Perceptions of accountants and auditors on professional ethics and professional scepticism in South Africa.

Abstract

Recent accounting scandals in big corporates and, indeed, government entities, have called into question the professional ethics of practicing accountants and auditors. For the auditors specifically, their ability to exercise the appropriate level of professional skepticism has also been an area of concern in South Africa and abroad. This study is informed by these occurrences and the effect this has had on the perceptions of the profession. There is limited existing literature on the perceptions of practicing accountants and auditors on how compatriots are maintaining the required professional ethics during the delivery of their services. The relevance of ethics to accountants and auditors is the professional requirement to frequently exercise ethical judgement. The aim of this research is to investigate and analyse the pressures faced by accountants and auditors in South Africa, to lower their professional ethics and professional scepticism when performing their professional duties. The study explores four research questions, under the themes: “Knowledge of the SAICA Code of Conduct”, “How accountants and auditors maintain the required ethical standards”, “Pressures faced to compromise on ethics”, and “Perceptions about compatriots”. A quantitative approach is adopted for this study, whereby an online questionnaire was completed by a sample of respondents. The population for this study is chartered accountants who are members of the South African Institute of Chartered Accountants (“SAICA”). This group of professionals includes both practicing accountants and auditors – as the prerequisite to practice as an auditor in South Africa is registration with SAICA. The Statistical Package for the Social Science (“SPSS”) application was used to upload the data and analyse it into descriptive and inferential statistics. The data was organized into logical summaries - from which the researcher computed mean and modes. The findings firstly confirm that accounting and auditing professionals do have knowledge of the requisite behaviour and view themselves as being compliant. Secondly, the findings confirm the existence of pressures on accountants and auditors to lax their professional ethics and professional skepticism during the provision of their services. Finally, the results of the study provide evidence that accountants and auditors have a perception that fellow members of the profession do comply with the requisite professional ethics and professional skepticism. These findings should be useful to regulators, government and executive leadership of accounting and auditing firms in that they have highlighted the existence of pressures to compromise professional ethics and professional skepticism. They have also provided an indication as to some of the areas where accounting and auditing professionals view themselves to be not in compliance with the requirements – such as annual attendance of ethics training.