This study aims to examine the ethical decision-making model proposed by Schwartz, where we consider the factors of non-rationality and aspects that affect ethical judgments of auditors to make the decision to blow the whistle. In this paper, we argue that the intention of whistleblowing depends on ethical awareness and ethical judgment as well as there is a mediation–moderation due to emotion and perceived moral intensity of auditors. Data were collected using an online survey with 162 external auditors who (...) worked on audit firms in Indonesia as well as 173 internal auditors working in the manufacturing and financial services. The result of multigroup analysis shows that emotion can mediate the relationship between EAW and EJW. The nature of this relationship is more complex and then tested by adding moderating variables using consistent partial least squares approach. We found that EMT and PMI can improve the relationship between ethical judgments and whistleblowing intentions. These findings indicate that internal auditors are more likely to blow the whistle than external auditors; and reporting wrongdoing internally and anonymously are the preferred way of professional accountants to blow the whistle in Indonesia. (shrink)

This study aims to examine the ethical decision-making model proposed by Schwartz, where we consider the factors of non-rationality and aspects that affect ethical judgments of auditors to make the decision to blow the whistle. In this paper, we argue that the intention of whistleblowing depends on ethical awareness and ethical judgment as well as there is a mediation–moderation due to emotion and perceived moral intensity of auditors. Data were collected using an online survey with 162 external auditors who (...) worked on audit firms in Indonesia as well as 173 internal auditors working in the manufacturing and financial services. The result of multigroup analysis shows that emotion can mediate the relationship between EAW and EJW. The nature of this relationship is more complex and then tested by adding moderating variables using consistent partial least squares approach. We found that EMT and PMI can improve the relationship between ethical judgments and whistleblowing intentions. These findings indicate that internal auditors are more likely to blow the whistle than external auditors; and reporting wrongdoing internally and anonymously are the preferred way of professional accountants to blow the whistle in Indonesia. (shrink)

We assert that audit quality can be improved to the extent that social norms for honesty and responsibility are activated in the auditor. To test this assertion, we use an experimental audit market setting found in the literature and manipulate factors expected to activate honesty and responsibility norms in the auditor. We find that auditor misreporting is reduced when the investor is another participant in the experiment rather than computer simulated, and thus, the interests of third-party investors are (...) salient to the auditor. We also find that auditor misreporting is reduced when the auditor is required to sign-off on the audit report, but only when the investor is another participant in the experiment. Consistent with our underlying theory, we find that pre-experimental measures of sensitivity to honesty and responsibility norms help explain the effects of our manipulated variables. Finally, we find that these measures of social norm sensitivity are associated with the moral judgment that auditor misreporting is unethical. Our study helps explain previous anomalous findings in the literature and answers the call in Blay et al. (J Bus Ethics 2017. doi:10.1007/s10551-016-3286-4) for empirical researchers to use social norm theory to develop stronger tests of moral reasoning in the market for auditing services. (shrink)

We assert that audit quality can be improved to the extent that social norms for honesty and responsibility are activated in the auditor. To test this assertion, we use an experimental audit market setting found in the literature and manipulate factors expected to activate honesty and responsibility norms in the auditor. We find that auditor misreporting is reduced when the investor is another participant in the experiment rather than computer simulated, and thus, the interests of third-party investors are (...) salient to the auditor. We also find that auditor misreporting is reduced when the auditor is required to sign-off on the audit report, but only when the investor is another participant in the experiment. Consistent with our underlying theory, we find that pre-experimental measures of sensitivity to honesty and responsibility norms help explain the effects of our manipulated variables. Finally, we find that these measures of social norm sensitivity are associated with the moral judgment that auditor misreporting is unethical. Our study helps explain previous anomalous findings in the literature and answers the call in Blay et al. for empirical researchers to use social norm theory to develop stronger tests of moral reasoning in the market for auditing services. (shrink)

Randomization procedures are used in legal and statistical applications, aiming to shield important decisions from spurious influences. This article gives an intuitive introduction to randomization and examines some intended consequences of its use related to truthful statistical inference and fair legal judgment. This article also presents an open-code Java implementation for a cryptographically secure, statistically reliable, transparent, traceable, and fully auditable randomization tool.

Accounting firms are reporting the use of Artificial Intelligence in their auditing and advisory functions, citing benefits such as time savings, faster data analysis, increased levels of accuracy, more in-depth insight into business processes, and enhanced client service. AI, an emerging technology that aims to mimic the cognitive skills and judgment of humans, promises competitive advantages to the adopter. As a result, all the Big 4 firms are reporting its use and their plans to continue with this innovation in (...) areas such as audit planning risk assessments, tests of transactions, analytics, and the preparation of audit work-papers, among other uses. As the uses and benefits of AI continue to emerge within the auditing profession, there is a gradual awakening to the fact that unintended consequences may also arise. Thus, we heed to the call of numerous researchers to not only explore the benefits of AI but also investigate the ethical implications of the use of this emerging technology. By combining two futuristic ethical frameworks, we forecast the ethical implications of the use of AI in auditing, given its inherent features, nature, and intended functions. We provide a conceptual analysis of the practical ethical and social issues surrounding AI, using past studies as well as our inferences based on the reported use of the technology by auditing firms. Beyond the exploration of these issues, we also discuss the responsibility for the policy and governance of emerging technology. (shrink)

We extend the literature by providing evidence that a cultural variable, intrinsic Islamic religiosity is important in understanding auditors’ judgement in the Islamic context of Pakistan. The intrinsic Islamic religiosity theoretical construct examined is Islamic Worldview which represents deeply held enduring and stable values which are likely to be dominant in influencing professionals’ judgements. Moreover, theoretical underpinning and empirical evidence in social psychology and organisational behaviour have established the critical role of intrinsic religiosity in influencing behaviour. Our first objective is (...) to examine whether IW impacts auditors’ judgements in the context of their acceptance of uncorroborated low-reliability client-provided evidence. Understanding the potential impact of cultural factors on auditors’ acceptance of client-provided information is an essential factor in improving audit quality. Our findings support the hypothesis that auditors with high IW scores are more likely to accept uncorroborated low-reliability client-provided evidence. Our second objective is to examine the relationship between IW and auditors’ preference for exercising more or less judgements. Examining this topic is important because auditing is a judgement-based process: auditors’ judgements determine audit quality and, by extension, the quality of associated financial reports. Our findings provide overall support for the hypothesis that auditors with high IW scores have a preference for exercising more judgement. Our findings have implications for global and national standard setters, regulators, practitioners, and researchers. The results are also relevant to global audit firms and their affiliates, particularly networks operating in Islamic countries, in ensuring global consistency of audits. (shrink)

Ethical considerations in today’s businesses are manifold and range from human rights issues and the well-being of employees to income inequality and environmental sustainability. Regardless of the specific topic being investigated, an integral part of business ethics research consists of deeply comprehending the personal meanings, intentions, behaviors, judgements, and attitudes that people possess. To this end, researchers are often encouraged to use more qualitative methods to understand the dynamic and fuzzy field of business ethics, which involves collecting in-depth information in (...) real time. Qualitative methods in business ethics research, however, raise the two-fold responsibility of not only conducting such investigations fairly and appropriately, but also clearly communicating the research processes and outcomes to readers. Especially leading journals in the field such as Journal of Business Ethics have a responsibility to conduct their business ethically, by making sure that their content represents clear and honest communications of research concerning a wide range of business systems. Unfortunately, the question of how to effectively facilitate transparent insight into the research process of qualitative business ethics studies is still unresolved. Both the lack of a clear communication of methods and results and the iterative nature of qualitative methods often make it difficult for the readers to properly assess a qualitative business ethics study and understand its results. We propose the use of narratives to remedy this situation. Specifically, we suggest a new classification of audits, named second-party audits, to facilitate a better understanding of research procedures ex-post for the readers. To illustrate this new narrative-based reconceptualization of audits, we use Agatha Christie’s detective novel The Murder on the Links as a frame of reference. (shrink)

The European Commission has suggested that the use of joint audits should lead to improved auditor skepticism and—by extension—audit quality, through increased accountability. However, archival research does not find support for improved audit quality in a joint audit setting. To better understand the relationship between accountability in different review regimes and auditors’ judgments, we examine the behavioral effect of implementing a joint audit relative to other review regimes based on a 1 × 3 experimental design. Forty-seven (...) senior auditors and partners from a Big Four firm performed a going concern evaluation task under one of three review regimes: the joint audit, the internal review, and the no review regime. Notwithstanding the difference in the audiences to which auditors are accountable, there is no difference in the judgment process. In terms of their judgment outcome, however, auditors in the joint audit setting were the least skeptical in their judgment of the going concern assumption. Overall, we suggest that the joint audit may lead to unintended behavioral consequences. (shrink)

This paper reports on a survey of auditors in New Zealand which investigates the nature of the moral judgements they make on a series of problems with ethical dimensions. The framework adopted for this purpose is developed from earlier work which identifies a range of ethical principles which may be involved in business ethical decision‐making. Auditors responded to a questionnaire which posed, firstly, several questions about the context of their ethical decision‐making, and secondly, a series of vignettes elaborating problematical dilemmas (...) which required the selection of one of four possible responses. Data was analysed to determine whether or not it confirmed previous findings in suggesting a predominant ethical orientation for auditors. The results were correlated with demographic variables in order to determine whether or not age, gender, position in firm and size of employee firm were significantly correlated to ethical response. The survey results, on the whole, confirmed the ethical orientation suggested by previous findings, but there were some unexpected results in three out of the ten vignettes examined. Although some correlations were found between the demographic variables and subject responses, the evidence of this survey does not strongly suggest a consistent significant correlation. (shrink)

This paper reports on a survey of auditors in New Zealand which investigates the nature of the moral judgements they make on a series of problems with ethical dimensions. The framework adopted for this purpose is developed from earlier work which identifies a range of ethical principles which may be involved in business ethical decision‐making. Auditors responded to a questionnaire which posed, firstly, several questions about the context of their ethical decision‐making, and secondly, a series of vignettes elaborating problematical dilemmas (...) which required the selection of one of four possible responses. Data was analysed to determine whether or not it confirmed previous findings in suggesting a predominant ethical orientation for auditors. The results were correlated with demographic variables in order to determine whether or not age, gender, position in firm and size of employee firm were significantly correlated to ethical response. The survey results, on the whole, confirmed the ethical orientation suggested by previous findings, but there were some unexpected results in three out of the ten vignettes examined. Although some correlations were found between the demographic variables and subject responses, the evidence of this survey does not strongly suggest a consistent significant correlation. (shrink)

This study examines a sample of three editions of 19 financial accounting and auditing textbooks (n = 57) to explore the state of accounting educational content through the coverage of five key topics (ethics, professional judgment, governance, corporate social responsibility, and fraud) and 16 accounting scandals/troubled corporations. The study method is descriptive and uses independent sample t tests to identify significant differences over time and between countries. The major findings are fourfold. First, some topics' coverage and/or scandals exist in (...) most of the sample's books based on their indexes. However, the page coverage for these topics/scandals is not overwhelming when compared to the number of pages in these texts. Second, the scandals/troubled corporations' page coverage increased between the earliest and the later editions as did a depth of coverage trend measure. Third, U.S. texts in the sample contained significantly more pages devoted to these topics and scandals than the non-adapted Canadian sample texts. Finally, and as expected, the sampled auditing texts contain significantly more pages devoted to these topics and scandals compared to the other financial accounting texts in the sample. Educators and textbook authors interested in the future of business and accounting education will find this study of interest. If reminding accounting students of the ethical dilemmas they will face in their future careers is important, then this study indicates places where coverage in this sample of texts may be enhanced either through the use of standalone supplementary ethics texts or instructor introduced sources. (shrink)

This study examines the impact of the strength of an accounting firm’s ethical environment (presence and reinforcement vis-à-vis the presence of a code of conduct) on the quality of auditor judgment, across different levels of audit expertise. Using a 2 × 2 full factorial ‹between subjects’ experimental design, with audit managers and audit seniors, the impact of different levels of strength of the ethical environment on auditor judgments was assessed with a realistic audit scenario, requiring (...) participants to make judgments in respect of an inventory writedown. Based on prior research, and as hypothesized, participants possessing greater auditing experience made higher quality technical judgments. While there were no significant differences between the quality of audit judgments made by participants in the stronger ethical environment, over-all results indicate that managers are more sensitive to differences in the strength of the ethical environment than seniors. This is consistent with the hypothesis, and with prior research which suggests that the impact of the code will only be significant if it has been bilaterally internalized by individuals. This has important implications for accounting firms and regulators, given that the International Standard on Quality Control 1, requires the communication and reinforcement of ethical principles as part of firms' quality control processes. It suggests that firms will need to carefully consider the means by which they communicate and reinforce ethical principles, as it is possible to differentially impact auditors of different rank. (shrink)

The community has legislatively conferred on external auditors a special but lucrative responsibility to provide fair and independent opinions about management''s preparation of company financial statements. In return, auditors are obliged by professional standards to act with integrity, independently and in the public interest. This study examined 174 auditors'' predisposition to provide just and fair judgements, using Kohlberg''s theory of developmental moral reasoning, one of the most widely accepted theories in justice psychology. Respondents came from five international audit firms (...) in Copenhagen. Results indicated that auditors with pre-conventional or low level of just reasoning or comprised 64 respondents, the largest group in the sample. The pre-conventional level suggests that people will act in their own self-interest and do the right only to avoid punishment. Pre-conventional auditors have the ability to "do deals", advantageous for business. When faced with an ethical crisis, however, auditors as this level will tend to focus on their own needs at the expense of others. The post-conventional or mid level of just reasoning comprised 59 auditors, second largest group in the sample. This level indicates that these auditors have the predisposition to act fairly on principal, particularly when faced with an ethical crisis. The conventional level or mid-just reasoning consisted of 51 auditors. People with a conventional level of just reasoning believe in law and order, the maintenance of the status quo, however they tend not to be critical of laws, nor authority even if those laws and authority are unjust or evil. (shrink)

We examined whether auditors' attitude to the evidence may be driven by their perception of the self-fulfilling prophecy effect. Following previous research on motivated reasoning, we assumed that the self-fulfilling prophecy effect could be interpreted as a potential motivational/incentive factor supporting auditor's reluctance to release going concern opinions. We contribute to the literature by demonstrating in a laboratory experiment that auditors' perceptions of the self-fulfilling prophecy effect can bias their professional judgment. To this extend, the Hogarth and Einhorn's belief-adjustment (...) model was employed in order to estimate auditors' attitudes in regards to both aggravating and mitigating evidence. Our results indicate that the fear of provoking the self-fulfilling prophecy creates a directional goal which leads auditors to process the audit evidence in a manner more likely to yield the desired conclusion. Auditors' motivated by the fear of causing the self-fulfilling prophecy effect offered a greater sensitivity to the positive evidence and, at the same time, a lower tendency to favor negative evidence. We also provide a discussion of the implications of our results for both regulators and the auditing profession. (shrink)

This paper discusses the relevancy of a contingent factors model posited by Jones for conducting accounting ethics research. Using a sample of 37 experienced Australian auditing managers and partners of all of the ‘Big Four’ multinational accounting firms, we find that the contextual model developed by Jones can help guide accounting ethics research by isolating the contingent factors that affect ethical decision making. Moreover, we examine how the factors differ across different accounting settings. Implications for accounting ethics research and accounting (...) practice are then discussed. (shrink)

Ethics has been identified as an important factor that potentially affects auditors’ professional skepticism. For example, prior research finds that auditors who are more concerned with professional ethics exhibit greater professional skepticism. Further, the literature suggests that professional skepticism may lead the auditor to more vigilantly resist the client’s position in financial reporting disputes. These reporting disputes are generally resolved through negotiations between the auditor and client to arrive at the final reported amounts. To date, the role that professional skepticism (...) potentially plays in the negotiation process has been relatively unexplored. The literature prior to the enactment of Sarbanes–Oxley (SOX) suggests that auditors are more likely to approve a client position when the matter in dispute is relatively ambiguous and when changing the client’s position will result in the client failing to meet analysts’ expectations. However, changes resulting from SOX have led auditors to be more vigilant and therefore results found in the pre-SOX environment may not hold in the current environment where auditors are held more accountable for their actions. Results from an experiment with experienced audit managers and partners suggest that in the post-SOX climate, auditors’ negotiations do not appear to be substantively influenced by management being able to meet or beat forecasts. Moreover, we find that when auditors exhibit heightened professional skepticism, they are more ethical by being conservative and they stand more resolute than when auditors do not exhibit heightened professional skepticism. Finally, although we do not find a main effect for the influence of earnings forecast, we do find a significant interaction between earnings forecast and heightened professional skepticism. Implications for practice and research are then presented. (shrink)

The audit profession’s technical and ethical standards require the application of professional skepticism throughout the financial statement audit process, as auditor skepticism is essential for detecting financial statement fraud and protecting the investing public. However, recent research suggests that audit supervisors often punish staff for exercising skepticism, presenting auditors with an ethical conflict between acting in their own self-interest and acting in a way that improves audit quality and protects the public. This research also suggests that (...) supervisors who reward appropriate skeptical behavior, regardless of the outcome, appear to develop staff that are more likely to detect and convey fraud red flags to their superiors. Building on this research, we use a case-based survey to identify the characteristics of audit supervisors (audit seniors and managers) who are more likely to reward appropriate skepticism, even if it ultimately does not identify a misstatement. We find that trait skepticism, especially suspending one’s judgment, positively drives the evaluations of professional skepticism in our setting. Also, we observe that when supervisors believe that their own audit partner will view the skepticism favorably, they “pay it forward” by rewarding their own staff who engage in skepticism. Our findings identify the characteristics that audit firms may want to develop and foster in auditors rising to supervisory levels. (shrink)

Management has the opportunity to promote self-serving accounting practices, such as earnings management, when management can effectively avoid oversight by the audit committee. This article investigates the effects of financial knowledge and dispositional trust on the ability of audit committee members to recognize management attempts to avoid full disclosure to the board and potentially deceive board members. The results of a controlled laboratory experiment with 40 experienced audit committee member participants indicate that: (1) Audit committee members (...) with less financial knowledge are more likely to accept insufficient client explanations for accounting judgments than are more knowledgeable audit committee members; (2) Audit committee members with less financial knowledge are more likely to reject sufficient client explanations for accounting judgments than are more knowledgeable audit committee members; and (3) Audit committee members that place higher levels of trust in others are more likely to accept insufficient client explanations for accounting judgments than are less trusting committee members. (shrink)

Management Ethics: Integrity at Work redefines what it means for a manager to function with integrity in the private and public sectorsùdomestically and globally. It integrates the latest theoretical work in both descriptive and normative ethics, and incorporates legal, communication, quality, and organizational theories into a conceptual framework that improves managerial judgment in the handling of moral complexity at work. The authors use their organizational ethics consulting and academic research experience to provide practical assessment and decision-making tools that convert (...) ethics theories into sound action steps. The book examines three key dimensions of management integrityùjudgment, process, and developmental dimensionsùand applies them to individual chapters devoted to the subprocesses of ethical planning, organizing, leading, and controlling. The authors focus their theories and tools on 28 ethics minicases related to each management function in seven allied management application clusters: accounting, auditing management; finance, investment management; marketing, advertising management; business management, business law, human resource management; technology, quality operations, organizational behavior management; public, nonprofit, health care management; and international, environmental, public policy management. Management Ethics: Integrity at Work builds management integrity by linking and enhancing both ethics and management competence in responsible planning, organizing, leading, and controlling for use by professionals and students in the private and public sectorsùdomestically and globally. (shrink)

We address a previous finding in the business ethics literature in which accounting professionals in higher rank levels, i.e., “manager” or “partner” of auditing firms, appear to have lower moral reasoning ability than their junior counterparts. Prior investigations have relied upon a similar methodology for estimating ethical beliefs, namely testing “moral reasoning ability” using either the Moral Judgment Interview or Defining Issues Test. In the present study, we use a multiple vignettes approach to test for the existence of the (...) inverse rank-ethical beliefs effect. With only 2 of the 30 vignettes resulting in both managers and partners being more accepting of the ethically charged behaviors, the results presented here using this alternative methodology are generally not supportive of the inverse rank-ethical beliefs phenomenon. We also use a multivariate analysis in order to control for demographic characteristics. Our results suggest that the most robust predictor of ethical attitudes among accounting practitioners is age, not rank within a firm. (shrink)

This study examines the impact of the strength of an accounting firm's ethical environment on the quality of auditor judgment, across different levels of audit expertise. Using a 2 × 2 full factorial 'between subjects' experimental design, with audit managers and audit seniors, the impact of different levels of strength of the ethical environment on auditor judgments was assessed with a realistic audit scenario, requiring participants to make judgments in respect of an inventory writedown. Based (...) on prior research, and as hypothesized, participants possessing greater auditing experience made higher quality technical judgments. While there were no significant differences between the quality of audit judgments made by participants in the stronger ethical environment, over-all results indicate that managers are more sensitive to differences in the strength of the ethical environment than seniors. This is consistent with the hypothesis, and with prior research which suggests that the impact of the code will only be significant if it has been bilaterally internalized by individuals. This has important implications for accounting firms and regulators, given that the International Standard on Quality Control 1, requires the communication and reinforcement of ethical principles as part of firms' quality control processes. It suggests that firms will need to carefully consider the means by which they communicate and reinforce ethical principles, as it is possible to differentially impact auditors of different rank. (shrink)

In Singh v. Blue Cross/Blue Shield of Massachusetts, Inc., the U.S. Court of Appeals for the First Circuit held that defendant Blue Cross/Blue Shield's peer review practices satisfied the immunity standard for professional review actions according to the Health Care Quality Improvement Act, and the First Circuit affirmed the U.S. District Court for the District of Massachusetts's grant of summary judgment in favor of the defendant.After Blue Cross/Blue Shield merged with Bay State Health Care, Blue Cross began to offer (...) “Bay State Health Care” to former Bay State subscribers. Blue Cross denied the plaintiff, Dr. Kunwar Singh, participation in the Bay State Healthcare Network due to poor utilization review. Singh sought reconsideration, and Blue Cross agreed to audit his practices before making a final decision. (shrink)

Using professional accountants as respondents in Hong Kong, this study strives to develop a model to depict the effect of ethical reasoning on the relationships between guanxi and auditors; behaviour in an audit conflict situation. The results of the study found that (1) there is a significant relationship between an auditor's ethical judgement and one's moral cognitive development; (2) there is a relationship between an auditor's ethical judgement and the existence of guanxi; and (3) the impact of guanxi on (...) an auditor's judgement is depending on the level of ethical reasoning. (shrink)

With the rapid development of the Internet and smart phone technology, a large number of short videos are shared through social platforms. Therefore, video content analysis is a very important and popular work in machine learning and artificial intelligence currently. However, it is very difficult to analyze all aspects of video content originally produced by large-scale users. How to screen out bad and illegal content from short videos published by a large number of users, select high-quality videos to share with (...) other users, and improve the quality of video on the distribution platform of the entire user is a top priority. Based on this background, this paper focuses on optimizing video auditing to provide basic features for algorithm judgment, supporting original content and increasing the distribution of new content, and strengthening manual intervention combining algorithm recommendation with manual recommendation. Four major aspects of the artificial training algorithm model discuss the optimization effect of artificial intelligence on the algorithm in order to provide some guidance for the sustainable and healthy development of mobile short video. (shrink)

The frequency of earnings restatements has been increasing over the last decade. Restating previous earnings erodes perceived trustworthiness and competence of management, giving firms strong incentives to take actions to enhance perceived credibility of future financial reports [Farber, D. B.: 2005, The Accounting Review 80(2), 539–561.]. Using an experimental case, we examine the ability of post-restatement actions taken by a firm to positively influence non-professional investors’ perceptions of management’s financial reporting credibility. Our examination considers credibility judgments following two types of (...) restatements – those resulting from fraud in which the character, ethics, and values of an organization may be called into question [cf. Copeland, Jr., J. E.: 2005, Accounting Horizons 19(1), 35–43.], and those resulting from non-fraud (i.e., aggressive accounting). Based on the information in the experimental case, non-professional investors take the role of potential equity investors and make a judgment about management’s financial reporting credibility after reviewing a set of post-restatement actions taken by a firm. The possible actions include changes in four corporate governance mechanisms (i.e., internal audit function, external audit firm, board of directors, CFO) and a buyback of company stock. Our results provide an important contribution to the literature by demonstrating that among non-professional investors, perceptions of management’s financial reporting credibility are affected both by the post-restatement action taken and the nature of the restatement. These results offer insight into the formation of a key credibility judgment made by non-professional investors following a trust-destroying event, an earnings restatement. (shrink)

Auditors’ virtue comprises those qualities of character that manifest the ideals of the audit community (c.f., Maclntyre, 1984, After Virtue. (University of Notre Dame Press, Notre Dame)), and are instrumental in ensuring that auditors’ professional judgment is exercised according to a high moral standard (Thorne, 1998, Research on Accounting Ethics. (JAI Press, Greenwich, CT)). Nevertheless, the lack of valid and reliable quantitative measures of auditors’ virtue impedes research that furthers our understanding of how best to promote virtue in (...) the audit community. To address this gap, we develop two measures of auditors’ virtue. We report the results of the validity and reliability of the scales. In addition, we use the findings from the administration of these scales to professional accountants to refine and validate the theoretical characterization of virtues developed by Pincoffs (1986, Quandaries and Virtues. University Press of Kansas, Lawrence, KS) and Libby and Thorne (2004, Business Ethics Quarterly). In so doing, this study provides a foundation by which future audit research can study ways to ensure that auditors’ virtue is promoted throughout the audit community. (shrink)

Auditors' virtue comprises those qualities of character that manifest the ideals of the audit community ), and are instrumental in ensuring that auditors' professional judgment is exercised according to a high moral standard ). Nevertheless, the lack of valid and reliable quantitative measures of auditors' virtue impedes research that furthers our understanding of how best to promote virtue in the audit community. To address this gap, we develop two measures of auditors' virtue. We report the results of (...) the validity and reliability of the scales. In addition, we use the findings from the administration of these scales to professional accountants to refine and validate the theoretical characterization of virtues developed by Pincoffs and Libby and Thorne. In so doing, this study provides a foundation by which future audit research can study ways to ensure that auditors' virtue is promoted throughout the audit community. (shrink)

In Sweden, and most Western countries, pervasive neoliberal policies have dramatically transformed the entire education sector in a matter of decades. As teacher educators, we have experienced how neoliberal currents have pushed Swedish teacher education towards a teacher training paradigm which may risk undermining the foundations for professional judgement. Moreover, the Bologna Process and the introduction of New Public Management have had significant consequences for what it means to be a teacher educator. In this study, we present our everyday experiences (...) of being teacher educators, immersed in a teacher education culture in Sweden which has evolved under the pressures of neoliberalism. To address these complex lived experiences we engaged in a phenomenological first-person account. Three main themes emerged from an analysis of lived experience descriptions: Alignment Slaves; Audit Puppets; Techno Phobes. These themes reflect different lived dimensions of being teacher educators confronted with neoliberal agendas. The paper concludes with a call for resistance to bring about change within teacher education. (shrink)

ABSTRACT Tetlock's Expert Political Judgment is a creative, careful, and mostly convincing study of the predictive accuracy of political experts. My only major complaints are that Tetlock (1) understates the predictive accuracy of experts, and (2) does too little to discourage demagogues from misinterpreting his work as a vindication of the wisdom of the average citizen. Experts have much to learn from Tetlock's epistemological audit, but there is still ample evidence that, compared to laymen, experts are very good.

With the introduction of general management and then of planned markets into the National Health Service (NHS), health care in the UK has gone through a massive amount of change. The effect on those working for the NHS has been ‘challenging’ and often confusing. This paper aims to clarify what is happening by taking an ideological perspective: what ideologies exist, how they are changing and the strategies being used to ensure their survival. Ideologies are basically about power. The relationship between (...) market, managerial and professional ideologies is analysed using charters, codes of conduct and other associated documents. A tentative conclusion is reached that professional ideologies are able to adjust to the overriding market/consumerist ideology. However, the managerial ideology is having difficulty in gaining any real ground against the professional ideology and is having to move strategically by using audit, not just of finance, but also of clinical judgement, to gain power. (shrink)

As a public director of a NASDAQ stock exchange listed public corporation, I have seen how quickly the reforms in corporate governance imposed by the Sarbanes-Oxley Act have changed procedures and policies in public corporations. In areas such as transparency of financial records and other financial matters including compensation of top executives and conflict of interest policies affecting both corporate boards of directors and employees of the corporation the reforms of this new federal law have quickly changed corporate practices in (...) many corporations. Many persons who have studied this new law believe that these changes will benefit the public, shareholders, employees, and other stakeholders in the modern corporation by increasing the reputation of these organizations for integrity and transparency. Stock exchanges such as NASDAQ and the New York Stock Exchange now require all listed companies to have (after a transition time) a majority of independent directors on their boards of directors. Only independent directors may serve on the audit, nominating and compensation committees of boards in most cases. Some exceptions are made to these rules for foreign and domestic issues of companies where a majority of the voting power is held by one person. According to Morrison & Foster LLP, Corporate Board Advisory March , 2004, NASDAQ requires that the board of directors of a listed company determine that an independent director does not have a relationship that would “interfere with the exercise of independent judgment” in carrying out the responsibilities of a director. (shrink)

In Singh v. Blue Cross/Blue Shield of Massachusetts, Inc., the U.S. Court of Appeals for the First Circuit held that defendant Blue Cross/Blue Shield's peer review practices satisfied the immunity standard for professional review actions according to the Health Care Quality Improvement Act, and the First Circuit affirmed the U.S. District Court for the District of Massachusetts's grant of summary judgment in favor of the defendant.After Blue Cross/Blue Shield merged with Bay State Health Care, Blue Cross began to offer (...) “Bay State Health Care” to former Bay State subscribers. Blue Cross denied the plaintiff, Dr. Kunwar Singh, participation in the Bay State Healthcare Network due to poor utilization review. Singh sought reconsideration, and Blue Cross agreed to audit his practices before making a final decision. (shrink)

Religious experiences come in a variety of types, leading to multiple taxonomies. One sort that has not received much attention as a distinct topic is what I will call ‘evidentially compelling religious experience’ (ECRE). The nature of an ECRE is such that if it actually occurs, its occurrence plausibly entails the falsity of metaphysical naturalism. Examples of ECREs might include visions / auditions / near-death experiences conveying information the hearer could not have known through natural means, later verified; unambiguously miraculous (...) healings; fulfilled prophecy; supernatural rescues; inter-subjective religious experiences (e.g., multiple people simultaneously having the same vision of the Virgin Mary), etc. After presenting a representative set of published case studies of ECREs, I argue that for most settled metaphysical naturalists (though not all), the combination of a settled metaphysical naturalism with an awareness of the relative commonality of testimony to ECREs is either irrational or immoral. This is because that conjunction entails either an unjust and uncharitable judgement on a great many of those testifying to ECREs (namely that they are liars), or an irrational refusal to acknowledge this entailment. (shrink)

The U.S. Foreign Corrupt Practices Act has gained significant popularity in recent years across borders due to the increased investigation and penalties under the law. The following case is a real-life case that highlights the main provisions of the FCPA. Using cases in teaching an auditing or ethics course is much needed to develop students’ professional judgment, critical and analytical thinking skills and communication skills. Presently, there are a few cases that address the Foreign Corrupt Practices Act and its (...) effect on financial reporting and auditor responsibilities about illegal acts. The Armor Holdings case is interesting and information is publicly available regarding the circumstances that describe the bribery act, lack of whistle-blower protection, the tone at the top, and the accounting treatment. In addition, the increase in actions brought by the Securities and Exchange Commission under the FCPA since 2010 heightens the relevance of this case and underscores the need for students to learn the skills necessary to ensure compliance with FCPA and related key regulations such as the Sarbanes Oxley and the Dodd Frank Act. Therefore, cases like this one provide a rich tool to navigate topics and enforce students’ learning of client’s illegal actions and their consequences. These skills are invaluable in practice. (shrink)

Psychophysical scaling models of the form R = f, with R the response and I some intensity of an attribute, all assume that people judge the amounts of an attribute. With simple biases excepted, most also assume that judgments are independent of space, time, and features of the situation other than the one being judged. Many data support these ideas: Magnitude estimations of brightness increase with luminance. Nevertheless, I argue that the general model is wrong. The stabilized retinal image literature (...) shows that nothing is seen if light does not change over time. The classification literature shows that dimensions often combine to produce emergent properties that cannot be described by the elements in the stimulus. These and other effects cannot be adjusted for by simply adding variables to the general model because some factors do not combine linearly. The proposed alternative is that people initially judge the entire stimulus – the object in terms of its environment. This agrees with the constancy literature that shows that objects and their attributes are identified through their relations to other aspects of the scene. That the environment determines judgments is masked in scaling studies where the standard procedure is to hold context constant. In a typical brightness study the essential stimulus might be the intensity of the light or a difference between the light and the background. The two are perfectly confounded. This issue is examined in the case of audition. Judgments of the loudness of a tone depend on how much that tone differs from the previous tone in both pitch and loudness. To judge loudness people first seem to process the stimulus object in terms of differences between it and other aspects in the situation; only then do they assess the feature of interest. Psychophysical judgments will therefore be better interpreted by theories of attention that are based in biology or psychology than those that are based in classical physics. (shrink)

This study examined auditors'' perceptions of the relative level of risk of fraud and material irregularities associated with the presence of six red flag factors and also evaluated the quality of auditors'' judgements. The study was conducted in two stages. In the first stage, subjects were asked to rank the importance of 15 factors that proxy the existence of material misstatements. Based on the responses to this questionnaire, 6 of the most important factors were identified and included in the second (...) stage, a lens model experiment. In the lens model experiment, 30 experienced auditors from a cross-section of Big 6 firms were used as subjects in a repeated-measures ANOVA design. Results showed that misstatements in prior audits and indicators of going-concern problems were perceived to be the most significant factors in alerting auditors to the risk of fraud and material irregularities. In making these judgements, auditors demonstrated a relatively high level of consensus and consistency. However, the two most important factors in the lens model experiment are not the same as the results of the first survey suggesting that the first group of respondents, faced with a simple questionnaire, used heuristics in their decision making. The results have implications for audit practice. (shrink)

As universities in the United Kingdom gear themselves up for the next Research Excellence Framework, REF2021, with peer review at its core, we critically re-visit the idea of peer review as a gold standard proxy for research excellence. We question the premise that anonymous peer review is a necessary and enabling condition for impartial, expert judgement. We argue that the intentions and supposed benefits underlying peer review and its associated concepts have become congealed in received discourse about research quality. Hence (...) we explore the key conceptual issues raised by the nested assumptions and concepts that come into play in peer review as currently practised: primarily those of secrecy, anonymity, legitimacy, trust, impartiality and openness. After delineating the benefits attributed to peer review, we contrast its declared virtues with its problematic features. We locate peer review in an audit culture in which the reviewer is an academic labourer. Drawing on recent trends in moral and political philosophy, we question the usefulness of the ideal of impartiality when tied to secrecy. Then we raise more deliberative, intersubjective possibilities for a revised understanding of peer review in the context of an academic community. Finally, we suggest ways in which the academic community could pursue quality in research by recasting peer review to be less secret and more open. (shrink)

Imagine this scenario: a bank customer walks up to an ATM to withdraw cash from her account. While entering her PIN, she accidentally presses the '3' key at the same time as the 'Clear' key. Instantly $100 comes out of the cash dispenser! Curious, she checks the receipt and seeing that the money did not from her account, she tries the same operation. Again, $100 comes out of the cash dispenser. At this point she has two options, A: she can (...) continue to take advantage of this obvious flaw and tell her friends, or B: she can report this problem to the bank, telling no one else. While Kantian ethics might require the latter, the issue becomes much grayer when it comes to computer software vulnerabilities. Many variables exist to cloud the ethical judgment of a software flaw's discoverer. The question becomes: is it better to report any vulnerability that could cause catastrophic problems or to make the vulnerability information public in order to simultaneously compel the software vendor to address the problem while giving the vendor's customers a chance to prepare for potential exploitation? Software companies are facing this dilemma on a regular basis. There are dozens of websites, newsgroups, and e-mail lists dedicated to the task of sharing vulnerability information, whether condoned by the software company or not. The issue increases in severity as vulnerable software becomes ubiquitous across global networks. The public release of vulnerability information is often the first drop of the monsoon that is the malicious network worm. How this information is controlled and disseminated is critical to the stable operation of millions of computer systems and networks across the globe.Modern software with network capability is fundamentally complex and can span thousands of lines of source code for one small part of the package. Without proper testing and quality assurance, many bugs and errors slip through. Software development requires these iterations of coding and bug fixing to produce stable and polished final products. Larger and more complex software gives a greater chance for a bug to remain undiscovered. Yet, since major vulnerabilities have appeared in relatively smaller projects, proper code audit and testing are critical regardless of the size of a software package or the amount of source code required to produce it. If bugs or security vulnerabilities are not discovered and fixed by the software manufacturers, it is inevitable that they will be discovered by outside researchers.This breeds the ethical conundrum of what the researchers do with the information once it has been discovered. Foundational to disclosure, regardless of the ideology, is the notion of providing useful protective information to the most appropriate audience. Many suggest that disclosure is about doing the 'greatest good' for the greatest number of people, which is an obvious adherence to the ethical principle of Utilitarianism. There are numerous parties involved in the network security process such as software vendor, security researcher, system administrator, and even malicious attacker: all whose intentions reflect on the ethical principles behind their actions. (shrink)

This book constitutes one of the most important contributions to recent Kant scholarship. In it, one of the pre-eminent interpreters of Kant, Henry Allison, offers a comprehensive, systematic, and philosophically astute account of all aspects of Kant's views on aesthetics. The first part of the book analyses Kant's conception of reflective judgment and its connections with both empirical knowledge and judgments of taste. The second and third parts treat two questions that Allison insists must be kept distinct: the normativity (...) of pure judgments of taste, and the moral and systematic significance of taste. The fourth part considers two important topics often neglected in the study of Kant's aesthetics: his conceptions of fine art, and the sublime. (shrink)

Kant announces that the Critique of the Power of Judgment will bring his entire critical enterprise to an end. But it is by no means agreed upon that it in fact does so and, if it does, how. In this book, Ido Geiger argues that a principal concern of the third Critique is completing the account of the transcendental conditions of empirical experience and knowledge. This includes both Kant's analysis of natural beauty and his discussion of teleological judgments of (...) organisms and of nature generally. Geiger's original reading of the third Critique shows that it forms a unified whole - and that it does in fact deliver the final part of Kant's transcendental undertaking. His book will be valuable to all who are interested in Kant's theory of the aesthetic and conceptual purposiveness of nature. (shrink)

This paper argues that an emotion is a state of affectively perceiving its intentional object as falling under a “thick affective concept” A, a concept that combines cognitive and affective aspects in a way that cannot be pulled apart. For example, in a state of pity an object is seen as pitiful, where to see something as pitiful is to be in a state that is both cognitive and affective. One way of expressing an emotion is to assert that the (...) intentional object of the emotion falls under the thick affective concept distinctive of the emotion. I argue that the most basic kind of moral judgment is in this category. It has the form “That is A” (pitiful, contemptible, rude, etc.). Such judgments combine the features of cognitivism and motivational judgment internalism, an advantage that explains why we find moral weakness problematic in spite of its ubiquity. I then outline a process I call “thinning” the judgment, which explains how moral strength, weakness, and apathy arise. I argue that this process is necessary for moral reasoning and communication, in spite of its disadvantage in disengaging the agent's motivating emotion from the judgment. (shrink)

Moving beyond the dialogical approaches found in much of contemporary hermeneutics, this book focuses instead on the diagnostic use of reflective judgment, not only to discern the differentiating features of the phenomena to be understood, but also to the various meaning contexts that can frame their interpretation. It assesses what such thinkers as Kant, Dilthey, Heidegger, Gadamer, Ricoeur, Habermas and others can contribute to the problems of multicultural understanding, and reconceives hermeneutics as a critical inquiry into the appropriate contextual (...) conditions of understanding and interpretation. (shrink)