Abstract
The importance of spiritual capital of individuals (SpCis) can be traced back to the resistance of independent auditors in the face of client manager power in ethical dilemma situations. This capital which is defined as a component of intellectual capital is integrated to auditors’ livelihood. This research found some related individual factors in auditing area and classified them under SpCi. Morals, ethics, personal values, and culture are the four most related factors which are applied as dimensions of SpCi in auditing area. Hence, this paper attempts to investigate into the effect of SpCi and its four dimensions on an independent auditor’s opinion. The respondents of this research were 321 Iranian audit managers and partners. The data were collected through questionnaires, and multiple regressions were applied to analyze the data. The results showed that the SpCi and its dimensions affect an independent auditor’s opinion.
Similar content being viewed by others
References
Abdolmohammadi, M. J., & Baker, C. R. (2006). Accountants’ value preferences and moral reasoning. Journal Business and Ethics, 69, 11–26.
Abdullah, D. F., & Sofian, S. (2009). Intellectual capital: it is time Malaysian companies get acquainted. Accountants Professionalism, 22(7), 22–24.
Adjibolosoo, S. (2004). Responding to a plethora of views regarding the human factor theory: a friendly dialogue with colleagues. Review of Human Factor Studies, 10(1), 7–20.
Alimadad, M. (2009). Accountants and ethics. Certified Accountant, 7, 27–37.
Añaña, E. D., & Nique, W. M. (2007). A professional category positioning: The role of personal values and their influence on consumer perceptions. Database Marketing & Customer Strategy Management, 14(4), 289–296.
Arnold, D. F., Bernardi, R. A., Neidermeyer, P. E., & Schmee, J. (2006). The effect of country and culture on perceptions of appropriate ethical actions prescribed by code of conduct: a western European perspective among accountants. Journal of Business and Ethics, 70, 327–340.
Ashkanasy, N. M. (1989). Supervisors’ responses to subordinate performance, unpublished Doctoral dissertation. The University of Queensland, Brisbane.
Ashkanasy, N. M., Windsor, C. A., & Trevino, L. K. (2006). Bad apples in bad barrels revisited: cognitive moral development, just world beliefs, rewards, and ethical decision making. Business Ethical Quarterly, 16(1), 449–473.
Beekun, R. I., Hamdy, R., Westernman, J. W., & Elnaby, H. R. H. (2008). An exploration of ethical decision-making processes in the United States and Egypt. Journal Business and Ethics, 82, 587–605.
Belkaoui, A. R., & Picur, R. D. (1991). Cultural determinism and the perception of accounting concepts. International Journal of Accounting, 26(2), 118–130.
Bonner, S. E. (1990). Experience effects in auditing: the role of task-specific knowledge. The Accounting Review., 65(1), 72–92.
Brown, P. A., Stocks, M. H., & Wilder, W. M. (2007). Ethical exemplification and the AICPA code of professional conduct: an empirical investigation of auditor and public perceptions. Journal of Business Ethics, 71, 39–71.
Buchan, H. F. (2005). Ethical decision making in the public accounting profession: an extension of Ajzen’s theory of planned behavior. Journal of Business Ethics, 61, 165–181.
Campbell, T., & Houghton, K. (2010). Ethics and auditing. The Australian National University: ANU E Press.
Carcello, J. V., Hermanson, D. R., & Raghundan, K. (2005). Changes in internal auditing during the time of the major US accounting scandals. International Journal Auditing, 9(2), 117–127.
Colby, A., Kohlberg, L., Speicher, B., Hewer, A., Candee, D., & Gibbs, J. (Eds.). (2011). The measurement of moral judgment (Vol. 2). Cambridge: Cambridge University Press.
Cowperthwaite, P. (2010). Culture matters: how our culture affects the audit. Accounting Perspectives/ Perspectives Comptables, 9(3), 175–215.
Culpan, R., & Trussel, J. (2005). Applying the agency and stakeholder theories to the Enron debacle: an ethical perspective. Business and Society Review, 110(1), 59–76.
Cushing, B. E. (1990). Discussion of auditor independence judgments: a cognitive development model and empirical evidence. Contemprorary Accounting Research, 20(2), 14–23.
Dent, E., Higgins, M., & Wharf, D. (2005). Spirituality and leadership: an empirical review of definitions, distinctions, and embedded assumptions. The Leadership Quarterly, 16(5), 625–653.
Dewing, L. P., & Russell, P. O. (2004). Accounting, auditing and corporate governance of European listed countries: EU policy developments before and after Enron. Journal of Common Market Studies, 42(2), 289–319.
Eynon, G., Hill, N. T., & Stevens, K. T. (1997). Factors that influence the moral reasoning abilities of accountants: implications for universities and profession. Journal of Business and Ethics, 16, 1297–1309.
Falk, H., Lynn, B., Mastelman, S., & Shehata, M. (1999). Auditor independence, self-interested behavior and ethics: some experimental evidence. Journal of Accounting and Policy, 18, 935–428.
Ferrell, O. C., Gresham, L. G., & Freadrich, J. (1989). A synthesis of ethical decision models for marketing. Journal of Macromarketing, 9, 55–64.
Fisher, D. G., & Sweeney, J. T. (1998). The relationship between political attitudes and moral judgment: examining the validity of the defining issues test. Journal of Business Ethics, 17, 905–916.
Flint, D. (1988). Philosophy and principles of auditing an introduction (p. 191). Basingstoke: Macmillan Education Ltd.
Gilligan, C. (1982). In a different voice: women's conceptions of self and morality. Harvard Educational Review, 47(4), 481–517.
Godsell, D. (1993). Auditors’ legal duties and liabilities in Australia. Melbourne: Longman.
Goldman, A., & Barlev, B. (1974). The auditor-firm conflict of interests: its implications for independence. The Accounting Review., 49(4), 707–718.
Gray, L., & Manson, S. (2005). The audit process,principles, practice and cases. London: International Thomson Business Press.
GUL, F. A. (1991). Size of audit fees and perceptions of auditors’ ability to resist managment pressure in audit conflict situations. Abacus, 27(2), 162–170.
Haniffa, R., & Hudaib, M. (2007). Locating audit expectations gap within a cultural context: the case of Saudi Arabia. International Accounting Auditing & Taxation, 16, 179–206.
Hasasyegane, Y. (2006). Auditing philosophy, scientific and cultural publication. Tehran: Agah.
Hay, D., McCourt, L. P., Peter, O., & Andrew, F. (2001). The ethical perception of undergraduate students in computer-related situations: an analysis of the effects of culture, gender and prior education. Teaching Business Ethics, 5(3), 331–356.
Hofstede, G. H. (1980). Culture’s consequences: international differences in work-related values. Beverly Hills: SAGE.
Hofstede, G. H. (1991). Cultures and organizations: software of the mind. New York: Mc Graw Hill.
Hofstede, G. H. (2001). Culture's consequences: comparing values, behaviors, institutions, and organizations across nations. Thousand Oaks: Sage.
IACPA. (2013). The number of IACPA’s members, from www.iacpa.ir
International Federation of Accountants. (2005). Guidelines on ethics for professional accountants. New York: IFAC.
Ismail, M. B. (2005). The influence of intellectual capital on the performance of Telekom Malaysia, Phd dissertaion. Ph.D. Thesis, University Teknology Malaysia.
Jenning, M. M., Reckers, P. M. J., & Kneer, D. C. (1991). The auditor’s dilemma: the incongruous judicial notions of the auditing profession and actual auditor practice. American Business Law Journal, 29(1), 99–125.
Karacaer, S., Gohar, R., Aygün, M., & Sayin, C. (2009). Effects of personal values on auditor’s ethical decisions: a comparison of Pakistani and Turkish professional auditors. Journal of Business Ethics, 88(1), 53–64.
Khaki, G. (2007). Research methodology. Tehran: Baztab.
Kohlberg, L. (1969). Stage and sequence: the cognitive-developmental approach to socialization. Chicago: Rand Mcnally.
Kohlberg, L. (1976). Moral stages and moralization: the cognitive-developmental approach. In Moral development and behavior: theory, research, and social issues. New York: Holt Rinehart & Winston.
Kohlberg, L., & Lickona, T. (Eds.). (1976). Moral Stages and Moralization: The Cognitive-Developmental Approach. Holt, Rinehart and Winston: Moral Development and Behavior. New York.
Kohlberg, L., Levine, C., & Hewer, G. (1984). Moral stages: a current formulation and a response to critics. New York: Karger.
Lampe, J. C., & Finn, D. W. (1992). A model of auditor’s ethical decision processes. Auditing: a Journal of Practice and Theory, 11(Supplement), 60–66.
Leo, T. W., Ferrell, L., & Mansfield, P. (2000). A review of empirical studies assessing ethical decision-making in business. Journal of Business and Ethics, 25, 185–204.
Mautz, R., & Sharaf, H. (1961). The philosophy of auditing. Sarasota, FL: American Accounting Association.
Middlebrooks, A., & Noghiu, A. (2007). Reconceptualizing spiritual capital: a meso-model for organizational leadership. In S. Singh-Sengupta & D. Fields (Eds.), Integrating spirituality and organizational leadership. India: MacMillan.
Modarres, A., & Rafiee, A. (2011). Influencing factors on the ethical decision making of Iranian accountants. Social Responsiblity Journal, 7(1), 136–144.
Neter, J., Kutner, M. H., & Nachtsheim, C. (2003). Applied linear regression models. Chicago: Irwin.
Pany, K., & Reckers, M. J. (1988). Auditor performance of MAS: a study of it effects on decisions and perceptions. Accounting Horizons, 55, 31–38.
Polley, D., Vora, J., & Subbanarasimha, P. N. (2005). Paying the devil his due: limits and liabilities of workplace spirituality. The International Journal of Organizational Analysis, 13(1), 50–63.
Ponemon, L. A. (1988). A cognitive-developmental approach to the analysis of certified public accountants ethical judgments. Ph.D.Thesis: Union University.
Ponemon, L. A. (1990). Ethical judgments in accounting: a cognitive-developmental perspective. Critical Perspectives on Accounting, 1(2), 191–215.
Ponemon, L. A. (1992). Ethical reasoning and selection-socialization in accounting. Accounting, Organizations and Society, 17(3), 239–258.
Ponemon, L. A. (1995). The objectivity of accountants litigation support judgements. The Accounting Review, 70(3), 467–480.
Ponemon, L. A., & Gabhart, D. (1993). Ethical reasoning in accounting and auditing. Vancouver: CGA Canada Research Foundation.
Ponemon, L. A. and Gabhart, D. R. L. (1994). Ethical reasoning research in the accounting and auditing professions Moral development in the professions: psychology and applied ethics (pp. 233): Taylor & Francis.
Ponemon, L. A., & Glazer, A. (1990). Accounting education and ethical development: the influence of liberal learning on students and alumni in accounting practice. Issues in Accounting Education, 5, 195–208.
Radtke, R. R. (2008). Role morality in the accounting profession-how do we compare to physicians and attorneys? Journal of Business and Ethics, 79, 279–297.
Rest, J. R. (1986). Moral development: advances in research and theory. New York: Praeger.
Rest, J. R., Narvaez, D., Bebeau, M., & Thoma, S. (1999). A neo-Kohlbergian approach: the DIT and schema theory. Educational Psychology Review, 11(4), 291–324.
Rezaee, Z. (2002). Financial statement fraud prevention and detection. New York • Chichester • Weinheim • Brisbane • Singapore • Toronto Wiley
Saat, M. M. (2010). An investigation of the effects of a moral education program on the ethical development of Malaysian future accountants Ph.D., Curtin University of Technology Sydney.
Satava, D., Caldwell, C., & Richards, L. (2006). Ethics and the auditing culture: rethinking the foundation of accounting and auditing. Journal of Business and Ethics, 64, 271–284.
Shafer, W. E., Morris, R. E., & Ketchand, A. A. (2001). Effects of personal values on auditors’ ethical decisions. Accounting, Auditing& Accountability Journal, 14(3), 254–277.
Sweeney, J. T., & Roberts, R. W. (1997). Cognitive moral development and auditor independence. Accounting Organization and Society, 22, 337–352.
Trevino, L. K. (1986). Ethical decision making in organizations: a person-situational interactionist model. Academy of Management Review, 16.
Trevino, L. K., Butterfield, K. D., & McCabe, D. L. (1998). The ethical context in organizations: influences on employee attitudes and behaviors. Business Ethical Quarterly, 8(3), 447–476.
Trevino, L. K., & Youngblood, S. A. (1990). Bad apples in bad barrels: a causal analysis of ethical decision-making behavior. Journal of Applied Psychology, 75(378–385).
Tsui, J. S. L. (1996). Auditors’ ethical reasoning: some audit conflict and cross cultural evidence. The International Journal of Accounting, 31(1), 121–133.
Tsui, J. S. L., & Gul, F. A. (1996). Auditors' behaviour in an audit conflict situation: a research note the role of locus of control and ethical reasoning. Accounting, Organization and Society, 21(1), 41–51.
Valentine, S., & Fleischman, G. (2002). Ethics codes and professionals’ tolerance of societal diversity. Journal of Business Ethics, 40, 301–312.
Warming-Rasmussen, B., & Windsor, C. A. (2003). Danish evidence of auditors’ level of moral reasoning and predisposition to provide fair judgements. Journal Business and Ethics, 47, 77–87.
Wilson, T. E. J., Pinac-Ward, S. and Ward, D. R. (1998). Toward a better understanding of the motivations and ethical attitudes of the profession, in L.A Ponemon (ed). Research on Accounting Ethics, 4(JAI Press, Greenwich, CT), 2101–2210.
Windsor, C. A., & Ashkanasy, N. M. (1995). The effect of client management bargaining power, moral reasoning development, and belief in a just world on auditor independence. Accounting Organization and Society, 20, 701–720.
Windsor, C. A., & Warming-Rasmussen, B. (2009). The rise of regulatory capitalism and the decline of auditor independence: a critical and experimental examination of auditors’ conflicts of interests. Critical Perspectives on Accounting, 20, 267–288.
Author information
Authors and Affiliations
Corresponding author
Rights and permissions
About this article
Cite this article
Naslmosavi, S., Jahanzeb, A. The effect of spiritual capital of individuals on independent auditor’s opinion: evidences from Iranian auditors. Asian J Bus Ethics 6, 131–152 (2017). https://doi.org/10.1007/s13520-016-0069-z
Received:
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s13520-016-0069-z