Cognitive moral development and auditor independence

Article Abstract:

Most studies on auditor independence assumed that auditors always behave as rational, economic agents without considering the conflicts between economic self-interest and moral principles. To address this lacuna, a study was conducted to investigate the effect of cognitive moral development on auditor independence in the context of a common psychological model of ethical behavior. In a field experiment, more than 300 auditors completed a questionnaire measuring moral development and resolved an ethical dilemma that involves auditor independence. Findings revealed that auditor level of moral development influenced auditors' sensitivity to ethical issues and independence judgments. Moreover, the impact of the audit firm was found to moderate the relationship between moral development and independence.

Autonomy (Psychology), Auditors, Moral development, Cognitive learning

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What's in a name? Everything

Article Abstract:

'Reputation: Realizing Value from the Corporate Image,' focuses on the importance of maintaining a good reputation in business. A good image cannot be tarnished easily if corporations know how to take care of it. Although corporations are apt to commit major mistakes such as an oil spill or cyanide poisonings, it can rebuild its name. They can do this by promoting trust, empowering employees, inspiring pride, championing quality and being committed to the community.

Analysis, Corporate image

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Auditor brand name reputations and industry specializations

Article Abstract:

A study was conducted to find out if brand name reputation and industry specialization affect audit fees. The hypothesis is tested using data from a sample of 1,484 Australian publicly listed companies served by Big Eight auditors. Results showed that the earnings of specialist Big Eight auditors are 34% higher than those of non-specialist Big Eight auditors. The earnings of Big Eight firms with a good brand name is 30% higher than those of non-Big Eight auditors.

Accounting firms, Accounting services, Brand name products, Brand names, Professional fees

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