Business and Professional Ethics Journal

Volume 30, Issue 1/2, 2011

Auditor Professionalism
The Importance of Internalizing Professional Standards and Detection of Severely-Sanctioned Professional Violations

The effectiveness of professional sanctions against violations rests upon the severity of sanctions and detection of violations. Here we examine perceptions of professional violation detection in auditing where the professional standards may conflict with the interests of the auditor’s firm. Using a sample of future and experienced auditors, we test the relationship between professional violations and auditors’ perceptions of the likelihood that severely-sanctioned violations will be discovered (a) by the audit profession, and (b) by the auditor’s firm. In our study, an auditor’s belief that professional bodies are likely to detect professional violations relates positively to auditor professionalism. However, we find beliefs that the audit firm will detect severely-sanctioned professional violations negatively affect auditor professionalism. In our study, the lowest level of professionalism occurs when auditors believe that their own audit firm, but not the audit profession, will detect a professional violation. We also find that auditors’ internalization of professional standards relates positively to auditor professionalism. Implications for future research and practice are discussed.