Title: INTERNAL AUDITOR and ETHICAL DILEMMA: The Importance of Experience, Professional Commitment and Ethical Orientation of Auditors and Organizational Ethical Values
Author: SASONGKO BUDISUSETYO
Affiliations: Master of Accounting Study Program, Faculty of Economics and Business, Universitas Airlangga Surabaya
Publisher: Universitas Airlangga
Abstract
Internal auditors have an important role in an organization related to accounting, management and control functions. The dual role carried out by internal auditors, namely as a professional and as a member of the organization in which he/she is a member, often brings internal auditors into an ethical dilemma.
This research tries to see how the ethical decision making process is carried out by internal auditors. The Person-Situation Interactionist Model developed by Trevino (1998) was adapted to see the relationship between unique individual variables and situational variables related to the ethical decision-making process. Individual variables of internal auditors include ethical orientation, professional commitment and work experience, while situational variables are organizational ethical values. The ethical orientation adopted by internal auditors and its influence on ethical decision making is measured using the Ethical Position Questionnaire vane, developed by Forsyth (1986) by describing two dimensions of ethical orientation, namely idealism and nonrelativism. Organizational ethical values are measured using Corporate Ethical Values developed by Hunt et.al (1989).
This research hypothesis states that internal auditors' ethical decision making will be influenced by ethical orientation, professional commitment, work experience and organizational ethical values. In this research, structural equation modeling (SEM) was used to describe the relationship between each construct in the research.
The results of SEM and path analysis indicate that (1) the ethical decision making process is influenced directly or indirectly by individual factors and situational factors. (2) Three constructs, namely organizational ethical values, ethical orientation and professional commitment, have a significant positive relationship with internal auditors' decisions and directly and indirectly influence internal auditors' ethical decision making (3) In this study, no positive relationship was found between work experience with professional commitment and with the internal auditor's ethical decision-making process. In this research, the proposed model also has a goodness-of-fit index that is not good, so it cannot be used as a model, this may be due to the complexity of the ethical decision making process and may not be fully covered in the theory discussed.
Keywords: Internal auditor, ethics, ethical decision making, corporate ethical value, ethical orientation, professional commitment
Sources: http://repository.unair.ac.id/34230/
