Within the auditing profession, independence and ethical behavior of the auditors are very much related. The auditors’ conduct could determine whether they are seen or perceived to be independent in their action. This study aims to examine the relationship between auditor’s independence and ethical judgment, in Malaysia context. An experiment with 116 auditors and shareholders is conducted to examine whether changes in auditors’ independence threats will consistently increase the auditors’ ethical judgments level. This study includes four types of independence threats namely self-interest, familiarity, self-review and intimidation threats to observe the effects on auditors’ ethical judgments. The findings revealed there is significant negative relationship between intimidation threat and ethical judgment and insignificant positive relationship between other types of auditors’ independence threats on ethical judgments. This study suggests that auditor likely to diminish their independence if they being threaten with dismissal or replacement of the professional accountant in business or relation to a client engagement.
Tahir et al. (Fri,) studied this question.
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