Ethical issues like those involving Enron, Worldcom and Global Crossing have caused the public’s confidence on auditing profession to decline. Many unethical business practices have alerted us of the deterioration of ethicalness among Malaysians. This study concentrates on auditors who have high responsibility in auditing firm’s financial statements. This study’s main aim is to examine the factors that influence ethical judgement of auditors in Malaysia. It is also determines the level of moral reasoning and ethical judgement of auditors. The independent factors that are examined in this study include perceived ethical climate of the firm, exposure to ethics and moral reasoning. Analyses were run for the usable 81 responses. This research found that the representative samples of auditors in Malaysia have level of moral reasoning and ethical judgement below average. The three independent variables, namely perceived ethical climate of the firm, exposure to ethics and moral reasoning are significantly related to level of ethical judgement of auditors. The joint affect of the three independent variables is also found to have significant relationship with the five dimensions of ethical judgement. The findings of this study will be useful for Malaysian Institute of Accountants (MIA), the government and also audit firm in their efforts to improve on the ethicality of the auditors and thus to ensure sustainability and keep public’s confidence in auditing profession.

Research Team :
•  Hasnah Haron
•  Ishak Ismail
•  Daing Nasir Ibrahim
•  Maisarah Mohamad Saat
•  Ichiro Shiobara