Different pathways that suggest whether auditors' going concern opinions are ethically based

Rodgers, Waymond; Guiral, Andrés; Gonzalo, José A.

Abstract

Several critics have reopened the continuing debate regarding the credibility of the auditing profession in part because of auditors' reluctance to issue warning signals to investors. At the root of auditors' lack of independence issues are conflicts of interest resulting from the structural features of auditor-client relationship. The Throughput Model (TP) is advanced to illustrate how ethical issues may be influenced by conflicts of interest. In the first stage, the TP provides an isolation of auditors' ethical positions from six ethical different perspectives. In the second stage, previous TP theory is built upon by arguing a simultaneous analysis of how conflicts of interests may induce auditors' behavior. We conclude that in the current low litigation risk environment, auditors' ethical behavior (both conscious and unconscious) is clearly 'unbalanced' favoring the reluctance to issue warning signals. Finally, we offer a discussion of potential solutions to improve ethical issues. © 2008 Springer Science+Business Media B.V.

Citation

Rodgers, W., Guiral, A., & Gonzalo, J. A. (2009). Different pathways that suggest whether auditors' going concern opinions are ethically based. Journal of Business Ethics, 86(3), 347-361. https://doi.org/10.1007/s10551-008-9851-8

• Journal Article Type: Article
• Online Publication Date: Jul 3, 2008
• Publication Date: 2009-05
• Deposit Date: Nov 13, 2014
• Journal: Journal Of Business Ethics
• Print ISSN: 0167-4544
• Electronic ISSN: 1573-0697
• Publisher: Springer Publishing Company
• Peer Reviewed: Peer Reviewed
• Volume: 86
• Issue: 3
• Pages: 347-361
• DOI: https://doi.org/10.1007/s10551-008-9851-8
• Keywords: Auditing; Conflicts of interest; Decision making; Ethics; Throughput Model; Warning signals
• Public URL: https://hull-repository.worktribe.com/output/473181
• Publisher URL: https://link.springer.com/article/10.1007%2Fs10551-008-9851-8#aboutcontent
• Contract Date: Nov 13, 2014