Auditors' Predisposition to Provide Fair Judgments: Australian Evidence of Auditors' Level of Moral Reasoning

Abstract

Auditors have a responsibility to provide fair and independent opinions about managemenfs preparation of company financial statements. This study examines auditors' predisposition to provide just and fair judgments, using Kohlberg's theory of developmental moral reasoning, one of the most widely accepted theories in justice psychology. The results indicate that a majority of auditors have the predisposition to act fairly, particularly when faced with an ethical crisis. A smaller number are likely to act in their own self‐interest and do the right thing only to avoid punishment. These auditors have the ability to “do deals” and, when faced with an ethical crisis, may tend to focus on their own needs at the expense of others.