Loyalty or Fairness: A Study of the Influence of Moral Foundations on Auditors' Propensity to Subordinate their Judgment
Description: Subordination of judgment is a fundamental threat to auditor objectivity. Subordination of judgment occurs when auditors agree with their superiors either in spite of or without forming their own independent judgments. Many audit procedures rely on independent, critical thinking at every level of the audit team; however, a number of studies suggest that auditors tend to agree with superiors even when a superior's views clearly run contrary to generally accepted accounting principles. While there is general agreement among scholars that subordination of judgment is "bad," very little attention has been given to moral biases that might influence an auditor's tendency to subordination of judgment, or to potential remedies that could mitigate an auditor's tendency to subordinate judgment. Moral Foundations Theory suggests that individuals tend to make intuitive, normative evaluations of situations based upon a set of personal moral biases or preferences called "moral foundations." Two specific moral foundations could influence subordination of judgment in divergent ways. The moral foundation of loyalty-respect may make agreement with a superior's views seem more acceptable than would disagreement. Meanwhile, the moral foundation of fairness may make an auditor more sensitive to the observance of rules, resulting in less subordination of judgment when a superior's views run contrary to professional rules. Social Identity Theory suggests that in-group favoritism may exacerbate subordination of judgment in general; however, strengthening an auditor's professional identity salience (PIS) could strengthen an auditor's objectivity. PIS is the temporary, heightened awareness of an auditor's identity as a professional and their role as guardian of professional rules. As a result, PIS may interact with an auditor's innate sense of fairness, resulting in less subordination of judgment than when professional identity is less salient. Results supported the hypothesis that auditors tend to subordinate their judgment to that of a superior, but not that PIS ...
Date: December 2016
Creator: Neri, Marc Peter