The Role of Ethical Standards in Shaping Auditor Behavior and Professional Responsibility

Posted: Sep 22, 2023

• Tessa Owens
• Gavin Holmes
• Leah Dean

Abstract

The auditing profession operates within a complex ethical landscape where professional standards intersect with practical decision-making in high-stakes environments. While extensive literature exists on the content and structure of ethical codes governing auditors, significantly less attention has been paid to the mechanisms through which these standards actually influence professional behavior. This research addresses this critical gap by examining the translation of ethical principles into actionable professional conduct across varied organizational contexts. The fundamental research question guiding this investigation concerns how formal ethical standards are internalized, interpreted, and implemented by auditing professionals facing real-world dilemmas that often lack clear-cut solutions. Traditional approaches to auditing ethics have predominantly focused on compliance mechanisms and rule-based frameworks, assuming that clearly articulated standards will naturally lead to appropriate professional behavior. However, recent ethical failures in the auditing domain suggest that this assumption requires critical re-examination. Our study proposes that the relationship between ethical standards and professional behavior is neither linear nor deterministic, but rather mediated by a complex interplay of individual, organizational, and situational factors that have been largely overlooked in conventional ethical training programs. This research makes several distinctive contributions to the field. First, it develops and validates a comprehensive theoretical model that explains the mechanisms through which ethical standards influence auditor decision-making. Second, it employs innovative methodological approaches that capture the dynamic nature of ethical reasoning in authentic professional contexts. Third, it identifies specific leverage points where ethical interventions may yield the greatest impact on professional behavior. Finally, it provides practical recommendations for enhancing ethical education and organizational ethical infrastructure within