to those commonly studied. In Spain, like in
other code law countries, a high level of legalism characterises professional
regulation. The ethical guidelines in auditing have largely been stated through
legal regulation, and are limited mainly to the prohibitions and causes of
incompatibility regulated by law to preserve auditors’ independence. The
assurance of companies’ financial statements by independent auditors has
been compulsory only since the Audit Act of 1988. The auditing profession
in Spain is, therefore, relatively new. Under this Act, a public oversight body
for the audit profession, the Instituto de Contabilidad y Auditoría de Cuentas
(ICAC), was set up, and was granted virtually all powers (Garcia-Benau, De
Fuentes-Barberá, & Vico-Martinez, 2008).
The results of this study indicate that auditors who have a positive attitude
toward independence legal enforcement show higher professional and ethical
attitudes. This finding reflects the strong rule orientation of Spanish auditors.
Our results also reinforce the need to instil the societal responsibilities of
professional auditors, since auditors’ public interest commitment is related
to their ethical decision making. Furthermore, this study highlights the key
role that audit firms play in ensuring auditors’ professional behaviours. The
results reveal that audit firms’ ethical cultures influence auditors’ commit-
ment to the public interest, as well as their ethical decision making.
This study has several theoretical and practical implications. Its findings
contribute to the accounting field, since they provide new insights into the
factors that affect auditors’ ethical decision making. Specifically, we extend
prior literature on auditors’ ethical decision making by identifying the effects
of both organisational and institutional contexts on auditors’ professional
values and behaviours.
These findings also have important implications for professional organisa-

tions, audit firms and regulators. Understanding auditors’ beliefs and behav-
ioural patterns is critical to proposing mechanisms that enhance their ethical
behaviours, which could ultimately enhance audit quality. Especially, this
study has implications for the regulators of the audit profession in code law
countries, such as European continental countries.
The remainder of this chapter is organised as follows. The following sec-
tion presents information on previous literature concerning ethical decision
making in auditing, and develops our research hypotheses. The third sec-
tion addresses our research methods. The fourth section reports our results.
Finally, in the fifth section, we address our study’s primary conclusions, as
well as limitations and future lines of research.
Previous Literature and Hypothesis

Development
The auditing profession’s primary goal is to provide additional reliability to
a company’s financial statements. For auditors to fulfil their functions, finan-
cial statement users must have confidence that auditors have conducted their
work in compliance with the fundamental principle of objectivity. Taylor
et al. (2003) explain the difference between objectivity and independence, as
well as the relationship between the two. According to them, objectivity is a
bias-free state of mind that is necessary for achieving reliable opinions. These
authors highlight the need to focus on auditors’ objectivity instead of on their
relationship-based independence. Therefore, the professional behaviours con-
sidered in this chapter relate to auditors’ ability to remain objective when they
face pressures that threaten their objectivity.
According to the Framework for Audit Quality developed by the
International Auditing and Assurance Standards Board (IAASB) (2014,
p. 51), ‘it is vital for audit quality that auditors remain sceptical and objec-
tive and are prepared to challenge the reliability of the information they are
given’. As such, the client–auditor relationship may create threats, such as
intimidation and familiarity threats, that can compromise auditors’ objectiv-
ity and may lead auditors to subordinate their judgement to the client’s pref-
erences. In addition, auditors may face pressures from superiors to change
conclusions in order to satisfy client preferences (DeZoort & Lord, 1997;
Espinosa-Pike & Barrainkua, 2016). Therefore, in this chapter, we focus on
analysing the factors that influence auditors’ ethical decision making when
they face pressures to change their conclusions, both from clients and from
superiors.
The difficulty of observing auditors’ actual behaviours is one reason that
limited research exists that addresses their ethical behaviours (Jones, Massey,
& Thorne, 2003). Instead, existing literature has focused on the antecedents
of ethical behaviour, such as ethical judgements. Moral psychology provides
a basis for analysing individuals’ ethical judgements. Rest’s (1986) four-
component model attempts to explain the elements of ethical action. He
concludes that ethical action is the product of four psychological sub-pro-
cesses: moral sensitivity (recognition), moral judgement or reasoning, moral
motivation and moral character. Moral judgement refers to the ethical judge-
ments that individuals make about the courses of action that they have previ-
ously identified. According to this ethical decision-making model, the ethical

evaluation of actions influences behaviour. Ethical judgement has also been
included as predecessor of ethical behaviour in many other models of ethical
decision making (Ferrell & Gresham, 1985; Hunt & Vitell, 1986; Jones, 1991).
The present study analyses auditors’ ethical acceptability of unprofes-
sional behaviour, their engagement in unprofessional behaviour, and the
relationship between the two. Unprofessional behaviour is believed to be a
consequence of auditors’ improper values and their poor ethical reasoning.
However, environment is also thought to impact unprofessional behaviour
(Jones et al., 2003). In this regard, this study explores auditors’ unprofes-
sional practices, by analysing the influence of public interest commitment,
independence enforcement belief, and organisational ethical culture on audi-
tors’ acceptance of and engagement in unprofessional behaviour.
Hypothesis Development
Public Interest Commitment

Several researchers have claimed that little attention has been paid to the
degree to which auditors accept and acknowledge core professional values and
commitments (Suddaby et al., 2009). The concept of public interest is central
to the accounting profession, and yet very few studies have been conducted
that further our understanding of the public interest concept (Davenport &
Dellaportas, 2009). ‘Public interest’ has been defined as ‘the interests of third
parties who rely on the opinions and advice delivered by the members of the
accounting profession’ (Parker, 1987, p. 509).
The concept that auditors have of the accounting profession and the impli-
cations of being a part of this profession influence the ways in which they
identify and respond to the ethical dilemmas (McPhail, 2006). Auditors who
are committed to the profession, meaning that they accept and uphold the
profession’s fundamental values, such as integrity, independence, and objec-
tivity, are expected to be more successful in advancing and protecting the
professions’ fundamental values, as well as upholding and adhering to those
values (Kaplan & Whitecotton, 2001; Larson, 1977). In contrast, if auditors
see their principal role as serving their clients, rather than serving the public
trust or protecting investors, this view could influence what they believe are
acceptable and appropriate actions (Cooper & Robson, 2006; Davenport &
Dellaportas, 2009).
In a study of Australian professional accountants, Davenport and
Dellaportas (2009) examined their interpretation of the public interest. The
authors found that accountants’ education processes appear to have success-

fully transferred the meaning of public interest, but are not as effective in
guiding how it should be applied in practice when conflicts of interest arise.
Several researchers (Gendron et al., 2006; Shafer, Lowe, & Fogarty, 2002;
Wyatt, 2004) argue that the shift in values related to the auditing context,
namely from the public service ideal to a goal of profit maximisation, may
have had an influence on auditors’ attitudes toward the profession. In this
regard, auditors may begin to prioritise their client’s interests more than serv-
ing the public interest (Anderson-Gough, Grey, & Robson, 2000; Holm &
Zaman, 2012).
The relationship between professional attitudes and the ethical decision-
making process has been previously documented (Elias, 2006; 2008; Kaplan
& Whitecotton, 2001; Lord & DeZoort, 2001). The results of studies on this
relationship reveal that greater professional commitment leads to more ethical
decision making. According to Porter, Steers, Mowday, and Boulian (1974),
professional commitment indicates a belief in the goals and values of the
profession, a willingness to exert considerable effort on behalf of the profes-
sion, and a desire to maintain membership in the profession. The public inter-
est commitment addressed in the current research differs from, but is related
to, the professional commitment that has been previously investigated in lit-
erature (Aranya, Pollock, & Amernic, 1981; Porter et al., 1974). Professional
commitment does not involve key aspects of the auditing context, such as
auditors’ public interest commitment. In this regard, public interest commit-
ment addresses auditors’ beliefs in their roles as serving the public interest
and responding to society’s expectations.
According to Mintz (2015), accountants’ commitment to protect the
public interest is the foundation for making ethical judgements in account-
ing. In this regard, we expect that auditors who prioritise serving the public
interest will consider it unethical to engage in any practice that prevents them
from fulfilling their responsibility to ensure the fair presentation of financial
statements. On the contrary, auditors who see their role as primarily serv-
ing audited clients’ interests will not prioritise their attest function, and thus
might consider it more acceptable to engage in practices that have the poten-
tial to threaten the quality of financial information. Therefore, we propose
the following hypotheses:
H1: There is a negative relationship between auditors’ commitment
to the public interest and their ethical acceptability of unprofessional
behaviour.
H2: There is a negative relationship between auditors’ commitment to
the public interest and their engagement in unprofessional behaviour.
Independence Enforcement
Independence is typically described as the central value of the auditing pro-
fession (Suddaby et al., 2009). However, there is ongoing debate as to how
audit regulation can influence auditors’ behaviours and which standards
are most effective in managing the risk that auditors will not conduct their
work independently. The two main standards in question are the rule-based
and principle-based standards. The rule-based approach refers to regula-
tions based on unambiguous and strict rules, which allow little interpreta-
tive latitude. Principle-based regulation establishes principles that allow for
the application of professional judgement, and focuses on fostering profes-
sional responsibility and encouraging auditors to make ethical judgements
(Spalding & Oddo, 2011).
As a consequence of a number of accounting scandals, measures have
been taken to enhance auditors’ independence, both in fact and appearance,
such as the Sarbanes-Oxley Act (SOX). A system of more stringent prohi-
bitions and penalties has arisen, in which regulators take on more active
roles (Humphrey et al., 2006). These regulatory efforts assume that audi-
tors can remain free of conflicts of interest by avoiding certain relationships
(Taylor et al., 2003). However, some authors maintain that independence is a
state of mind, and that it is, therefore, not possible to regulate situations that
threaten independence (Gaa, 2006; Humphrey et al., 2006). A study con-
ducted by Beattie, Fearnley and Hines (2013) in the United Kingdom has
found that audit partners perceive many aspects of the post-SOX regulatory
regime to be compliance driven (i.e. rules based), and to have little impact on
real audit quality.
Gendron et al. (2006, p. 172) state that ‘While auditor independence was
once viewed mainly as a moral-ethical position, it is today increasingly seen
as an object that can be regulated through standards promulgated in codes of
ethics and/or government regulations, and checked upon and verified through
reviews and inspections’. However, according to these authors, this regula-
tory enforcement contrasts with the ideals of professionalism, which assume
that professional ethics are grounded in the character of the individual, and
thus that ethics regulation is largely unnecessary.
This study analyses the effects of auditors’ beliefs about independence
enforcement on their public interest commitment and ethical behaviours.
Prior literature has studied accountants’ commitment to independence
enforcement (Gendron et al., 2006; Suddaby et al., 2009). According to these
authors, commitment to independence enforcement refers to the extent to

which accountants consider auditor independence as a key attribute of the
profession, and believe that regulatory standards of auditor independence
should be rigorously enforced. Accordingly, auditors who are committed to
independence should positively view the regulation of professional account-
ants’ ethics through the formulation of independence standards and rigorous
enforcement regimes.
Several authors (Alleyne et al., 2013; Gendron et al., 2006; Suddaby et al.,
2009) have called for further research into the influence of auditors’ com-
mitment to independence enforcement on auditors’ decisions when they face
situations in which independence plays a key role, such as the ethical dilem-
mas presented in this study.
Due to the lack of prior research into the effects of auditors’ attitudes
toward independence enforcement on auditors’ professional values and ethi-
cal decision making, we cannot anticipate if a legal orientation toward inde-
pendence enforcement, as opposed to a principle-based orientation, will lead
to higher public interest commitment and more ethical decisions. Therefore,
we do not predict the direction of such effects. Instead, we present the follow-
ing hypotheses:
H3: There is a relationship between auditors’ attitudes toward inde-
pendence enforcement and their public interest commitment.
H4: There is a relationship between auditors’ attitudes toward inde-
pendence enforcement and their ethical acceptability of unprofessional
behaviour.
H5: There is a relationship between auditors’ attitudes toward independ-
ence enforcement and their engagement in unprofessional behaviour.
Organisational Ethical Culture

According to Treviño (1990, p. 195), ethical culture refers to ‘a complex inter-
play of formal and informal systems that can support either ethical or uneth-
ical organisational behaviour’. In firms whose ethical cultures are strong,
ethical norms support ethical conduct, organisational leaders encourage ethi-
cal behaviour, and ethical behaviour is rewarded while unethical behaviour is
punished (Treviño, Butterfield, & McCabe, 1998).
Enforcing mechanisms in the firms that enhance auditors’ ethical rea-
soning is of major importance. In audit settings, the quality of service and
actual performance of professionals is difficult to measure, and so audit
firms must rely on ‘the operation of strong common values to control pos-
sible opportunism’ (Douglas, Davidson, & Schwartz, 2001, p. 104). The
organisational ethical cultures of audit firms are gaining increased attention

among academics and professional organisations, as the values, ethics, and
attitudes of auditors are influenced by the prevailing cultures in their audit
firms (IAASB, 2014).
In this regard, scholars (e.g. Gendron et al., 2006; Holm & Zaman, 2012;
Shafer et al., 2002; Wyatt, 2004) have shown interest in how audit firms’
organisational environments and cultures influence auditors’ professional
values and ethical standards. Some authors argue that the values governing
audit firms have changed in recent decades, moving away from public service
ideals and toward profit maximisation goals, and that these changed com-
mercial values are affecting auditors’ attitudes and behaviours (Carnegie &
Napier, 2010; Gendron et al., 2006; Hanlon, 1996; Sikka, 2004; Wyatt, 2004).
According to Johnstone, Sutton and Warfield (2001), an organisational
culture that values and rewards professionalism mitigates independence risk,
and thus enhances actual and perceived audit quality. Several studies (Shafer,
2009; Shafer et al., 2013) have revealed that audit firms whose ethical climates/
cultures do not support professional values experience conflicts between their
organisational goals and their professional goals. Bobek, Hageman and
Radtke (2015) suggest that a strong public-interest orientation is positively
related to the strong perception of the ethical environment of one’s audit
firm. However, these authors call for more research that could explain their
findings.
Prior studies on ethical decision making in auditing have revealed that
auditors’ ethical judgements can be influenced by the ethical cultures of their
audit firms. Douglas et al. (2001) have found that organisational ethical cul-
tures indirectly affect auditors’ ethical judgements, as they influence personal
values that are positively related to such judgements. Sweeney, Arnold and
Pierce (2010) found that a greater perceived pressure to engage in unethical
actions and a greater perceived unethical tone at the top of an organisation

are related to lower levels of ethical judgement.
Analysing the influence of the ethical cultures of audit firms has practi-
cal implications for the profession, as an organisation’s ethical culture can
be influenced by the steps taken by the audit firms themselves (Shafer &
Simmons, 2011). Audit firms’ managers have more control over their organi-
sational environments than over employees’ values and moral development
(Treviño et al., 1998). Accordingly, the quality of auditors’ reporting deci-
sions can be improved if audit firms align their organisational values with
those of the broader accounting profession (Shafer, 2015). Shafer (2015)
argues that if auditors perceive that the ethical climates in their organisa-
tions are supportive of ethical/socially responsible behaviour, it increases
their perceptions of the importance of ethics and social responsibility, and

accordingly leads to more ethical reporting decisions. Shafer (2015) also finds
that an organisational emphasis on public interest may discourage unethical
behaviour among accountants.
Like previous authors, we believe that the ethical culture of an audit firm
will foster professional attitudes and will improve the ethical judgements of
auditors. Therefore, we present the following hypotheses:
H6: There is a positive relationship between auditors’ perceptions of
their firms’ ethical cultures and auditors’ commitment to the public
interest.
H7: There is a negative relationship between auditors’ perceptions of
their firms’ ethical cultures and auditors’ ethical acceptability of unpro-
fessional behaviour.
H8: There is a negative relationship between auditors’ perceptions of
their firms’ ethical cultures and their engagement in unprofessional
behaviour.
Ethical Acceptability of Unprofessional Behaviour

Auditors often face situations in which a choice between right or wrong exists,
and in which that choice will affect others. At this respect, auditors encounter
ethical dilemmas in their daily practices. Moral judgement is described by
Rest’s four component model (1986) as the second step in an ethical decision-
making process, and refers to the ethical judgements that individuals make
about the courses of action that they have previously identified. The four
component model implies that the ethical evaluation of actions influences
behaviours.
Previous research into ethical decision making in accounting has found

that the ethical evaluation of questionable practices impacts one’s intention
to engage in such practices, as well as one’s engagement in the actual practices
(Cohen, Pant, & Sharp, 2001; Sweeney et al., 2010). We test the relationship
between auditors’ judgements regarding unprofessional behaviour and their
conduct with the following hypothesis:
H9: There is a positive relationship between the ethical acceptability
of unprofessional practices and their engagement in unprofessional
behaviour.
Other Control Variables

Existing academic literature has shown that as auditors advance their profes-
sional careers, the frequency at which they experience pressures, as well as
the sources of those pressures, change (Koch, Weber, & Wüstemann, 2012;
Shapeero, Koh, & Killough, 2003). Moreover, prior research has analysed the
influence of gender as well as individuals’ age and/or experience on ethical
decision making (Ford & Richardson, 1994; Jones et al., 2003; O’Fallon &
Butterfield, 2005). Therefore, in the model employed to test our hypotheses,
gender and age are included as control variables.
The proposed model is shown in Fig. 1. Fig. 1 presents the model with
the variable Self-Reported Unprofessional Behaviour as the measure for
Ethical
Independence H4 Acceptability of
Enforcement Unprofessional
(IE) Behavior (EAUB)
H5
H3
H1(−) H9(+) Age

Public Interest
Commitment
(PI)
H2(−) Gender
H6(+)
H7(−)
Organizational Self-reported
Ethical Culture Unprofessional
(OEC) H8(−) Behavior (SRB)
Fig. 1. Research Model.

auditors’ behaviours. In order to reduce the social desirability bias in audi-

tors’ responses, in the section Additional Analysis: Social Desirability Bias
we have repeated the partial least squares (PLS) analysis for the proposed
model in Fig. 1. This time we have employed respondents’ beliefs about other
auditors engaging in the unprofessional practices, instead of self-reported
responses, as the measure for auditors’ own behaviours.
Method
Sample and Data Collection
We distributed a survey questionnaire to Spanish auditors, who were mem-

bers of the professional organisation Registro de Economistas Auditores
(REA). In Spain, most auditors become members of a professional organisa-
tion after they are licensed, and usually when they reach managerial positions.
Therefore, the distribution of this questionnaire throughout REA allowed us
to access auditors with relatively significant experience. This population was
particularly interesting for the purposes of this study, as it plays a pivotal role
in the audit process. The professional organisation REA is comprised mainly
by small and medium-sized audit firms, which are a considerable segment of
the audit market in Spain (98% of the Spanish audit firms are in this market
segment, and represent over a 30% of the total turnover, ICAC, 2016).
The survey included a cover letter explaining its purpose, and a link through
which auditors could access the questionnaire involved. Respondents were
assured that the survey information would be used solely for the purpose of
this study, and that the data collection process guaranteed their anonymity.
A pilot test of the survey was first carried out with a medium-sized audit
firm. The questionnaire was sent to a partner of the firm, who passed it on to
three other partners. We then arranged an interview with this contact part-
ner, in order to gain feedback on the questionnaire from the group of four
respondents. The contact partner indicated that, overall, neither he nor his
fellow auditors had any trouble understanding the questions. Therefore, we
made only slight changes to the initial questionnaire, most of which were
attempts to remove some minor ambiguities that we identified.
We subsequently sent the questionnaire out in two rounds, and obtained 122
responses. In the first round, 80 individuals responded, while 42 responded in
the second. The 122 responses represent a response rate of 5%. To test for non-
response bias, we compared the data of the first-round respondents with the
data of the second-round respondents. The later respondents were considered
as surrogates of non-respondents. No statistically significant differences were

found between the responses of earlier and later respondents. This provides
some assurance that no problems with respect to non-response bias existed.
Measurement of Variables
The variable Public Interest Commitment is designed to assess the degree to

which respondents believe that serving the public interest is auditors’ primary
role, as well as their level of agreement with the duties that existing literature
suggests that society expects from the auditor attest function. Bobek et al.
(2015) have measured public interest commitment with a single item in which
participants were asked to indicate their agreement with the ideal espoused by
the accounting profession to serve the public interest. However, as a single-
item construct might be ambiguous, we have taken their suggestion to further
develop it and consider other items in addition to the public interest ideal (see
Table 2). Our four additional statements are based on prior studies (Davenport
& Dellaportas, 2009; Jenkins & Lowe, 2011). Participants had to indicate the
extent to which they agreed or disagreed with the five statements on a Likert
scale ranging from 1 = completely disagree to 5 = completely agree.
The variable Independence Enforcement is designed to measure partici-
pants’ beliefs that regulatory standards of auditor independence should be
rigorously enforced. The items that measure this variable are based on the
studies by Gendron et al. (2006) and Suddaby et al. (2009). The original scale
(Gendron et al., 2006) included an item that assessed the degree to which
respondents considered independence as one of the main foundations of the
Certificate Accountant profession. This has not been included in the present
study as we consider that this item would measure the commitment to the
value of independence but not necessarily the extent to which auditors’ believe
that the profession’s independence requirements need to be strictly enforced.
As in the original scale, the three items employed in the present study meas-
ure the degree to which respondents accept the importance of the rigor and
enforcement of independence requirements. The items employed are similar
to the original scale but we specifically use the terms of the Spanish regu-
latory regime, such as prohibitions and causes of incompatibility (Table 2).
Respondents were asked to indicate their agreement with these three state-
ments related to independence requirements on a five-point Likert scale rang-
ing from 1 = completely disagree to 5 = completely agree.
An eight-item scale was included in the questionnaire in order to measure
perceived Organisational Ethical Culture (Table 2). This scale was adapted from
the ethical environment instrument developed by Treviño et al. (1998), which

has been proven to be reliable in audit settings (Barrainkua & Espinosa-Pike,
2015; Copeland, 2015; Shafer & Simons, 2011; Svanberg & Öhman, 2013).
For purposes of the present study, six of the items in the original scale (OEC1
to OEC6 in Table 2) were included. As in the original instrument, these six
items refer to the reward/punishment of ethical/unethical actions, top manage-
ments’ role modelling, and the effectiveness of the ethics code in promoting
ethical behaviour. In addition, two more items that are relevant in the audit-
ing context were included. The first item was ‘Top managers in this organisa-
tion are concerned with informing employees about the ethics code’ (OEC7).
Reinforcement of the code has been used as a proxy for an ethical environment
within the context of audit firms (Martinov-Bennie & Pflugrath, 2009). Finally,
the last item considered in the ethical culture scale was ‘Top managers in this
organisation promote ethical training of employees’ (OEC8).
The variable Ethical Acceptability of Unprofessional Behaviour refers to the
acceptance, from an ethical point of view, of three unprofessional practices
listed in Table 2, as measured on a five-point Likert scale ranging from 1 =
unethical to 5 = ethical. The extent to which respondents rate actions as ethi-
cal/unethical has been used to measure ethical acceptability in prior studies
(Cohen, Pant, & Sharp, 1998; Pierce & Sweeney, 2010; Shafer & Simmons,
2011; Sweeney et al., 2010).
The variable Self-Reported Unprofessional Behaviour assesses auditors’
self-reported behaviours regarding a number of unprofessional practices.
Respondents were requested to indicate the frequency with which they had
engaged in those practices, also on a Likert scale, which ranged from 1 =
never to 5 = nearly always. In addition, to reduce social desirability bias,
respondents were requested to indicate the frequency with which they believed
that auditors generally engage in those practices on a Likert scale ranging
from 1 = never to 5 = nearly always. This variable was named Auditors’
Unprofessional Behaviour (proxy-report). Observer-type measures have been
used in previous studies in the business ethics field (Cohen et al., 1998; Pierce
& Sweeney, 2010).
Results
Demographic Characteristics
A total of 122 responses were included in this study. The auditors participat-
ing in this study belong to small- and medium-sized audit firms. The majority
of the individuals in the sample were partners (71%), which meant that most
of them had more than seven years of experience in auditing (81%). The
average age of the respondents was 48. The majority of the auditors that par-
ticipated in the study were male (74%). The average long-term experience and
high ranking of participants explained the greater proportion of men in the
sample. Career advancement in audit firms compromises personal lives, and
this is generally a bigger deterrent to professional development for women
than for men (Anderson-Gough et al., 2000). The sample is, in this respect,
reflective of the traditional patterns within the profession, and is more specifi-
cally a representative sample of the Spanish auditing context (Sierra-Molina
& Santa María-Pérez, 2002).
Descriptive results
Table 1 displays descriptive statistics for the variables of the study.

Regarding the variables public interest commitment and independence
enforcement, participants’ responses are close to the scale’s mid-point (3),
indicating that they neither agree nor disagree. Auditor’s mean response for
the organisational ethical culture is higher than the mid-point, however, the
responses suggests that in general they do not perceive a strong ethical envi-
ronment in their firms. It is important to note that overall auditors consider
the practices that compromise objectivity as unethical and they report that
they have rarely engaged in those practices. However, participants of the
study report a higher frequency of other auditors engaging in this behaviour.
This was an expected result as questions that are potentially incriminating
will normally lead respondents to underreport their own behaviour (Wouters,
Maesschalck, Peeters, & Roosen, 2014).
Table 1. Descriptive Statistics.

Mean SD
Public interest commitment 3.346 0.556

Independence enforcement 3.311 0.865
Organisational ethical culture 3.777 0.773
Ethical acceptability of unprofessional behavior 1.426 0.458
Self-reported unprofessional behaviour 1.465 0.577
Auditors’ unprofessional behaviour (proxy-report) 2.782 0.852
Partial Least Squares Results
We tested the research model proposed in Fig. 1 by using PLS, a variance-

based approach to structural equation modelling. Structural equation mod-
elling (SEM) is particularly useful for this research, in which key concepts
are not directly observable and therefore latent variables are necessary. We
employed the PLS approach because this method is primarily intended for
causal-predictive analysis, in which the problems explored are complex but
there is a low level of theoretical knowledge (Roldan & Sanchez-Franco,
2012). In this regard, PLS is an appropriate technique for predictive applica-
tions and theory development, including exploratory research such as that in
this study (see Roldan & Sanchez-Franco, 2012). Additionally, PLS is valu-
able when the data collected is non-normal and when the formative measure-
ment of latent variables is needed (Hair, Sarstedt, Hopkins, & Kuppelwieser,
2014). The size of the sample in this study also made the use of PLS appropri-
ate (Barclay, Higgins, & Thompson, 1995; Hair et al., 2014). The minimum
sample size required as suggested by Barclay et al. (1995) is the larger of
(i) 10 times the largest number of formative indicators used to measure one
construct; or (ii) 10 times the largest number of inner model paths directed
at a particular construct in the inner model. In our model, Public Interest
Commitment is the only formative construct and is measured by five indi-
cators. This equals the number of inner paths of the variable Self-reported
Behaviour, which has the largest number of antecedent constructs in our
model. In this regard, our sample of 122 auditors is far above the minimum
sample required (50) for statistical power.
A PLS model is analysed in two steps. In our study, we first evaluated
the reliability and validity of the measurement model, and then assessed the
structural model. We used bootstrapping re-sampling procedures (bootstrap
with 5000 re-samples) to estimate factor loadings, weights, and path coeffi-
cients in the model (Chin, 1998). For our work, we used SmartPLS software
version 3.1.2. (Ringle, Wende, & Becker, 2014).
Given that all the data were collected from the same source, that is, the
questionnaire sent to the auditors, there is a possibility of common method
bias. To examine to what extent common method variance is present in
the data, we conducted Harman’s Single-Factor Test. The results of the
Harman’s Single Factor Test reveals that there are more than one factors and
a single factor does not account for majority of variance among the meas-
ure. This provides some assurance that no problems with common method
bias existed.
Measurement Model
The measurement model specifies the relationship between latent variables
and their indicators. In our analysis, the latent variables Independence enforce-
ment, Organisational Ethical Culture, Ethical Acceptability of Unprofessional
Behaviour and Self-reported Unprofessional Behaviour were the constructs
specified with reflective indicators. The measurement model for reflective con-
structs is assessed in terms of individual item reliability, internal consistency,
convergent validity, and discriminant validity.
The latent variable Public Interest Commitment is specified as a forma-
tive indicator. As stated by Hair et al. (2014, p. 109), ‘The central difference
between reflective and formative constructs is that formative measures repre-
sent instances in which the indicators cause the construct (i.e. the arrows point
from the indicators to the construct), whereas reflective indicators are caused
by the construct (i.e. the arrows point from the construct to the indicators)’.
The work of Cenfetelli and Bassellier (2009) explains that formative meas-
urement allows for the modelling of a latent construct from a diverse and
distinct set of observable phenomena. The substitution of multiple indica-
tors for a single construct facilitates the study (Cenfetelli & Bassellier, 2009),
as it makes it possible to have a single unitary construct of complex social
phenomena while maintaining the individual attributes of each indicator
(Rodgers & Guiral, 2011).
We consider the four major criteria proposed by Jarvis, MacKenzie and
Podsakoff (2003) for modelling a construct as a formative indicator. In doing
so, we consider Public Interest Commitment to be better measured by employ-
ing a formative indicator because (1) the direction of causality flows from
the measures to the construct, (2) indicators are not interchangeable, (3)
covariation among the indicators is not implied and (4) the indicators are not
expected to have the same antecedents and consequences. The traditional reli-
ability and validity assessment employed in the case of reflective constructs
has recently been found to be both inappropriate and illogical (Roldan &
Sanchez-Franco, 2012). As such, we assess, instead, collinearity and the
weights of indicators.
Table 2 presents our assessment of the reliability and validity of the meas-
urement model.
Regarding the reflective indicators, individual item reliability is considered
to be adequate when an item has a factor loading that is greater than 0.7 for
its respective construct (Carmines & Zeller, 1979). Factor loadings represent
the correlation between indicators and a construct. Table 2 shows that all
of the items in our study have loadings that are greater than 0.7 for their
respective constructs.
Table 2. Measurement Model.

Reflective Indicators Loading T-Statistic Cronbach’s CR AVE
Alpha
Independence Enforcement (IE)

The prohibitions and causes 0.757 6.204 0.702 0.829 0.618
of incompatibility regarding
independence included in the
Spanish auditing standards
improve auditors’ independence
in fact (IE1)
The existence of detailed and 0.824 5.794
strict rules regarding auditor
independence impairs audit

quality (IE2) (Reverse scored)
The pressure exerted by the public 0.776 5.258
regulatory body to ensure the
strict compliance with the
independence standards impedes
offering quality services in
auditing (IE3) (Reverse scored)
Organisational Ethical Culture (OEC)
Management in this organisation 0.763 14.245 0.937 0.948 0.696
disciplines unethical behaviour
when it occurs (OEC1)
People of integrity are rewarded in 0.772 11.499
this organisation (OEC2)
Top managers of this organisation 0.899 32.388
regularly show that they care
about ethics (OEC3)
Ethical behaviour is the norm in 0.887 32.118
this organisation (OEC4)
Top management of this 0.850 21.973
organisation guide decision
making in an ethical direction
(OEC5)
The ethics code serves only to 0.844 26.340
maintain the image (reversed)
(OEC6)
Top managers in this organisation 0.787 13.780
are concerned with informing
employees about the ethic code
(OEC7)
Top managers in this organisation 0.861 26.161
promote ethical training of
employees (OEC8)
Table 2. (Continued )
Reflective Indicators Loading T-Statistic Cronbach’s CR AVE
Alpha
Ethical Acceptability of Unprofessional Behaviour (EAUB)

Accept pressures from superiors to 0.729 9.134
change your conclusions/
opinions (EAUB1)
Accept pressures from the client 0.773 12.668 0.700 0.826 0.613
company to change your
conclusions/opinions/audit report
(EAUB2)
Let your decisions on audit work be 0.844 19.418
influenced by familiarity with the
client company (EAUB3)
Self-Reported Unprofessional Behaviour (SRB)
Accept pressures from superiors to 0.812 13.505 0.715 0.841 0.640

change your conclusions/
opinions (SRB1)
Accept pressures from the client 0.861 19.468
company to change your
conclusions/opinions/audit
report (SRB2)
Let your decisions on audit work 0.721 10.337
be influenced by familiarity with
the client company (SRB3)
Formative Indicators Weight T-Statistic VIF Loading T-Statistic
Public Interest Commitment (PI)

In performing the audit, public 0.311 1.972 1.082 0.281 1.617
interest must always be above
both personal interests and the
interests of the client (PI1)
The auditor’s work is to meet the needs 0.943 10.029 1.037 0.945 12.045
of the audited company above other
interest (PI2) (Reverse scored)
It is the auditors’ moral obligation to −0.064 0.553 1.213 −0.080 0.617
detect any act of fraud committed
by the client company (PI3)
The scope of the auditor’s work 0.114 0.921 1.331 −0.026 0.192
should be expanded in order to
increase their responsibility with
regard to the detection of errors
and irregularities (PI4)
Exceptions with regard to the duty −0.076 0.644 1.258 −0.178 1.179
of professional secrecy should
be expanded in order to meet the
public interest (PI5)
Note: CR, composite reliability; AVE, average variance extracted.

Internal consistency was assessed by analysing composite reliability and

Cronbach’s alpha. The composite reliability (CR) of the reflective latent vari-
ables ranged from 0.826 to 0.948. A construct with a composite reliability
value of over 0.7 is considered to be reliable (Nunnally, 1978). Additionally,
all reflective constructs have a Cronbach’s alpha greater than 0.7. To assess
convergent validity, we examine the average variance extracted (AVE) meas-
ure (Fornell & Larcker, 1981). AVE values should be greater than 0.50, which
indicates that more variance is explained by its indicator than by error. The
AVE measures for our constructs range from 0.613 to 0.696.
To assess discriminant validity, the following conditions must be met (Chin,
1998): (1) the indicators load higher for their hypothesised factor than for other
factors (i.e., own-loadings are higher than cross-loadings), and (2) the square
root of each construct’s AVE should be greater than the construct’s correlation
with other constructs. In other words, the average variance shared between the
construct and its indicators should be greater than the variance shared between
the construct and other constructs. We tested the first condition by using con-
firmatory factor analysis, the results of which are shown in Table 3.
The correlation matrix in Table 3 shows that no indicator loads more
highly for another construct than it does for the latent construct that it is
intended to measure. Regarding the second condition for discriminant valid-
ity, the diagonal elements should be significantly greater than the off-diagonal
elements in the corresponding rows and columns (see Table 4). This condition
is satisfied for all of the variables with reflective indicators. A similar analysis
is not possible for the assessment of Public Interest Commitment, due to the
non-availability of AVE values.
In the case of the latent variable Public Interest Commitment, the assessment
of the measurement properties of the formative construct is based on testing
the potential multicollinearity among items, as well as the analysis of weights
(Lee, Petter, Fayard, & Robinson, 2011; Roldán & Sánchez-Franco, 2012).
A high collinearity among indicators is a risk to the stability of forma-
tive indicator weights, and makes it difficult to interpret the effects of the
indicators on the construct in question (Cenfetelli & Bassellier, 2009). A vari-
ance inflation factor (VIF) statistic of greater than 3.3 signals a high level of
multicollinearity (Petter, Straub, & Rai, 2007). The collinearity test that we
performed shows that the maximum VIF value for our formative indicators is
1.331 (Table 2), which does not reveal multicollinearity problems.
The weights of the formative indicators provide information about the
relative importance of each indicator in the construction of the construct
(Chin, 1998). Therefore, weights are used to assess the meaning of the latent
construct. We have assessed the significance of the weights with a resampling
Table 3. Correlation Matrix Between Latent Variable Scores

and Indicators.
Independence Organisational Ethical acceptability Self-reported
enforcement ethical culture of unprofessional unprofessional
behaviour behaviour
IE1 0.757 0.091 −0.219 −0.076

IE2 0.824 0.038 −0.225 0.004
IE3 0.776 −0.061 −0.157 0.061
OEC1 0.097 0.763 −0.201 −0.383
OEC2 0.080 0.772 −0.192 −0.440
OEC3 0.031 0.899 −0.178 −0.472
OEC4 0.054 0.887 −0.223 −0.468

OEC5 0.020 0.850 −0.363 −0.437
OEC6 −0.068 0.844 −0.238 −0.479
OEC7 0.010 0.787 −0.301 −0.475
OEC8 0.061 0.861 −0.258 −0.483
EAUB1 −0.178 −0.127 0.729 0.285
EAUB2 −0.237 −0.148 0.773 0.231
EAUB3 −0.197 −0.358 0.844 0.324
SRB1 −0.017 −0.491 0.218 0.812
SRB2 −0.005 −0.451 0.188 0.861
SRB3 −0.018 −0.365 0.446 0.721
Note: Bold elements refer to indicators’ loadings with their associated latent construct.
procedure (bootstrap with 5000 resamples). The item PI2 was found to be
significant at the 0.01 level (t = 9.962 > 2.577), while PI1 was significant at the
0.1 level (t = 1.768 > 1.645), based on a two-tailed t-test. Two of the five indi-
cators significantly contribute to the Public Interest Commitment construct.
Given that the non-significant formative indicators contribute conceptually to
the construct, dropping formative indicators can result in changes in the con-
ceptual meaning of the construct (Bollen & Lenox, 1991; Diamantopoulos
& Winklhofer, 2001; Roberts & Thatcher, 2009). Therefore, based on prior
literature, we chose to retain all five indicators in order to capture the whole
meaning of the Public Interest Commitment construct.
Structural Model
The evaluation of the structural model is based on the sign, magnitude,
and significance of the structural path coefficients, the R2 values (variance
Table 4. Discriminant Validity.

Independence Organisational Ethical Self- Public
Enforcement Ethical Acceptability Reported Interest
Culture of Unprofessional Commitment
Unprofessional Behaviour
Behaviour
Independence 0.786
Enforcement
Organisational 0.041 0.834
Ethical Culture
Ethical −0.259 −0.295 0.783
Acceptability of
Unprofessional
Behaviour
Self-Reported −0.017 −0.547 0.358 0.800
Unprofessional
Behaviour
Public Interest 0.347 0.350 −0.398 −0.301 n.a.
Commitment
Note: Diagonal elements (bold) are the square root of variance shared between the constructs
and their measures (AVE); Off-diagonal elements are the correlations among the constructs; n.a.
non applicable.
explained by antecedent constructs), and the Q2 (redundancy) test for predic-

tive relevance (Roldán & Sánchez-Franco, 2012). In order to assess the sta-
tistical significance of the path coefficients, bootstrapping (5000 re-samples)
was used to generate standard errors and t-statistics (Chin, 1998).
Fig. 2 and Table 5 show the results for the structural model. Hypotheses H1,
H6, H7, H8 and H9 were supported. Regarding H3, a positive relationship was
found between Independence Enforcement and Public Interest Commitment.
The PLS results show that a significant negative relationship exists between
auditors’ belief in serving the public interest and their acceptability of ques-
tionable practices. This indicates that auditors who are committed to serv-
ing the public interest show less acceptability of unprofessional behaviour.
Special attention must be placed on the weights of the formative construct
Public Interest Commitment. The weights of the formative construct provide
information about how each indicator contributes to the respective construct.
Therefore, the interpretation of the results regarding the effect of Public
Interest Commitment should be based on the weights of the construct. The
indicators relating to whose interest should prevail are those with the great-
est weight in the Public Interest Commitment construct and, accordingly, are
Ethical
Independence −0.158* Acceptability of
Enforcement Unprofessional
(RPO) Behavior (EAUB)
0.121*
0.3
33
n.s
***
*
1** Age
.
Public Interest .28 0.198**
−0
Commitment
(PI) n.
s. Gender
n.s
.
n.s
.
***
**
30
36
.2
0.3
−0
0.010**
Organizational −0.458*** Self-reported
Ethical Culture Unprofessional

(OEC) Behavior (SRB)
*significant at the 0.1 level; **significant at the 0.05 level; ***significant at the 0.01 level; n.s. not significant
Fig. 2. Structural Model Results.
the indicators that most influence the Ethical Acceptability of Unprofessional

Behaviour.
The direct link between Public Interest Commitment and Self-Reported
Unprofessional Behaviour (H2) was not supported. This result suggests that
Public Interest Commitment operates as a variable that precedes ethical judge-
ment but does not directly influence auditors’ behaviour. The relationship
between auditors’ professional values, such as their commitment with the
public interest, and their behaviour depends on the ethical evaluation of
the action. Therefore, our results indicate that other variables are affecting
the relationship between these two variables. At this respect, some researches
(Lord & Dezoort, 2001) also found that in presence of other variables, such
as social influence pressure, the positive effect between professional attitudes
and ethical behaviour disappeared.
Our results indicate that auditors who believe that independence should
be legally enforced show higher public interest commitment. Furthermore,
the results indicate that a relationship exists between auditors’ beliefs toward
independence enforcement and their acceptance of unprofessional behaviour
(significant at the 0.1 level, based on a two tailed t-test). More specifically,
auditors who feel that independence should be rigorously enforced tend to be
less accepting of questionable practices.
With regard to Organisational Ethical Culture, our results show a signifi-
cant effect of the variable on all endogenous variables. First, Organisational
Table 5. Structural Model Results.

2
Hypothesis R Q2 Suggested Path t-value p-Value Variance
Effect Coefficient (Bootstrap) Explained
PI 0.233 0.020
H3: IE → PI 0.333 2.831 0.005*** 11.56%
H6: OEC → PI + 0.336 2.960 0.002*** 11.76%
EAUB 0.230 0.097
H1: PI → EAUB − −0.281 2.370 0.009*** 11.18%
H4: IE → EAUB −0.158 1.767 0.077* 4.09%
The Influence of Auditors’ Commitment
H7: OEC → EAUB − −0.230 2.269 0.012** 6.78%

Age → EAUB 0.159 1.849 0.065* 0.58%
Gender → EAUB 0.103 1.408 0.159 0.39%
SRB 0.394 0.193
H2: PI → SRB − −0.106 0.751 0.226 3.17%
H5: IE → SRB 0.097 1.370 0.171 0.15%
H8: OEC → SRB − −0.458 4.591 0.000*** 25.03%
H9: EAUB → SRB + 0.198 1.703 0.044** 7.07%
Age → SRB 0.000 0.010 0.992 0.00%
Gender → SRB 0.210 2.588 0.010** 4.05%
R2, explanatory power; Q2, cross-validated redundancy index.

p values to test the hypotheses are calculated using a one-tailed test, except for H3, H4, H5 and the control variables age and gender, for which
two-tailed tests were used.
*significant at the 0.1 level; **significant at the 0.05 level; ***significant at the 0.01 level.
41
Ethical Culture has a positive effect in that it enhances auditors’ commitment

to serving the public interest. Second, a negative relationship exists between
perceived Organisational Ethical Culture and the Ethical Acceptability of
Unprofessional Behaviour. Third, Organisational Ethical Culture is signifi-
cantly negatively related to Self-Reported Unprofessional Behaviour. This
means that auditors who perceive the ethical culture of their organisation to
be strong consider unprofessional practices to be unethical, and report that
they less frequently engage in them.
Finally, the existence of a positive significant relationship between
the Ethical Acceptability of Unprofessional Behaviour and Self-Reported
Unprofessional Behaviour indicates that those auditors who consider unpro-
fessional practices to be more ethical than their peers apparently engage in
those practices more frequently.

The control variable age was not significant at the 0.05 level. Meanwhile,
our results reveal that female auditors report that they more frequently
engage in unprofessional practices (t = 2.588 and p = 0.010). We conducted
the analyses with and without the control variables from the model (only the
results including the control variables were reported). PLS results were the
same when the control variables were excluded from the proposed model,
except for the significance level in the relationship between Independence
Enforcement and Ethical Acceptability of Unprofessional Behaviour. When
age and gender were excluded, the negative relationship between auditors’
attitudes toward independence enforcement and their ethical acceptability of
unprofessional behaviour was significant at the 0.05 level.
Table 5 also shows the explanatory power (R2), the cross-validated redun-
dancy index (Q2) and the variance explained by each of the predictive vari-
ables. The R2 of the endogenous variable Public Interest Commitment is 0.233,
the R2 for Ethical Acceptability of Unprofessional Behaviour is 0.230 and the
R2 for Self-Reported Unprofessional Behaviour is 0.394. Given the fact that
a large number of factors not included in this model could affect these vari-
ables, their explanatory power is considered to be substantial.
In addition, we calculated the Q2 for the endogenous variables, as
suggested by Chin (2010), and our results show that Q2 is greater than
0 for the three endogenous variables, which implies that the model has
predictive power.
Finally, by decomposing the variance explained by each of the predictors,
we observed, first, that both Independence Enforcement and Organisational
Ethical Culture have similar positive effects on Public Interest Commitment.
Second, it is noteworthy that Public Interest Commitment is the variable that
explains auditors’ Ethical Acceptability of Unprofessional Behaviour to the
greatest extent, while the perceived Organisational Ethical Culture is the pre-
dictor that explains auditors’ Self-Reported Unprofessional Behaviour to the
greatest extent. Auditors’ Ethical Acceptability of Unprofessional Behaviour
also significantly explains their Self-Reported Unprofessional Behaviour.
Additional Analysis: Social Desirability Bias
One of the major difficulties involved in researching sensitive issues, such

as unethical behaviour, is the social desirability bias. Bampton and Cowton
(2013) strongly recommend controlling or checking for social desirability bias
in empirical studies conducted in the field of accounting ethics. This phenom-
enon occurs when a respondent recognises socially desirable and acceptable

behaviours and denies participation in socially undesirable actions (Phillips
& Clancy, 1972). A number of studies have reported that respondents usually
consider themselves to be more ethical than their peers (Tyson, 1992). With
this in mind, self-reported responses as well as observed responses, in which
the respondent is asked to report on others’ behaviour, are typically used in
questionnaires involving sensitive issues, so as to reduce respondents’ social
desirability bias (Cohen et al., 1998; Pierce & Sweeney, 2010). These stud-
ies assume that responses to the questions regarding peers’ behaviour would
provide a reliable approximation of subjects’ own behaviour (Shafer, Morris,
& Ketchand, 1999).
We have repeated the PLS analysis for the proposed model (Fig. 1) employ-
ing respondents’ beliefs about other auditors engaging in the unprofessional
practices, instead of self-reported responses, as an alternative measure for
auditors’ own behaviour. Respondents had to indicate the frequency at which
they believe that auditors commit the three practices presented in Table 2. The
mean response for this variable (2.782) was statistically higher (t = −19.315,
p < 0.001) than the mean response for the self-reported behaviour (1.465).
Participants of the study report that the frequency of other auditors engaging
in this behaviour is higher. This result may indicate that participants might
respond in a socially desirable way, particularly by underreporting unethical
behaviour (Wouters et al., 2014).
The latent variable Auditors’ Unprofessional Behaviour (proxy-report)
was measured with reflective indicators. This construct was proven to be
reliable, in terms of individual item reliability (the three items loaded above
0.7 and were significant), construct reliability (CR = 0.958 and Cronbach’s
alpha = 0.935), convergent validity (AVE = 0.885), and discriminant validity.
No indicator loads more highly for another construct than it does for the
latent construct Auditors’ Unprofessional Behaviour (proxy-report), while the

square root of the construct’s AVE is greater than the construct’s correlation
with other constructs. The explanatory power of this model for the endoge-
nous variable Auditors’ Unprofessional Behaviour (proxy-report) (R2 = 0.208)
was lower than in the previous model.
Although the effects on the endogenous variables Public Interest
Commitment and Ethical Acceptability of Unprofessional Behaviour did not
differ from the results presented above, results on auditors’ behaviours varied
in considering respondents’ beliefs about other auditors engaging in the unpro-
fessional practices instead of self-reported behaviour. A significant negative
relationship exists between auditors’ belief in serving the public interest and
auditors’ behaviour. The relationship between Public Interest Commitment
and behaviour (H2) was supported for the case of respondents’ beliefs that
other auditors engage in the act but not for the case of self-reported behav-
iour. A possible explanation for these results could be found in the fact that
Public Interest Commitment may be related to auditors’ professional commit-
ment, this is, the degree to which auditors care about the profession. Auditors
that show a high public interest commitment, and presumably a high profes-
sional commitment, might feel that the disclosure of unethical work behav-
iour could have negative consequences for their profession and, therefore,
could engage in image management (Pierce & Sweeney, 2005; Power, 2003).
Finally the positive relationship between the acceptability of practices and
behaviours (H9) was not supported when the variable Auditors’ Unprofessional
Behaviour (proxy-report) instead of self-reported behaviours was considered.
This difference may be attributed to a social desirability bias, wherein the less
acceptable a practice is considered, the less one’s engagement in it is admit-
ted. This bias must be taken into account when interpreting the above results.
The different results obtained in H2 and H9when Auditors’ Unprofessional
Behaviour (proxy-report) was considered requires further analyses employing
alternative measures to control for social desirability bias, such as the Social
Desirability Index Questionnaire (Crowne & Marlowe, 1960).
Discussion and Conclusions

The present study explores auditors’ professional attitudes and behaviours. It
tests the influence of organisational ethical culture, public interest commit-
ment and independence enforcement beliefs on auditors’ acceptance of and
engagement in practices that compromise their objectivity.
The results of this study reveal that auditors who have a positive attitude
toward independence legal enforcement show a higher public interest com-
mitment. These results may indicate that Spanish auditors believe that in
order to advance the accounting profession’s values, such as serving the pub-
lic interest, it is necessary to rigorously enforce independence rules.
This finding may reflect cultural features. In Spain, like in other European
continental countries, the regulatory structure is based on the civil code. In
such countries, the ethical guidelines for auditing have traditionally been
established by legal regulations and, therefore, auditors may equate meeting
the public interest with strict compliance with legal standards. This would be
in line with prior research into code-law jurisdictions (Gendron et al., 2006),
and reflects the strong rule orientation of Spanish auditors that has been
highlighted in previous studies (Espinosa-Pike, 2001).

Several practical implications for regulators can be drawn from these
results. It seems that regulatory efforts to improve auditors’ behaviours by
focusing on the rigorous enforcement of independence rules have been inter-
nalised by auditors. This legalistic focus must be taken into account for an
effective application of ethical guidelines and audit regulations. International
ethical standards for professional accountants, such as those in the code
of ethics proposed by the International Federation of Accountants (IFAC,
2016), follow a principles-based approach. Taken into account the results of
our study, we suggest that the effective application of principle-based ethical
guidelines in legalistic countries, such as Spain, will also require enhancing
auditors’ ethical reasoning abilities.
The results of our structural equation model also reveal that auditors with
high public interest commitment present lower ethical acceptability of unpro-
fessional practices. These results suggest the value of effective professional
socialisation, in which the public service is internalised, for ethical decision
making. Professional organisations and audit firms should take on the chal-
lenge of strengthening auditors’ acceptance of their professional responsibil-
ity to uphold the public interest at every experience level.
The findings of this study also reveal a significant effect of the organisa-
tional ethical culture on auditors’ professional and ethical attitudes. Auditors
who perceive that their organisations have a strong ethical culture have greater
commitment to the public interest. Moreover, our results indicate that audi-
tors who perceive their organisations as having strong organisational ethi-
cal cultures reject unprofessional practices to a larger extent, and also report
a lower incidence of engaging in those practices. These results support the
growing belief that organisational context has the power to influence indi-
viduals’ reasoning as well as behaviour. Accordingly, this study reinforces the
need to understand audit practice in the organisational context in which it

occurs.
This study shows that audit firms have a major role to play in establishing
mechanisms that foster auditors’ compliance with ethical standards. These
measures may include the ethical training of employees, and employing per-
formance evaluation and compensation criteria that recognise auditors’ levels
of commitment to ethical principles. Top managers in audit firms play piv-
otal roles in fostering an ethical culture that highlights ethical values such as
honesty and integrity. When partners emphasise auditors’ commitment to the
public interest, professional attitudes are transmitted to audit personnel, and
this fosters ethical behaviours.
Therefore, in view of these results, this study supports internation-
ally implemented measures, such as the International Standard of Quality

Control. This standard promotes organisational cultures within audit firms
that foster compliance with fundamental ethical principles.
Finally, the significant positive relationship between the acceptability
of questionable practices and self-reported behaviours indicates that those
auditors that consider the practices that compromise their objectivity to
be more ethically acceptable are more likely to engage in such practices.
This result may indicate that the moral evaluation of an action is a good
predictor of actual behaviour, as it has been recognised in extant literature
(Donnelly, Quirin, & O’Bryan, 2003). Although this result may be attrib-
uted to a social desirability bias, it may also highlight the importance of
enhancing auditors’ ethical judgement, because in order to meet profes-
sional requirements, auditors must be able to appropriately judge which
actions are ethical.
Therefore, in view of the influence that auditors’ professional values
have on their ethical judgements, and the effect that these judgements have,
in turn, on auditors’ behaviours, the profession as a whole might consider
efforts that reinforce the principle of serving the public interest and auditors’
ethical judgement. In this regard, undertaking ethical training at universities
may be an effective measure for enhancing the professional values and ethi-
cal attitudes of future auditors. Furthermore, the requirement of continuous
professional development for all auditors in practice could potentially boost
professional ethics training among those who have already joined the audit-
ing profession.
Our study is subject to several limitations. The questionnaire method
employed in the study implies that data have been gathered from the
same source. This condition is believed to cause the potential problems of
common method bias that often influence research results. Some procedural
approaches (separating the measurements of the variables, employing differ-
ent scale anchors and including reverse-scored items in the questionnaire) as
well as statistical approaches (Harman’s Single Factor Test) were taken to
reduce the effects of method bias.
This study relies on both self-reported behaviour as well as respondents’
beliefs that other auditors engage in the act to measure engagement in unpro-
fessional behaviour. Although we took measures to mitigate the social desir-
ability problem by ensuring anonymity and using an online survey addressed
directly to the authors, auditors may have answered in a socially desirable way
and engaged in image management (Pierce & Sweeney, 2005; Power, 2003).
Therefore, another limitation of our study is that the results might be affected
by this bias.
It is important to note that although our questionnaire was developed by
considering instruments from prior literature, several questions were devel-
oped by the authors to address audit-context-specific issues. Shortcomings
in the instruments currently employed in the field of accounting and audit-
ing ethics open up new research opportunities, as developing new reliable
measures that are specific to the auditing context will help improve empirical
studies.
Another limitation relates to the context of our study. The professional
attitudes and perceptions of Spanish auditors may differ from these of
auditors working in other cultural contexts. Although an important stream
of research has dealt with auditors’ ethical decision making, most of this
research has been carried out in Anglo-American countries. Given this back-
ground, international comparisons that highlight the influence of cultural
values, as well as the social and legal characteristics of different countries,
could contribute to an understanding of the audit profession in the global
context of financial markets.
Moreover, although a sample comprised mainly of high-ranking auditors
offers great research opportunities, future studies should extend our analysis
to other staff levels in audit firms. The professional values and perceptions of
organisational ethical cultures may be different among less experienced audi-
tors, due to their relative inexperience or the socialisation effects within the
audit profession and audit firms. Similarly, the relationships between the vari-
ables under study may be affected by auditors’ level of expertise. Therefore,
extending the sample and analysing the moderating effect of auditors’ exper-
tise would be of interest in finding a means to promote professionalism and
ethical behaviour in accounting.
References
Ajzen, I. (1991). The theory of planned behaviour. Organizational Behavior and Human Decision
Processes, 50, 179–211.
Alleyne, P., Hudaib, M., & Pike, R. (2013). Towards a conceptual model of whistle-blowing
intentions among external auditors. The British Accounting Review, 45(1), 10–23.
Anderson-Gough, F., Grey, F., & Robson, K. (2000). In the name of the client: The service ethic
in two professional services firms. Human Relations, 53(9), 1151–1174.
Aranya, N., Pollock, J., & Amernic, J. (1981). An examination of professional commitment in
public accounting. Accounting, Organizations and Society, 6(4), 271–280.
Bampton, R., & Cowton, C. J. (2013). Taking stock of accounting ethics scholarship: A review
of the journal literature. Journal of Business Ethics, 114(3), 549–563.
Barclay, D. W., Higgins, C. A., & Thompson, R. (1995). The partial least squares approach to
causal modeling: Personal computer adoption and use as illustration. Technology Studies,
2(2), 285–309.
Barrainkua, I., & Espinosa-Pike, M. (2015). New insights into underreporting of time: The audit
partner context. Accounting, Auditing & Accountability Journal, 28(4), 494−514.
Beattie, V., Fearnley, S., & Hines, T. (2013). Perceptions of factors affecting audit quality in the
post-SOX UK regulatory environment. Accounting and Business Research, 43(1), 56–81.
Bobek, D. D., Hageman, A. M., & Radtke, R. R. (2015). The influence of roles and organiza-
tional fit on accounting professionals’ perceptions of their firms’ ethical environment.
Journal of Business Ethics, 126(1), 125–141.
Bollen, K., & Lennox, R. (1991). Conventional wisdom on measurement: A structural equation
perspective. Psychological Bulletin, 110(2), 305−314.
Carmines, E. G., & Zeller, R. A. (1979). Reliability and validity assessment. Beverly Hills: Sage.
Carnegie, G. D., & Napier, C. J. (2010). Traditional accountants and business professionals:
Portraying the accounting profession after Enron. Accounting, Organizations and Society,
35(3), 360–376.
Cenfetelli, R. T., & Bassellier, G. (2009). Interpretation of formative measurement in information
systems research. Management Information Systems Quarterly, 33(4), 689–707.
Chin, W. W. (1998). The partial least squares approach to structural equation modeling. In G.
A. Marcoulides (Ed.), Modern methods for business research (pp. 295–358). Mahwah, NJ:
Lawrence Erlbaum Associates.
Chin, W. W. (2010). How to write up and report PLS analyses. In V. E. Vinzi, W. W. Chin, J.
Henseler, and H. Wang (Eds.), Handbook of partial least squares: Concepts, methods and
applications in marketing and related fields (pp. 655–690). Berlin: Springer.
Clikeman, P. M., Schwartz, B. N., & Lathan, M. H. (2001). The effect of the 150-hour require-
ment on new accountants’ professional commitment, ethical orientation, and profession-
alism. Critical Perspectives on Accounting, 12(5), 627–645.
Cohen, J. R., Pant, L. W., & Sharp, D. J. (1998). The effect of gender and academic discipline
diversity on the ethical evaluations, intentions and ethical orientation of potential public
accounting recruits. Accounting Horizons 12(3), 250–270.
Cohen, J. R., Pant, L. W., & Sharp, D. J. (2001). An examination of differences in ethical
decision-making between Canadian business students and accounting professionals.

Cooper, D. J., & Neu, D. (2006). Auditor and audit independence in an age of financial scandals.
Advances in Public Interest Accounting, 12, 1–15.
Cooper, D. J., & Robson, K. (2006). Accounting, professions and regulation: Locating the sites
of professionalization. Accounting, Organizations and Society, 31(4), 415–444.
Copeland, M. K. (2015). The importance of ethics and ethical leadership in the accounting pro-
fession. In C. Jeffrey (Ed.), Research on professional responsibility and ethics in accounting
(Vol. 19, pp. 61–98). Bingley, UK: Emerald Group Publishing Limited.
Crowne, D. P., & Marlowe, D. (1960). A new scale of social desirability independent of psycho-
pathology. Journal of Consulting Psychology 24, 349–354.
Davenport, L., & Dellaportas, S. (2009). Interpreting the public interest: A survey of profes-
sional accountants. Australian Accounting Review, 19(1), 11–23.
DeZoort, F. T., & Lord, A. T. (1997). A review and synthesis of pressure effects research in
accounting. Journal of Accounting Literature, 16, 28–85.
Diamantopoulos, A., & Winklhofer, H. (2001). Index construction with formative indicators: An
alternative to scale development. Journal of Marketing Research, 37, 269–277.
Donnelly, D. P., Quirin, J. J., & O’Bryan, D. (2003). Auditor acceptance of dysfunctional audit
behavior: An explanatory model using auditors’ personal characteristics. Behavioral

Research in Accounting, 15(1), 87–110.
Douglas, P. C., Davidson, R. A., & Schwartz, B. N. (2001). The effect of organizational culture
and ethical orientation on accountants’ ethical judgments. Journal of Business Ethics,
34(2), 101–121.
Elias, R. Z. (2006). The impact of professional commitment and anticipatory socialization on
accounting students’ ethical orientation. Journal of Business Ethics, 68(1), 83–90.
Elias, R. Z. (2008). Auditing students’ professional commitment and anticipatory socialization
and their relationship to whistleblowing. Managerial Auditing Journal, 23(3), 283–294.
Espinosa-Pike, M. (2001). El papel de la universidad en la mejora del comportamiento ético de
los profesionales contables. Spanish Accounting Review, 4(7), 53–74.
Espinosa-Pike, M., & Barrainkua, I. (2016). An exploratory study of the pressures and ethical
dilemmas in the audit conflict. Spanish Accounting Review, 19(1), 10–20.
Ferrell, O. C., & Gresham, L. G. (1985). A contingency framework for understanding ethical
decision making in marketing. Journal of Marketing, 49(summer), 87–96.
Ford, R. C., & Richardson, W. D. (1994). Ethical decision making: A review of the empirical
literature. Journal of Business Ethics, 13(3), 205–221.
Fornell, C. G., & Larcker, D. F. (1981). Evaluating structural equation models with unobservable
variables and measurement error. Journal of Marketing Research, 18(1), 39–50.
Gaa, J. C. (2006). Integrity, auditor independence, and the protection of investors. Advances in
Public Interest Accounting, 12, 27–47.
Garcia-Benau, M. A., De Fuentes Barberá, C., & Vico Martinez, A. (2008). The development
of the auditing profession in Spain: Fast evolution in a highly regulated environment. In
R. Quick, S. Turley, and M. Willekens (Eds.), Auditing, trust and governance: Developing
regulation in Europe (pp. 186–205). London: Routledge.
Gendron, Y., Suddaby, R., & Lam, H. (2006). An examination of the ethical commitment
of professional accountants to auditor independence. Journal of Business Ethics, 64(2),
169–193.
Hair Jr., J. F., Sarstedt, M., Hopkins, L., & Kuppelwieser, V. G. (2014). Partial least squares struc-
tural equation modeling (PLS-SEM): An emerging tool in business research. European
Business Review, 26(2), 106–121.
Hanlon, G. (1996). Casino capitalism and the rise of the commercialised service class – An exam-
ination of the accountant. Critical Perspectives on Accounting, 7, 339–363.
Holm, C., & Zaman, M. (2012). Regulating audit quality: Restoring trust and legitimacy.
Accounting Forum, 36(1), 51–61.
Humphrey, C., Moizer, P., & Turley, S. (2006). Independence and competence? A critical ques-
tioning of auditing. Advances in Public Interest Accounting, 12, 149–167.
Hunt, S. D., & Vitell, S. (1986). A general theory of marketing ethics. Journal of Macromarketing,
6(1), 5–16.
Instituto de Contabilidad y Auditoría de Cuentas. (2016). Situación de la Auditoría en España –
2015 (BOICAC Nº105/March 2016).
International Auditing and Assurance Standards Board (IAASB). (2014). A framework for audit
quality: Key elements that create an environment for audit quality. Retrieved from: https://
www.ifac.org/publications-resources/framework-audit-quality-key-elements-create-
environment-audit-quality. Accessed 6 June 2015.
International Federation of Accountants (IFAC). (2016). Handbook of the code of ethics for
professional accountants. New York: USA.
Jarvis, C. B., MacKenzie, S. B., & Podsakoff, P. M. (2003). A critical review of construct indi-
cators and measurement model misspecification in marketing and consumer research.
Journal of Consumer Research, 30(2), 199–218.
Jeffrey, C., Weatherholt, N., & Lo, S. (1996). Ethical development, professional commitment,
and rule observance attitudes: A study of auditors in Taiwan. The International Journal
of Accounting, 31(3), 365–379.
Jenkins, J. G., & Lowe, D. J. (2011). Auditors as advocates for their clients: Perceptions of the
auditor-client relationship. Journal of Applied Business Research, 15(2), 73–78.
Johnstone, K. M. Sutton, M. H., & Warfield, T. D. (2001). Antecedents and consequences of
independence risk: Framework for analysis. Accounting Horizons, 15(1), 1–18.
Jones, T. M. (1991). Ethical decision making by individuals in organizations: An issue-contingent
model. Academy of Management Review, 16(2), 366–395.
Jones, J., Massey, D. W., & Thorne, L. (2003). Auditors’ ethical reasoning: Insights from past
research and implications for the future. Journal of Accounting Literature, 22, 45–103.
Kaplan, S. E., & Whitecotton, S. M. (2001). An examination of auditors’ reporting intentions
when another auditor is offered client employment. Auditing: A Journal of Practice &
Theory, 20(1), 45–63.
Koch, C., Weber, M., & Wüstemann, J. (2012). Can auditors be independent? Experimental evi-
dence on the effects of client type. European Accounting Review, 21(4), 797–823.
Larson, M. S. (1977). The Rise of Professionalism: A sociological analysis. Berkeley: University
of Berkeley Press.
Lee, L., Petter, S., Fayard, D., & Robinson, S. (2011). On the use of partial least squares path
modeling in accounting research. International Journal of Accounting Information
Systems, 12(4), 305–328.
Lord, A., & DeZoort, F. T. (2001). The impact of commitment and moral reasoning on audi-
tors’ responses to social influence pressure. Accounting, Organizations, and Society, 26(3),
215–235.
Martinov-Bennie, N., & Pflugrath, G. (2009). The strength of an accounting firm’s ethical environ-
ment and the quality of auditors’ judgments. Journal of Business Ethics, 87(2), 237–253.
McPhail, K. (2006). Ethics and the individual professional accountant. A literature Review.
Edinburgh: Institute of Chartered Accountants of Scotland.
Mintz, S. (2015). Whistleblowing considerations for external auditors under Dodd-Frank: A
blueprint for future research. In C. Jeffrey (Ed.), Research on professional responsibility
and ethics in accounting (Vol. 19, pp. 99–128). Emerald Group Publishing Limited.
Nunnally, J. (1978). Psychometric theory (2nd ed.). New York: McGraw-Hill.

O’Fallon, M. J., & Butterfield, K. D. (2005). A review of the empirical ethical decision-making
literature: 1996–2003. Journal of Business Ethics, 59(4), 375–413.
Parker, L. (1987). An historical analysis of ethical pronouncements and debate in the Australian
accounting profession. Abacus, 23, 126–140.
Petter, S., Straub, D., & Rai. A. (2007). Specifying formative constructs in information systems
research. Management Information Systems Quarterly, 31(4), 623–656.
Phillips, D. L., & Clancy, K. J. (1972). Some effects of ‘social desirability’ in survey studies.
American Journal of Sociology, 77(5), 921–40.
Pierce, B., & Sweeney, B. (2005). Management control in audit firms – partners’ perspectives.
Management Accounting Research, 16(3), 340–370.
Pierce, B., & Sweeney, B. (2010). The relationship between demographic variables and ethical
decision making of trainee accountants, International Journal of Auditing, 14(1), 79–99.
Porter, L. W., Steers, R. M., Mowday, R. T., & Boulian, P. V. (1974). Organizational commitment,
job satisfaction, and turnover among psychiatric technicians. Journal of applied psychol-
ogy, 59(5), 603–609.
Power, M. K. (2003). Auditing and the production of legitimacy. Accounting, Organizations and
Society, 28(4), 379–394.
Rest, J. (1986). Moral development: Advances in research and theory. New York: Preager
Publishers.
Ringle, C. M., Wende, S., & Becker, J. M. (2014). Smartpls 3.0. Hamburg: SmartPLS. Retrieved
from: http://www.smartpls.com
Roberts, N., & Thatcher, J. (2009). Conceptualizing and testing formative constructs: Tutorial
and annotated example. The Data Base for Advances in Information Systems, 40(3), 9–39.
Rodgers, W., & Guiral, A. (2011). Potential model misspecification bias: Formative indicators enhanc-
ing theory for accounting researchers. The International Journal of Accounting, 46(1), 25–50.
Roldan, J. L., & Sanchez-Franco, M. J. (2012). Variance-based structural equation modeling:
Guidelines for using partial least squares in information systems research. In M. Mora,
O. Gelman, A. Steenkamp and M. Raisinghani (Ed.), Research methodologies, innovations
and philosophies in software systems engineering and information systems (pp. 193–221).
Hershey PA: Information Science Reference.
Shafer, W. E., Morris, R. E., & Ketchand, A. A. (1999). The effects of formal sanctions on audi-
tor independence. Auditing: A Journal of Practice & Theory, 18, 85–101.
Shafer, W. E., Lowe, D. J., & Fogarty, T. J. (2002). The effects of corporate ownership on public
accountants’ professionalism and ethics. Accounting Horizons, 16(2), 109–124.
Shafer, W. E. (2009). Ethical climate, organizational-professional conflict and organizational
commitment: a study of Chinese auditors. Accounting, Auditing & Accountability Journal,
22(7), 1087–110.
Shafer, W. E., & Simmons, R. S. (2011). Effects of organizational ethical culture on the ethical
decisions of tax practitioners in mainland China. Accounting, Auditing & Accountability
Journal, 24(5), 647–668.
Shafer, W. E., Poon, M. C., & Tjosvold, D. (2013). An investigation of ethical climate in a
Singaporean accounting firm. Accounting, Auditing & Accountability Journal, 26(2),
312–343.
Shafer, W. E. (2015). Ethical climate, social responsibility, and earnings management. Journal of
Business Ethics, 126(1), 43–60.
Shapeero, M., Koh, H. C., & Killough, L. N. (2003). Underreporting and premature sign-off in
public accounting. Managerial Auditing Journal, 18(6/7), 478–489.
Sierra Molina, G., & Santa María Pérez, M. (2002). Audit professional judgements: The audi-
tor’s individual differences. Spanish Accounting Review, 5(10), 179–203.
Sikka, P. (2004). Some questions about the governance of auditing firms. International Journal of
Disclosure and Governance, 1(2), 186–200.
Spalding Jr., A. D., & Oddo, A. (2011). It’s time for principles-based accounting ethics. Journal
of Business Ethics, 99(1), 49–59.
Suddaby, R., Gendron, Y., & Lam, H. (2009). The organizational context of professionalism in
accounting. Accounting, Organizations and Society, 34(3), 409–427.
Svanberg, J., & Öhman, P. (2013). Auditors’ time pressure: Does ethical culture support audit
quality? Managerial Auditing Journal, 28(7), 572–591.
Sweeney, B., Arnold, D., & Pierce, B. (2010). The impact of perceived ethical culture of the firm
and demographic variables on auditors’ ethical evaluation and intention to act decisions.
Taylor, M. H., DeZoort, F. T., Munn, E., & Thomas, M. W. (2003). A proposed framework
emphasizing auditor reliability over auditor independence. Accounting Horizons, 17(3),

257–266.
Thorne, L., Massey, D. W., & Magnan, M. (2003). Institutional context and auditor’s moral rea-
soning: A Canada–US comparison. Journal of Business Ethics, 43(4), 305–21.
Treviño, L. K. (1990). A cultural perspective on changing and developing organizational ethics.
Research in Organizational Change and Development, 4, 195–230.
Treviño, L. K., Butterfield, K. D., & McCabe, D. L. (1998). The ethical context in organiza-
tions: Influences on employee attitudes and behaviours. Business Ethics Quarterly, 8(3),
447–476.
Tyson, T. (1992). Does believing that everyone else is less ethical have an impact on work behav-
ior? Journal of Business Ethics, 11(9), 707–717.
Wouters, K., Maesschalck, J., Peeters, C. F., & Roosen, M. (2014). Methodological issues in the
design of online surveys for measuring unethical work behavior: Recommendations on
the basis of a split-ballot experiment. Journal of Business Ethics, 120(2), 275–289.
Wyatt, A. R. (2004). Accounting professionalism-they just don’t get it. Accounting Horizons,
18(1), 45–53.

Research On Professional Responsibility and Ethics in Accounting

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Research On Professional Responsibility and Ethics in Accounting

Uploaded by

Copyright:

Available Formats

Research on Professional Responsibility and Ethics in

*Related content and download information correct at time of download.

Values and Behaviour

Itsaso Barrainkua and Marcela Espinosa-Pike

This study explores auditors’ professional attitudes and behaviours. It tests

Research on Professional Responsibility and Ethics in Accounting, Volume 21, 17–52

since auditors’ public interest commitment is related to their ethical deci-

firms’ ethical culture; ethical decision making; objectivity

have mostly focused on analysing accountants’ professional commitment and

sures that they encounter when carrying out their duties.

These findings also have important implications for professional organisa-

Previous Literature and Hypothesis

ously identified. According to this ethical decision-making model, the ethical

Public Interest Commitment

authors found that accountants’ education processes appear to have success-

the public interest and their engagement in unprofessional behaviour.

authors, commitment to independence enforcement refers to the extent to

Organisational Ethical Culture

organisational ethical cultures of audit firms are gaining increased attention

actions and a greater perceived unethical tone at the top of an organisation

their perceptions of the importance of ethics and social responsibility, and

Ethical Acceptability of Unprofessional Behaviour

Previous research into ethical decision making in accounting has found

Other Control Variables

H1(−) H9(+) Age

Fig. 1. Research Model.

auditors’ behaviours. In order to reduce the social desirability bias in audi-

We distributed a survey questionnaire to Spanish auditors, who were mem-

as surrogates of non-respondents. No statistically significant differences were

The variable Public Interest Commitment is designed to assess the degree to

the ethical environment instrument developed by Treviño et al. (1998), which

Table 1 displays descriptive statistics for the variables of the study.

Table 1. Descriptive Statistics.

Public interest commitment 3.346 0.556

Partial Least Squares Results

We tested the research model proposed in Fig. 1 by using PLS, a variance-

Table 2. Measurement Model.

Independence Enforcement (IE)

independence impairs audit

Ethical Acceptability of Unprofessional Behaviour (EAUB)

Accept pressures from superiors to 0.812 13.505 0.715 0.841 0.640

Formative Indicators Weight T-Statistic VIF Loading T-Statistic

Public Interest Commitment (PI)

Note: CR, composite reliability; AVE, average variance extracted.

Internal consistency was assessed by analysing composite reliability and

Table 3. Correlation Matrix Between Latent Variable Scores

IE1 0.757 0.091 −0.219 −0.076

OEC4 0.054 0.887 −0.223 −0.468

Table 4. Discriminant Validity.

explained by antecedent constructs), and the Q2 (redundancy) test for predic-

Ethical Culture Unprofessional

Fig. 2. Structural Model Results.

the indicators that most influence the Ethical Acceptability of Unprofessional

Table 5. Structural Model Results.

H7: OEC → EAUB − −0.230 2.269 0.012** 6.78%

R2, explanatory power; Q2, cross-validated redundancy index.

Ethical Culture has a positive effect in that it enhances auditors’ commitment

those practices more frequently.

Additional Analysis: Social Desirability Bias

One of the major difficulties involved in researching sensitive issues, such

enon occurs when a respondent recognises socially desirable and acceptable

latent construct Auditors’ Unprofessional Behaviour (proxy-report), while the

Discussion and Conclusions