Ethical Orientation, Ethical Reasoning, Professional Commitment, Audit Professionalism, and Audit Effectiveness of CPAs in Thailand

Ussahawanitchakit, Phapruke, Journal of International Business and Economics

1. INTRODUCTION

Nowadays, auditors have become significant professionals who encourage stakeholders to ensure and accept the quality and reliability of financial statements and reports. They investigate the advantages and benefits of firms' financial information in all activities by auditing business transaction through the implementation of accounting and auditing standards, and other related regulations, rules, and laws. Then, auditors' ethical orientation, professional commitment, ethical reasoning, and audit professionalism have influenced their audit effectiveness, audit success, audit sustainability, and audit survival in the competitive markets and environments. Accordingly, greater ethical orientation, ethical reasoning, professional commitment, and audit professionalism play an important role in explaining and driving higher audit effectiveness. Here, ethical orientation is the independent variable; ethical reasoning is the mediating variable; both professional commitment and audit professionalism are the moderating variables; and audit effectiveness is the dependent variable of the study.

In this study, ethical orientation firstly refers to the approach an individual takes to making ethical judgment through ethical perceptions and sensitivity with the ability to recognize the ethical nature of a situation in a profession (Clikeman et al., 2001). It includes idealism, the belief that good consequences can always be obtained about violating moral guidelines, and relativism, the belief that there are different ways to look at morality via the adoption of universal guiding principles. Secondly, ethical reasoning refers to a cognitive operation relating to citizen rationality that is concerned with right and wrong, and the value of rules and laws (Coleman, 2006). It needs to systematically balance competing interests and make choices between equally compelling values. Thirdly, professional commitment refers to the relative strength of identification with and involvement in a profession (Aranya et al., 1981). It is concerned with a strong belief in and acceptance of the profession's goals and values, a willingness to exert considerable effort on behalf of the profession, and a strong desire to maintain membership in the profession. Fourthly, professional commitment refers to the relative strength of identification with and involvement in a profession (Aranya et al., 1981). It is concerned with a strong belief in and acceptance of the profession's goals and values, a willingness to exert considerable effort on behalf of the profession, and a strong desire to maintain membership in the profession. Lastly, audit professionalism refers to a preference by exercising individual professional judgment in undertaking auditing tasks via the maintenance, sustainability and survival of professional self-regulations and self-forces (Askary, 2006). It is a definable body of knowledge, specialized and advanced education, a formal organization, a code of ethics, standards for practices, a procedure for disciplining members, and public acceptances.

Interestingly, ethical orientation, professional commitment, ethical reasoning, audit professionalism, and audit effectiveness play significant roles in this study. Hence, the objective of this study is to examine the relationships among ethical orientation, professional commitment, ethical reasoning, audit professionalism, and audit effectiveness of certified public accountants (CPAs) in Thailand. Ethical orientation is the independent variable; ethical reasoning is the mediating variable; professional commitment and audit professionalism are the moderating variables; and audit effectiveness is the dependent variable of the study. The key research questions are: (1) How ethical orientation has an impact on ethical reasoning, (2) How ethical reasoning has an effect on audit effectiveness, (3) Whether professional commitment is the moderator of the ethical orientation-ethical reasoning relationships, (4) Whether audit professionalism is the moderator of the ethical reasoning-audit effectiveness relationships, and (5) Whether the research relationships are positive.

This study is outlined as follows. Literature review of ethical orientation, professional commitment, ethical reasoning, audit professionalism, and audit effectiveness is addressed and examined; and significant research hypotheses developments are presented. Next, the research methods used to test the hypotheses are discussed including sample selection and data collection procedure, variables and methods. The results of the study derived from 214 certified public accountants (CPAs) in Thailand are indicated and their reasonable discussions with existing literature supports are shown. Lastly, the study concludes by discussing implications for theories and practices, identifying limitations of the study, and providing suggestions and directions for future research.

2. LITERATURE REVIEWS AND HYPOTHESES DEVELOPMENTS

Here, the effects of ethical orientation and ethical reasoning on audit effectiveness of CPAs in Thailand via the moderating influences of professional commitment and audit professionalism are explicitly examined. To distinctively investigate the associations among ethical orientation, professional commitment, ethical reasoning, audit professionalism, and audit effectiveness, the conceptual, linkage, and research model presents the aforementioned relationships, as shown in Figure 1.

[FIGURE 1 OMITTED]

2.1 Ethical Orientation

Ethical orientation is defined as the approach an individual takes to making ethical judgment through ethical perceptions and sensitivity with the …

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Publication information: Article title: Ethical Orientation, Ethical Reasoning, Professional Commitment, Audit Professionalism, and Audit Effectiveness of CPAs in Thailand. Contributors: Ussahawanitchakit, Phapruke - Author. Journal title: Journal of International Business and Economics. Volume: 12. Issue: 1 Publication date: January 2012. Page number: 62+. © 2008 International Academy of Business and Economics. COPYRIGHT 2012 Gale Group.

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