TY - JOUR
T1 - The impact of codes of ethics and experience on auditor judgments
AU - Pflugrath, Gary
AU - Martinov-Bennie, Nonna
AU - Chen, Liang
PY - 2007
Y1 - 2007
N2 - Purpose - The purpose of this study is to investigate the impact of the presence of a code of ethics on the quality of auditors' judgments, within the context of the new International Standard on Quality Controls 1 (ISQC1). Design/methodology/approach - A sample of 112 professional accountants and auditing students was employed to investigate the effect of the presence of a code of ethics (operationalised as the presence vs absence of an organisational code of conduct) on the quality of audit judgments, pertaining to an inventory writedown, using a 2 × 2 full factorial "between-subjects" experimental design. Findings - The results of this study indicate that the presence of a code of ethics has a positive impact on the quality of the judgments made by professional accountants, but not on students. This suggests that it is the code of ethics, in the context of greater general experience that leads to higher quality of judgments. Practical implications - The results suggest that the requirements of ISQC1 are relevant to the quality control of accounting firms and have potential to positively impact the quality of audit performance. Originality/value - This is the first paper to examine the impact of the presence of a code of ethics within an audit context. It is the first time that the interactive effects of the code of ethics and technical competency, which together form an integral part of standard-setters' quality control standards, upon the quality of auditor judgments has been investigated.
AB - Purpose - The purpose of this study is to investigate the impact of the presence of a code of ethics on the quality of auditors' judgments, within the context of the new International Standard on Quality Controls 1 (ISQC1). Design/methodology/approach - A sample of 112 professional accountants and auditing students was employed to investigate the effect of the presence of a code of ethics (operationalised as the presence vs absence of an organisational code of conduct) on the quality of audit judgments, pertaining to an inventory writedown, using a 2 × 2 full factorial "between-subjects" experimental design. Findings - The results of this study indicate that the presence of a code of ethics has a positive impact on the quality of the judgments made by professional accountants, but not on students. This suggests that it is the code of ethics, in the context of greater general experience that leads to higher quality of judgments. Practical implications - The results suggest that the requirements of ISQC1 are relevant to the quality control of accounting firms and have potential to positively impact the quality of audit performance. Originality/value - This is the first paper to examine the impact of the presence of a code of ethics within an audit context. It is the first time that the interactive effects of the code of ethics and technical competency, which together form an integral part of standard-setters' quality control standards, upon the quality of auditor judgments has been investigated.
UR - http://www.scopus.com/inward/record.url?scp=34347398664&partnerID=8YFLogxK
U2 - 10.1108/02686900710759389
DO - 10.1108/02686900710759389
M3 - Article
AN - SCOPUS:34347398664
SN - 0268-6902
VL - 22
SP - 566
EP - 589
JO - Managerial Auditing Journal
JF - Managerial Auditing Journal
IS - 6
ER -