An exploratory study of the pressures and ethical dilemmas in the audit conflict

Abstract

The present study analyzes the pressures perceived by auditors in their professional activity. Furthermore, it explores the ethical acceptability of questionable practices and the way auditors resolve the conflicts of interest with which they are confronted. This paper also studies the influence of the size of the audit firm and the experience of the auditors on the perception of pressures, their ethical judgment, and the way of resolving conflicts of interest.
Data were collected through a questionnaire administered to auditors from small and medium-sized audit firms in Spain, members of REA (Registro de Economistas Auditores).
This study contributes to the international academic literature on auditing behavior, as it provides new empirical data on the pressures perceived, not only those from the audit client, which have been extensively studied in the academic literature, but in addition, it highlights pressures arising from the audit firm itself that could also have a detrimental effect on the audit quality. It also contributes to the understanding of the effect of these pressures on the behavior of auditors.
The results of this study are also of particular relevance for the legal and professional Spanish auditing regulators as they face, at this moment, the challenge of developing a set of ethical standards that should improve the ethical judgment and behavior of accounting professionals.

Full text

Please
cite
this
article
in
press
as:
Espinosa-Pike,
M.,
&
Barrainkua,
I.
An
exploratory
study
of
the
pressures
and
ethical
dilemmas
in
the
audit
conflict.
Revista
de
Contabilidad
–
Spanish
Accounting
Review
(2015).
http://dx.doi.org/10.1016/j.rcsar.2014.10.001
ARTICLE IN PRESS
G Model
RCSAR-47;
No.
of
Pages
11
Revista
de
Contabilidad
–
Spanish
Accounting
Review
xxx
(xx)
(2015)
xxx–xxx
REVISTA
DE
CONTABILIDAD
SPANISH
ACCOUNTING
REVIEW
www.elsevier.es/rcsar
An
exploratory
study
of
the
pressures
and
ethical
dilemmas
in
the
audit
conflict
Marcela
Espinosa-Pike∗,
Itsaso
Barrainkua1
Universidad
del
País
Vasco
UPV/EHU,
Avda.
Lehendakari
Agirre
83,
48015,
Bilbao,
Spain
a
r
t
i
c
l
e
i
n
f
o
Article
history:
Received
21
November
2013
Accepted
17
October
2014
Available
online
xxx
JEL
classification:
M42
Keywords:
Auditing
Ethical
dilemmas
Pressures
Audit
quality
Audit
firm
size
Auditor
experience
Small
and
medium-sized
audit
firms
a
b
s
t
r
a
c
t
The
present
study
analyzes
the
pressures
perceived
by
auditors
in
their
professional
activity.
Furthermore,
it
explores
the
ethical
acceptability
of
questionable
practices
and
the
way
auditors
resolve
the
conflicts
of
interest
with
which
they
are
confronted.
This
paper
also
studies
the
influence
of
the
size
of
the
audit
firm
and
the
experience
of
the
auditors
on
the
perception
of
pressures,
their
ethical
judgment,
and
the
way
of
resolving
conflicts
of
interest.
Data
were
collected
through
a
questionnaire
administered
to
auditors
from
small
and
medium-sized
audit
firms
in
Spain,
members
of
REA
(Registro
de
Economistas
Auditores).
This
study
contributes
to
the
international
academic
literature
on
auditing
behavior,
as
it
provides
new
empirical
data
on
the
pressures
perceived,
not
only
those
from
the
audit
client,
which
have
been
extensively
studied
in
the
academic
literature,
but
in
addition,
it
highlights
pressures
arising
from
the
audit
firm
itself
that
could
also
have
a
detrimental
effect
on
the
audit
quality.
It
also
contributes
to
the
understanding
of
the
effect
of
these
pressures
on
the
behavior
of
auditors.
The
results
of
this
study
are
also
of
particular
relevance
for
the
legal
and
professional
Spanish
auditing
regulators
as
they
face,
at
this
moment,
the
challenge
of
developing
a
set
of
ethical
standards
that
should
improve
the
ethical
judgment
and
behavior
of
accounting
professionals.
©
2013
ASEPUC.
Published
by
Elsevier
España,
S.L.U.
All
rights
reserved.
Un
estudio
exploratorio
de
las
presiones
y
dilemas
éticos
en
el
conflicto
de
auditoría
Palabras
clave:
Auditoria
dilemas
éticos
presiones
calidad
de
la
auditoria
tama˜
no
de
la
firma
de
auditoría
experiencia
del
auditor
peque˜
nas
y
medianas
firmas
de
auditoría
r
e
s
u
m
e
n
El
presente
estudio
analiza
las
presiones
percibidas
por
los
auditores
en
el
ejercicio
de
su
actividad
profesional.
Así
mismo,
explora
la
aceptabilidad
ética
de
ciertas
prácticas
cuestionables
y
la
forma
en
que
los
auditores
resuelven
los
conflictos
de
interés
a
los
que
se
enfrentan.
Este
trabajo
estudia
además
la
influencia
del
tama˜
no
de
la
firma
de
auditoría
y
de
experiencia
de
los
auditores
en
la
percepción
de
presiones,
su
juicio
ético
y
la
forma
de
resolver
los
conflictos
de
interés.
Para
llevar
a
cabo
este
objetivo,
se
ha
realizado
una
encuesta
a
los
miembros
del
Registro
de
Economistas
Auditores
(REA).
Este
estudio
contribuye
a
la
literatura
académica
internacional
sobre
el
comportamiento
en
la
auditoría,
ya
que
proporciona
nuevos
datos
empíricos
sobre
las
presiones
percibidas,
no
sólo
las
provenientes
del
cliente
de
auditoría,
que
han
sido
ampliamente
estudiadas
por
la
literatura,
sino
que
además,
pone
de
relieve
las
presiones
procedentes
de
la
propia
firma
de
auditoría,
y
su
efecto
perjudicial
para
la
calidad
de
la
auditoría.
Además,
avanza
en
la
comprensión
del
efecto
de
estas
presiones
en
el
comportamiento
final
de
auditor.
Los
resultados
de
este
trabajo
son
de
especial
relevancia
para
la
regulación
legal
y
profesional
de
la
audi-
toría
en
Espa˜
na
que
se
enfrenta
al
reto
de
desarrollar
unas
normas
de
ética
que
guíen
el
comportamiento
de
los
auditores.
©
2013
ASEPUC.
Publicado
por
Elsevier
España,
S.L.U.
Todos
los
derechos
reservados.
∗Corresponding
author.
Tel.:
+34
94
601
3873.
E-mail
addresses:
marcela.espinosa@ehu.es
(M.
Espinosa-Pike),
Itsaso.barrainkua@ehu.es
(I.
Barrainkua).
1Tel.:
+34
94
601
3755.
http://dx.doi.org/10.1016/j.rcsar.2014.10.001
1138-4891/©
2013
ASEPUC.
Published
by
Elsevier
España,
S.L.U.
All
rights
reserved.

Please
cite
this
article
in
press
as:
Espinosa-Pike,
M.,
&
Barrainkua,
I.
An
exploratory
study
of
the
pressures
and
ethical
dilemmas
in
the
audit
conflict.
Revista
de
Contabilidad
–
Spanish
Accounting
Review
(2015).
http://dx.doi.org/10.1016/j.rcsar.2014.10.001
ARTICLE IN PRESS
G Model
RCSAR-47;
No.
of
Pages
11
2
M.
Espinosa-Pike,
I.
Barrainkua
/
Revista
de
Contabilidad
–
Spanish
Accounting
Review
xxx
(xx)
(2015)
xxx–xxx
1.
Introduction
Audit
firms
are
subject
to
the
market
rules,
and
therefore,
their
profitability
depends
on
the
relationship
between
audit
fees
and
the
cost
of
performing
the
audit
engagement
(IAASB,
2014).
In
pursuit
of
profitability,
audit
firms
will
try
to
minimize
the
costs
of
the
services
provided.
However,
in
order
to
fulfill
their
attest
function,
auditors
must
perform
high
quality
audits,
which
could
increase
the
cost
of
the
audit
engagement.
Some
authors
argue
that
audit
firms’
culture
has
changed
in
last
years,
so
that,
increasingly,
they
prioritize
business
goals
(Wyatt,
2004),
although
firms,
still,
formally
display
the
idea
of
the
public
interest
in
the
exercise
of
their
activity
(Davenport
&
Dellaportas,
2009).
The
audit
market
has
become
increasingly
competitive
in
the
last
decades
and,
even
more
so
in
the
wake
of
the
current
economic
crisis.
This
environment
has
led
to
more
power
on
the
part
of
audit
clients
and,
therefore,
the
pressures
they
put
on
audit
firms
have
been
sharpened.
These
pressures
are
evidenced
both
in
the
nego-
tiation
of
the
audit
engagement
fee
as
well
as
in
clients’
power
to
influence
auditors’
judgment
regarding
certain
accounting
prac-
tices
(Boyd,
2004).
The
decisions
of
the
audit
firm
on
how
to
manage
this
conflict
between
cost
and
quality
(McNair,
1991)
or,
what
some
authors
have
called
a
conflict
between
commercial
and
professional
goals
(Gendron,
Suddaby,
&
Lam,
2006;
Hanlon,
1994;
Picard,
Durocher,
&
Gendron,
2014;
Sweeney
&
McGarry,
2011)
will
affect
the
audit
quality.
Audit
quality
is
defined
as
the
market-assessed
probability
that
an
auditor
will
detect
errors
and
irregularities
(technical
skills)
and
report
them
(independence)
(DeAngelo,
1981).
In
this
sense,
the
knowledge
and
experience
of
the
auditors
of
the
engagement,
the
time
devoted
to
the
engagement
and
the
auditors’
ethical
values
and
attitudes
would
be
shown
both
on
the
detection
of
errors
and
irregularities,
and
on
the
disclosure
of
them,
once
detected
(IAASB,
2014)
and,
accordingly,
will
directly
affect
the
audit
quality.
There-
fore,
in
this
context,
auditors
will
suffer
pressures
from
the
audit
client
and
from
the
audit
firm
as
well.
The
behavioral
accounting
literature
has
expressed
concern
about
how
pressures
can
affect
professional
accountants’
attitudes
and
performance
(DeZoort
&
Lord,
1997;
Lord
&
DeZoort,
2001),
however,
it
has
focused
mainly
in
the
pressures
from
audit
clients.
There
is
a
need
for
further
research
on
the
pressures
from
within
the
audit
firm
that
arise
due
to
the
inherent
conflict
between
cost
and
quality.
The
existence
of
pressures
will
involve
a
reduction
in
the
qual-
ity
of
the
audit
services,
to
the
extent
that
the
auditor
succumbs
to
these
pressures.
In
this
regard,
the
behavior
of
auditors
will
depend
on
the
ethical
acceptability
of
the
situations
that
they
are
confronted
with,
and
also,
on
the
reference
groups
and
factors
that
auditors
consider
when
resolving
the
conflicts
of
interest
faced.
The
aim
of
this
study
is
to
explore
the
specific
pressures
faced
by
Spanish
auditors
both
from
the
audit
firm
and
from
the
audit
client,
to
analyze
the
auditor’s
ethical
judgment
of
several
questionable
practices
as
well
as
to
determine
the
way
auditors
resolve
conflict
of
interests.
In
addition,
this
paper
studies
the
influence
of
the
size
of
the
audit
firm
and
auditors’
experience
on
the
issues
under
study.
This
paper
contributes
to
the
very
scarce
literature
on
the
effect
of
pressures
on
the
final
behavior
of
auditors.
Further,
it
progresses
in
the
analysis
of
the
influence
that
ethical
judgment
and
the
way
of
resolving
ethical
conflicts
have
in
auditors’
capacity
to
withstand
client’s
and
audit
firm’s
pressures.
Moreover,
by
providing
evidence
of
the
actual
pressures
that
Spanish
auditors
face
this
paper
extends
prior
research
regarding
the
organizational
context
in
which
the
audit
work
takes
place.
The
study
contributes
also
to
the
knowledge
of
the
particu-
larities
of
small
and
medium-sized
audit
firms,
which,
despite
the
important
volume
they
represent
in
Europe,
have
been
so
far
neglected
in
the
audit
literature
(Azkue,
2012;
Serrano
Madrid,
Ruiz
Barbadillo,
&
Martínez
Conesa,
2013).
In
addition,
most
studies
in
this
field
have
been
conducted
in
Anglo-Saxon
environments,
where
the
profession
has
a
long
tradi-
tion,
and
with
the
legal
system
based
on
the
common
law
or
non
legalistic
approach.
Therefore,
understanding
the
pressures
and
how
auditors
resolve
the
conflicts
of
interest
in
a
socio-politically
different
context
to
the
commonly
studied
countries,
contributes
to
the
academic
literature
on
the
behavior
of
auditors
and
its
influence
on
the
auditing
quality
in
the
global
context
of
financial
markets.
Further,
the
results
of
the
study
are
fully
timely
and
relevant
for
the
audit
regulation
in
Spain,
and
particularly,
for
the
current
devel-
opment
of
the
ethical
standards.
These
standards
should
take
into
consideration
the
pressures
faced
by
professionals
in
their
activity
and
the
factors
taken
into
account
for
their
resolution
in
order
to
issue
useful
and
contextually
adapted
ethical
standards.
The
paper
is
structured
as
follows:
after
this
introduction,
we
present
the
theoretical
framework
and
the
research
questions
focusing
on
the
pressures
faced
by
auditors,
their
ethical
judg-
ment
and
the
conflict
of
interest’s
resolution.
We
then
introduce
the
methodology
used
in
the
research.
In
Section
4,
we
present
the
results
obtained
and
finally,
the
conclusions,
limitations
and
future
research
lines
are
put
forward.
2.
Literature
review
and
research
questions
2.1.
Pressures
perceived
by
auditors
in
their
professional
activity
The
conflict
between
commercial
and
professional
goals
will
affect
the
auditor
employee
at
the
firm,
as
he
or
she
will
suffer
pressures
that
will
affect
the
search
for
errors
and
irregularities,
as
well
as
the
pressures
related
to
the
disclosure
of
the
same,
once
discovered.
In
order
to
cope
with
the
increasing
price
competition,
audit
firms
will
seek
to
minimize
the
costs
of
the
audit
engagement
to
obtain
the
maximum
profitability
of
the
service.
An
audit
budget
reduction
will
more
likely
imply
that
fewer
resources
are
devoted
to
the
search
for
errors
and
irregularities,
which
ultimately
would
threaten
the
audit
quality.
One
of
the
most
effective
cost
control
in
audit
engagement
is
through
the
control
of
time
(Otley
&
Pierce,
1996).
However,
too
tight
time
budgets
cause
undesirable
behaviors
(Alderman
&
Deitrick,
1982;
Lightner,
Leisenring,
&
Winters,
1983;
Otley
&
Pierce,
1996;
Pierce
&
Sweeney,
2004;
Svanberg
&
Öhman,
2013).
If
the
auditor
employee
believes
that
the
budgeted
hours
by
his
or
her
firm
are
not
sufficient
to
achieve
the
desired
result,
he
or
she
can
behave
meeting
the
budget
or
working
more
hours
than
those
budgeted.
In
the
first
case,
the
quality
will
be
difficult
to
achieve,
as
the
auditor
may
not
be
able
to
obtain
the
necessary
evidence,
or
do
not
properly
document
the
work
done
or
do
not
find,
due
to
lack
of
time,
important
information
on
the
audited
company.
If
the
audi-
tor
chooses
the
second
option,
this
is,
to
spend
more
hours
than
those
budgeted,
he
or
she
can
report
the
actual
hours
or
under-
state
the
hours
worked.
Prior
studies
show
that
underreporting
of
time
is
a
common
practice
among
auditors,
however,
this
practice
leads
to
unintended
consequences
such
as
misleading
staff
evalua-
tions,
lost
revenue
for
the
audit
firm,
unrealistic
future
budgets
and
audit
quality
reduction
acts
on
future
audits
(Otley
&
Pierce,
1996;
Svanberg
&
Öhman,
2013;
Sweeney
&
Pierce,
2006).
Another
alternative
for
the
audit
firms
to
reduce
the
audit
cost
is
to
select
less
experienced
personnel
for
the
engagement
team.
This
might
have
as
a
consequence
a
less
competent
engagement
team
and,
therefore,
will
pose
a
serious
threat
for
audit
quality
(DeZoort
&
Lord,
1997).
If
the
audit
team
lacks
the
necessary
technical

Please
cite
this
article
in
press
as:
Espinosa-Pike,
M.,
&
Barrainkua,
I.
An
exploratory
study
of
the
pressures
and
ethical
dilemmas
in
the
audit
conflict.
Revista
de
Contabilidad
–
Spanish
Accounting
Review
(2015).
http://dx.doi.org/10.1016/j.rcsar.2014.10.001
ARTICLE IN PRESS
G Model
RCSAR-47;
No.
of
Pages
11
M.
Espinosa-Pike,
I.
Barrainkua
/
Revista
de
Contabilidad
–
Spanish
Accounting
Review
xxx
(xx)
(2015)
xxx–xxx
3
competence,
the
likelihood
that
errors
and
irregularities
are
detected
will
be
reduced.
Once
the
errors
and
irregularities
have
been
detected,
the
audi-
tor
could
suffer
pressures
from
the
client
to
not
reveal
the
same
in
the
audit
report.
These
pressures
may
affect
the
auditor’s
judgment,
leading
the
auditors
to
look
for
the
evidence
that
supports
the
pre-
ferred
alternative
of
the
company
(Hatfield,
Jackson,
&
Vandervelde,
2011;
Nelson,
2006).
In
addition,
auditors
may
also
suffer
pressures
from
superiors
to
change
conclusions/opinions
in
order
to
satisfy
client’s
desires.
DeZoort
and
Lord
(1997)
state
that
subordinate
auditors
are
subject
to
obedience
pressures,
which
refer
to
the
pressures
to
submit
to
the
directions
of
authority.
Taking
into
account
the
current
audit
work
environment
we
wonder
whether
auditors
in
Spanish
small
and
medium
sized
firms
perceive
the
existence
of
pressures
both
from
the
audit
firm
itself
and
from
the
client.
Accordingly,
we
present
the
following
research
question:
RQ1:
Do
Spanish
auditors
perceive
the
existence
of
pressures
from
the
firm
as
well
as
from
the
audit
client?
Academic
literature
suggests
that
pressures
on
auditors
are
likely
to
vary
according
to
the
size
of
the
firm
(DeZoort
&
Lord,
1997;
Herrbach,
2001;
Pierce
&
Sweeney,
2010).
In
this
regard,
previous
studies
show
(Calderon
&
Ofobike,
2008;
Hudaib
&
Cooke,
2005;
López
Iturriaga
&
Zarza
Herranz,
2010)
that
clients
of
the
non
Big-four
audit
firms
change
more
often
the
audit
firm,
which
increases
competition
in
this
market
seg-
ment.
This
higher
competition
hinders
client
retention
for
audit
firms,
which
ultimately
can
led
to
increased
client
pressures,
not
only
to
not
reveal
the
errors
and
irregularities
discovered
dur-
ing
the
engagement,
but
also,
pressures
to
reduce
audit
prices.
Moreover,
as
the
number
of
clients
in
small
audit
firms
is
lower,
the
economic
dependence
these
firm
have
on
the
client
is
higher
(DeAngelo,
1981).
Therefore,
in
this
situation
clients’
opportunity
to
exert
pressure
on
small
audit
firms
might
be
greater.
Regarding
the
pressures
derived
from
audit
budgets,
Paino,
Smith,
and
Ismail
(2012)
revealed
that
audit
budget
related
pressures
were
even
more
problematic
for
the
smaller
firms.
The
economies
of
scale
that
occur
in
the
large
firms
enable
these
firms
to
operate
at
lower
costs
(Carrera,
Gutiérrez,
&
Carmona,
2005;
García
Benau,
Ruiz
Barbadillo,
&
Vico
Martínez,
2000).
Conversely,
other
studies
put
forward
that
the
competitive
culture
of
the
bigger
firms
puts
audi-
tors
in
these
firms
under
greater
pressure.
In
this
regard,
McNamara
and
Liyanarachchi
(2008)
found
that
auditors
in
non
Big-four
firms
perceived
time
budgets
as
easier
to
attain
than
auditors
in
the
biggest
firms.
The
same
path
of
thinking
could
be
applied
for
the
differences
among
small
and
medium
sized
audit
firms,
consequently,
the
study
analyzes
if
the
perception
of
pressures
differs
between
small
and
medium
sized
audit
firms
of
our
sample.
RQ2:
How
does
audit
firm’s
size
affect
auditors’
perception
of
pressures?
As
auditors
advance
their
professional
career,
the
frequency
as
well
as
the
source
of
the
pressures
they
face
might
be
different.
In
the
audit
career,
the
length
of
experience
and
the
position
in
the
firm
are
closely
related,
as
their
promotion
depends
largely
in
their
seniority.
Accordingly,
to
review
the
academic
literature
regarding
the
evolution
in
the
auditors’
perception
we
will
use
the
length
of
experience
and
the
rank
in
the
firm
interchangeably.
Shapeero,
Koh,
and
Killough
(2003)
suggest
that
the
pressures
are
lower
as
auditors
gain
experience.
These
authors
attribute
this
decrease
in
the
pressures
to
the
fact
that,
with
experience,
auditors
become
more
confident
in
their
job.
Auditors
at
lower
ranks
might
be
under
greater
pressure
to
prove
their
competence
and
skills
for
performing
quality
audits
(McNamara
&
Liyanarachchi,
2008).
Therefore,
subordinate
auditors,
such
as
assistant
and
seniors,
will
presumably
face
more
pressures
relating
to
time
constraint
and
also
related
to
the
competence
necessary
to
perform
the
audit
job.
Moreover,
several
studies
report
that
seniors
are
the
audit
person-
nel
subject
to
the
greatest
time
pressure
(Raghunathan,
1991)
and
that
the
perception
of
the
time
budget
pressure
lessens
as
auditors
advance
in
the
firm
(Alderman
&
Deitrick,
1982;
Cook
&
Kelley,
1988).
Also,
within
the
audit
firm
the
pressures
from
superiors
to
modify
the
opinion
might
be
very
powerful
for
auditors
in
lower
positions
due
to
the
hierarchical
structure
of
the
firms
and
the
system
of
evaluation
and
promotion
of
individuals.
However,
the
differences
among
the
more
and
the
less
expe-
rienced
auditors
relating
to
client
pressure
cannot
be
anticipated.
Some
empirical
studies
have
found
that
the
pressure
to
support
the
client
preference
when
assessing
accounting
practices
is
higher
at
lower
ranked
auditors
as
they
are
more
influenced
by
the
potential
for
additional
business
opportunities
than
higher
ranked
auditors
(Moreno
&
Bhattacharjee,
2003).
However,
findings
in
other
stud-
ies
(Koch,
Weber,
&
Wüstemann,
2012)
show
that
clients
can
exert
more
pressure
on
auditors
in
higher
ranks.
The
compensation
and
evaluation
of
these
high
rank
auditors
are
more
linked
to
the
fee
they
generate
and
therefore
are
more
sensitive
to
client
retention
incentives.
Therefore,
to
test
how
the
perception
of
pressures
differs
with
the
experience
we
present
the
following
research
question.
RQ3:
How
does
length
of
experience
affect
auditors’
perception
of
pressures?
2.2.
Ethical
judgment
of
questionable
practices
Moral
psychology
seeks
to
find
an
answer
to
the
ethical
thinking
and
actions
of
individuals.
This
approach
to
morality
is
focused
on
judgment,
on
studying
problem-solving
methods
and
on
how
the
system
of
values
of
each
individual
dictates
the
way
in
which
he/she
solves
day-to-day
conflicts.
Moral
psychologist
Rest
(1986)
developed
the
Four
Component
Model
which
tries
to
explain
the
elements
of
ethical
action.
He
concluded
that
ethical
action
is
the
product
of
these
psychologi-
cal
processes:
moral
sensitivity
(recognition);
moral
judgment
or
reasoning;
moral
motivation;
and
moral
character.
Moral
judgment
refers
to
the
ethical
judgments
individuals
make
about
the
courses
of
action
identified
previously.
According
to
this
ethical
decision
model
the
ethical
evaluation
of
the
action
influences
the
behavior.
Prior
research
on
ethical
decision
making
in
accounting
has
found
that
the
ethical
evaluation
of
question-
able
practices
impacts
the
intention
to
engage
in
these
practices
as
well
as
their
commission
(Lightner
et
al.,
1983;
Sweeney,
Arnold,
&
Pierce,
2010).
Taken
into
account
Rest’s
model
of
ethical
action,
we
suggest
that
the
ethical
judgment
of
questionable
behavior
could
reveal
the
possibility
of
acting
in
such
a
way.
Therefore,
additional
research
on
the
ethical
acceptability
of
certain
practices
auditors
might
engage
in
is
necessary
to
prevent
dysfunctional
behavior.
Our
fourth
research
question
is
stated
as
follows.
RQ4:
Which
is
the
ethical
judgment
of
the
auditors
regarding
cer-
tain
questionable
practices?
Prior
studies
have
revealed
the
influence
of
auditors’
firm
size
on
the
ethical
decision
process.
The
different
work
environment
of
large
and
small
firms
might
impact
the
moral
reasoning
abilities
of
auditors
(Eynon,
Hill,
&
Stevens,
1997;
Sweeney
et
al.,
2010).
As
Eynon
et
al.
(1997)
suggested
auditors
in
small
firms
may
have
less
organizational
support
mechanism
than
those
in
larger
firms

Please
cite
this
article
in
press
as:
Espinosa-Pike,
M.,
&
Barrainkua,
I.
An
exploratory
study
of
the
pressures
and
ethical
dilemmas
in
the
audit
conflict.
Revista
de
Contabilidad
–
Spanish
Accounting
Review
(2015).
http://dx.doi.org/10.1016/j.rcsar.2014.10.001
ARTICLE IN PRESS
G Model
RCSAR-47;
No.
of
Pages
11
4
M.
Espinosa-Pike,
I.
Barrainkua
/
Revista
de
Contabilidad
–
Spanish
Accounting
Review
xxx
(xx)
(2015)
xxx–xxx
when
ethical
dilemmas
arise.
In
this
respect,
these
authors
reported
lower
levels
of
moral
reasoning
abilities
for
auditors
in
smaller
firms
than
for
auditor
in
Big
4
firms.
Pierce
and
Sweeney
(2010)
found
that
auditors
from
medium-sized
firms
had
lower
ethical
judgment
than
those
working
at
smaller
firms
and
Big
4
audit
firms.
These
authors
suggested
that
medium-sized
firms
face
the
same
pressures
derived
from
cost
versus
quality
conflict
that
Big
4
audit
firms
do.
However,
as
they
are
much
less
in
the
public
eye
than
Big
4
firms
they
pay
less
explicit
attention
to
the
ethical
decision
making
(Pierce
&
Sweeney,
2010).
Sweeney
et
al.
(2010),
overall,
did
not
observe
that
the
size
of
the
audit
firm
influenced
individuals’
ethical
evaluation
and
neither
did
other
previous
stud-
ies
(Clarke,
Hill,
&
Stevens,
1996;
Sweeney
&
Roberts,
1997).
As
prior
studies
seem
inconclusive
we
present
the
following
research
question.
RQ5:
How
does
audit
firm’s
size
affect
auditors’
ethical
judgment?
One
of
the
most
important
findings
of
research
into
moral
psychol-
ogy
is
that
chronological
age
and
formal
education
are
forerunners
of
moral
development
(Rest,
1986).
According
to
the
Theory
of
Cognitive
Moral
Development
by
Kohlberg
(1984),
age
is
a
variable
that
may
significantly
influence
the
development
of
levels
of
moral
reasoning
among
individuals.
Numerous
papers
have
taken
this
theory
as
a
jumping-off
point
for
analysing
the
influence
of
age
and/or
experience
on
ethical
decision
making.
However,
the
findings
are
inconclusive.
In
a
review
of
the
literature
conducted
by
O’Fallon
and
Butterfield
(2005)
the
authors
conclude
that
the
length
of
work
experience
is
positively
related
to
ethical
decision-making.
However,
specifically
in
the
accounting
literature,
Jones,
Massey,
and
Thorne
(2003)
report
mixed
results
regarding
this
relationship.
Lin
and
Zhang
(2011)
show,
in
analyses
of
the
ethical
sensitivity
of
accountants,
that
as
the
work
experience
of
the
subjects
studied
increases,
so
does
their
standard
of
ethical
behavior.
Also
Sierra
Molina
and
Orta
Pérez
(2005)
found
a
posi-
tive
relationship
between
auditors
experience
and
ethical
values.
By
contrast,
other
studies
on
auditors
and
financial
managers
have
concluded
that
experience
(Ponemon,
1992)
has
a
significant
but
negative
impact
on
the
level
of
ethical
reasoning
and
also
that
older
auditors
showed
lower
levels
of
moral
reasoning
than
younger
ones
(Eynon
et
al.,
1997).
Finally,
other
studies
did
not
report
any
signif-
icant
correlation
between
experience
and
the
ethical
judgment’s
of
accountants
(Shafer,
Morris,
&
Ketchand,
2001;
Sweeney
et
al.,
2010).
In
order
to
advance
in
our
research
question
and
due
to
the
fact
that
in
the
audit
context,
age
is
highly
related
to
experience,
we
present
our
research
question
as
follows:
RQ6:
How
does
length
of
experience
affect
auditors’
ethical
judgment?
2.3.
Resolution
of
conflicts
of
interest
The
response
auditors
give
to
the
pressures
received
may
depend
on
which
their
reference
groups
are
in
ethical
conflict
res-
olution.
The
way
to
resolve
this
conflict
between
commercial
and
professional
goals
will
mark
the
culture
of
the
organization,
will
determine
the
ethical
level
of
the
firm
and
will
we
transmitted,
either
explicitly
or
implicitly,
to
all
members
in
the
organization
(Davenport
&
Dellaportas,
2009;
Sweeney
&
McGarry,
2011).
The
importance
of
the
way
of
resolving
conflicts
of
interest
in
auditor’s
context
has
been
highlighted
by
the
Code
of
Ethics
for
professional
accountants
in
its
new
edition
(IESBA,
2013).
The
International
Ethics
Standard
Board
of
Accountants
(IESBA)
has
recently
revised
the
Code
of
Ethics
in
order
to
establish
more
spe-
cific
requirements
and
provide
more
comprehensive
guidance
to
support
professional
accountants
in
identifying,
evaluating,
and
managing
conflicts
of
interest.
If
the
auditor
is
highly
socialized
in
the
audit
firm,
when
fac-
ing
ethical
conflicts,
he
will
try
to
make
the
decisions
coincide
as
much
as
possible
with
the
policies
of
the
firm,
i.e.
with
the
behavior
expected
by
the
firm.
As
Lord
and
DeZoort
(2001,
p.
216)
state:
“Even
if
auditors
clearly
understand
their
professional
responsibilities,
they
may
choose
to
act
unethically
to
ensure
a
positive
performance
evaluation
or
to
simply
be
viewed
as
a
team
player”.
Conversely,
if
the
auditor
is
more
committed
to
the
professional
values,
he
or
she
will
more
likely
withstand
the
pressures
from
the
firm
or
from
the
client,
maintaining
the
professional
values
above
the
business
goals
of
the
audit
firm.
Therefore,
in
this
context,
we
can
presume
that
the
way
auditors
resolve
their
conflicts
in
their
professional
activity
may
signifi-
cantly
affect
the
quality
of
the
audit.
In
a
context
characterized
by
legalistic
approach,
the
way
of
resolving
ethical
conflicts
might
be
strongly
influenced
by
legal
requirements
governing
the
matter.
This
is
the
case
of
Spain
where
the
ethical
guidelines
in
auditing
have
been
largely
stated
in
the
legal
regulation
and
limited
mainly
to
the
provisions
and
incom-
patibilities
regulated
by
law
to
preserve
the
auditor
independence.
Moreover,
with
the
goal
of
increasing
audit
quality
and
recovering
investors’
confidence,
the
audit
reforms
initiated
under
the
Span-
ish
Financial
Act
44/2002
focused
on
the
strengthening
of
the
audit
supervisory
and
disciplinary
system
(De
las
Heras,
Ca˜
nibano,
&
Moreira,
2012).
Although
in
Spain
there
are
two
professional
bodies
that
represent
the
audit
profession2and
that
provide
some
eth-
ical
guidance,
the
Spanish
professional
organizations
have
never
acquired
the
autonomy
and
power
that
accounting
organizations
in
other
countries
hold
(Gonzalo
Angulo,
1995).
This
situation
has
led,
as
a
consequence,
to
a
lack
of
professional
leadership
and,
also,
to
the
absence
of
firmly
established
professional
code
of
conduct
to
guide
the
actions
of
the
Spanish
auditors.
The
regulation
of
the
ethical
aspects
of
auditing
in
Spain
is
now
in
a
change
process.
In
this
regard,
the
Spanish
Audit
Law,
approved
by
Legislative
Royal
Decree
1/2011,
of
1
July,
introduces,
for
the
first
time,
among
the
legal
sources
that
must
be
considered
in
per-
forming
the
audit,
the
ethical
standards.
The
development
of
these
standards
is
still
in
progress.
In
addition,
the
adoption
of
the
Inter-
national
Auditing
Standards
by
the
Spanish
auditing
legislation
has
also
widened
the
ethical
guidance.
Although,
as
we
have
stated,
a
new
perspective
with
respect
to
ethical
regulation
in
Spain
is
beginning,
by
the
time
the
study
was
carried
out,
these
new
guidelines
were
not
adopted.
With
this
in
mind,
we
present
our
next
research
question
in
the
following
terms:
RQ
7:
What
factors
do
Spanish
auditors
take
into
account
in
the
res-
olution
of
their
conflicts
of
interest?
Is
the
importance
granted
to
the
different
factors
affected
by
audit
firm’s
size
or
length
of
expe-
rience?
Finally,
this
paper
explores
if
the
perception
of
pressures
on
the
part
of
the
auditors
is
affected
by
auditors’
ethical
judgment
and
the
way
of
resolving
conflicts
of
interests.
This
analysis
provides
insights
into
the
factors
that
may
increase
the
capacity
of
audi-
tors
to
withstand
pressures
in
the
audit
conflict.
In
this
regard,
we
present
the
last
research
question
as
follows:
2By
the
time
the
questionnaire
was
distributed
in
October
2012
there
were
three
professional
organizations;
Instituto
de
Censores
Jurados
de
Cuentas
de
Espa˜
na
(ICJCE),
Registro
de
Economistas
Auditores
del
Consejo
General
de
Colegios
de
Economistas
de
Espa˜
na
(REA)
and
Consejo
Superior
de
Colegios
Oficiales
Titula-
dos
Mercantiles
de
Espa˜
na
(REGA).
In
2013,
as
a
result
of
the
unification
of
the
professional
bodies
REA
and
REGA,
REA+REGA
Auditores
del
Consejo
General
de
Economistas
was
created.
Accordingly,
there
are
now
two
professional
organizations
that
represent
Spanish
auditors.

Please
cite
this
article
in
press
as:
Espinosa-Pike,
M.,
&
Barrainkua,
I.
An
exploratory
study
of
the
pressures
and
ethical
dilemmas
in
the
audit
conflict.
Revista
de
Contabilidad
–
Spanish
Accounting
Review
(2015).
http://dx.doi.org/10.1016/j.rcsar.2014.10.001
ARTICLE IN PRESS
G Model
RCSAR-47;
No.
of
Pages
11
M.
Espinosa-Pike,
I.
Barrainkua
/
Revista
de
Contabilidad
–
Spanish
Accounting
Review
xxx
(xx)
(2015)
xxx–xxx
5
RQ8:
Which
is
the
influence
of
ethical
judgment
and
the
way
of
resolving
the
conflicts
of
interest
on
auditors’
perception
of
pressures?
3.
Methodology
3.1.
Sample
and
data
collection
In
order
to
give
response
to
the
research
questions
stated
above,
we
used
a
survey
as
the
research
methodology.
A
survey
was
dis-
tributed
in
October
2012
among
the
Spanish
auditors
members
of
one
of
the
professional
body
REA
(Registro
de
Economistas
Audi-
tores).
This
professional
organization
is
comprised
mainly
by
small
and
medium-sized
audit
firms
which
are
a
considerable
segment
of
the
audit
market
in
Spain
(98%
of
the
Spanish
audit
firms
are
in
this
market
segment,
and
represent
over
a
thirty
percent
of
the
total
turnover,
ICAC,
2012).
The
participation
in
the
study
was
voluntary
and
respondents
were
assured
that
the
information
would
be
used
solely
for
the
purpose
of
this
study
and
that
this
data
collection
process
ensured
the
anonymity.
The
questionnaire
was
sent
to
the
auditors
twice.
In
the
first
request,
117
responses
were
received
and
in
the
second
request
83
additional
responses
were
received.
74
questionnaires
were
elim-
inated
from
the
final
sample
due
to
a
missing
response.
Therefore,
the
sample
size
for
the
present
study
was
reduced
to
126.
In
order
to
test
for
a
non-response
bias,
we
compared
the
data
of
the
respondents
who
answered
in
the
first
request
with
the
data
of
those
who
responded
to
the
survey
in
the
second
one.
Late
respondents
are
considered
as
a
surrogate
of
non-respondents.
No
statistically
significant
differences
were
found
between
the
responses
of
early
and
late
respondents.
Therefore,
no
problems
of
non-response
bias
were
found.
3.2.
Questionnaire
A
questionnaire
was
developed
by
the
authors
in
order
to
explore
the
pressures
faced
by
auditors,
gather
the
ethical
accept-
ability
of
certain
practices
and
analyze
the
way
auditors
solve
the
conflicts
of
interest
they
face
when
performing
their
profes-
sional
activity.
The
measures
used
in
this
questionnaire
draw
on
instruments
employed
in
the
previous
literature
on
behavioral
accounting
and
ethics
in
auditing
(e.g.
DeZoort
&
Lord,
1997;
Otley
&
Pierce,
1996;
Sweeney
et
al.,
2010).
Before
distributing
the
questionnaire
among
auditors,
a
pilot
test
was
carried
out
in
a
medium-sized
audit
firm
and
the
same
did
not
reveal
any
comprehension
difficulties.
3.3.
Data
analysis
In
order
to
test
for
the
dimensionality
of
the
scales
employed
in
the
questionnaire
principal
component
factor
analyses
were
con-
ducted.
The
differences
regarding
the
size
of
the
audit
firm
and
the
length
of
experience
were
tested
using
univariate
tests
(one-way
ANOVA
tests
and
Chi-square
tests).
Finally,
to
analyze
the
rela-
tionship
between
the
variables
under
study
multiple
and
logistic
regressions
were
conducted.
4.
Results
4.1.
Demographic
characteristics
Demographic
information
about
the
respondents
is
summarized
in
Table
1.
The
audit
firm
size
has
been
divided
into
three
categories.
The
first
category
is
comprised
by
sole
practitioners.
The
second
Table
1
Demographic
data.
No.
%
Practicing
auditor
Yes
110
87%
No
13
10%
Undisclosed
3
3%
Firm
size
Sole
practitioner
29
23%
Small
firm
62
49%
Medium-sized
firm 18
14%
Not
practicing 12
10%
Undisclosed
5
4%
Experience
as
auditor
Up
to
10
years
22
17%
More
than
10
years
89
71%
Not
practicing 12
10%
Undisclosed
3
2%
Rank
in
the
firm
Partner
77
61%
Other
29
23%
Not
practicing
12
10%
Undisclosed
8
6%
Total
sample
126
category
refers
to
small
firms,
where
firms
with
up
to
five
partners
were
considered.
Finally
firms
with
more
than
five
partners
but
that
are
not
the
Big-four
firms
are
categorized
as
medium-sized
firms.
Most
of
the
respondents
are
practicing
auditors
belonging
primarily
to
small
firms
(49%).
The
rest
of
the
sample
is
composed
by
sole
practitioners
(23%)
and,
to
a
lesser
extent,
by
auditors
who
belong
to
medium-sized
audit
firms
(14%).
61%
of
the
sample
are
partners
and
their
experience
in
auditing
is
over
10
years,
in
most
cases
(71%).
4.2.
Pressures
perceived
by
auditors
in
their
professional
activity
The
first
research
question
analyses
the
perception
of
several
pressures
by
the
auditors.
To
this
end
respondents
were
asked
about
the
frequency
of
several
pressures,
usually
shown
in
the
lit-
erature
about
auditing
context.
The
frequency
was
introduced
as
a
five-point
Likert
scale,
where
1
is
never
and
5
is
almost
always.
Table
2
shows
the
nature
and
frequency
of
the
pressures
perceived
as
well
as
the
mean
score
in
each
of
the
pressures.
The
responses
were
then
ranked
according
to
the
mean
from
highest
to
lowest.
The
results
reveal
that,
in
general,
the
mean
frequency
with
which
auditors
perceive
any
of
these
pressures
is
less
than
three.
Therefore,
the
results
show
that
they
do
not
perceive
the
pressures
very
often.
Nevertheless,
the
results
suggest
that,
in
general,
the
auditors
in
the
sample
recognize
that
they
receive
every
pressure
in
a
lesser
or
greater
degree.
The
pressure
most
clearly
felt
among
auditors
is
the
one
received
from
the
client
to
modify
its
conclusions/opinions/report.
In
this
case,
the
majority
of
the
respondents
(62%)
perceived
these
pressures
with
some
frequency
(sometimes,
often
or
nearly
always).
Then,
the
second
most
frequently
perceived
pressure
is
to
perform
the
audit
engagement
in
less
time
than
what
is
required
to
carry
out
a
quality
work,
followed
by
the
pressure
to
under-
report
time.
Both
of
these
pressures
are
related
to
the
conflict
between
the
commercial
and
professional
goals
described
above.
This
result
seems
to
support
the
thesis
defended
by
different
authors
(Davenport
&
Dellaportas,
2009;
Lord
&
DeZoort,
2001)
on
the
tendency
of
firms,
in
recent
years,
to
prioritize
business
objectives
to
the
detriment
of
professional
goals.
Next,
the
pressures
from
their
superiors
to
change
their
conclu-
sions/opinions
are
ranked
in
fourth
place,
which
reveals
that
this
pressure
is
not
very
often
felt.
This
could
reflect
the
non
existence
of
this
type
of
pressures
or
the
lack
of
its
perception
in
the
Spanish

Please
cite
this
article
in
press
as:
Espinosa-Pike,
M.,
&
Barrainkua,
I.
An
exploratory
study
of
the
pressures
and
ethical
dilemmas
in
the
audit
conflict.
Revista
de
Contabilidad
–
Spanish
Accounting
Review
(2015).
http://dx.doi.org/10.1016/j.rcsar.2014.10.001
ARTICLE IN PRESS
G Model
RCSAR-47;
No.
of
Pages
11
6
M.
Espinosa-Pike,
I.
Barrainkua
/
Revista
de
Contabilidad
–
Spanish
Accounting
Review
xxx
(xx)
(2015)
xxx–xxx
Table
2
Frequency
and
mean
of
the
pressures
perceived
in
the
exercise
of
their
activity.
Never
Rarely
Sometimes
Often
Nearly
always
Mean
1.
Pressures
from
the
client
to
change
your
conclusions/opinions/audit
report
18%
20%
50%
10%
2%
2.59
2.
Pressures
to
perform
the
audit
work
in
less
time
than
you
would
need
to
carry
out
a
work
with
enough
quality
44%
17%
25%
11%
3%
2.12
3.
Pressures
to
under
reporting
of
time
64%
20%
8%
4%
4%
1.65
4.
Pressures
from
superiors
to
change
your
conclusions/opinions
65%
16%
12%
4%
3%
1.62
5.
Pressures
to
perform
an
audit
job
without
having
the
necessary
competence
79%
9%
9%
2%
1%
1.35
context.
If
this
is
the
case,
the
possible
explanation
could
be
found
in
the
characteristics
of
the
sample
where
most
of
them
are
part-
ners,
but
also
the
cultural
characteristics
of
Spanish
context.
Spain
is
characterized
in
Hofstede’s
(1980)
Countries
Cultural
Index
by
a
high
power
distance,
which
explains
the
acceptability
of
superiors’
opinion
as
a
common
practice.
Finally,
with
less
than
1.5
mean,
the
pressure
to
perform
an
audit
work
without
having
the
necessary
competence
to
carry
it
out,
is
found.
4.3.
Influence
of
audit
firm’s
size
and
length
of
experience
on
auditors’
perception
of
pressures
The
frequency
with
which
auditors
perceive
these
pressures
may
be
conditioned
by
the
type
of
firm
and
the
experience
of
the
auditors.
Thus,
in
order
to
give
answer
to
research
questions
2
and
3,
we
compared
the
perception
of
pressures
by
the
firm
size
of
the
respondents
and
by
their
length
of
experience.
The
incidence
of
the
pressures
considering
them
as
a
whole
was
measured
by
the
combined
responses
of
the
five
pressures
listed
in
Table
2.
The
Cronbach’s
alpha
score
for
this
variable
is
0.82,
therefore
indicat-
ing
a
high
degree
of
reliability.
Factor
analysis
confirmed
that
this
variable
was
comprised
of
only
one
factor.
For
the
additional
analyses
presented
below
12
individuals
were
not
considered
due
to
the
fact
that
they
were
not
auditing
practi-
tioners
by
the
time
the
responses
were
collected.
One-way
ANOVA
tests
were
carried
out
to
analyze
if
the
differ-
ences
regarding
size
and
experience
were
statistically
significant.
Results
are
shown
in
Table
3.
ANOVA
results
show
that
the
responses
to
the
perception
of
pressures
are
statistically
different
among
the
auditors
in
the
dif-
ferent
firms.
Tukey’s
pairwise
comparison
was
used
to
determine
which
firm
categories
are
statistically
different
from
each
other.
The
result
of
the
test
(Table
3)
show
that
auditors
in
medium-sized
audit
firms
present
a
significantly
higher
(p
<
0.05)
perception
of
the
pressures
compared
to
the
auditors
in
small
firms
and
the
sole
practitioners.
Although,
previous
studies
(DeAngelo,
1981;
Paino
et
al.,
2012)
revealed
that
auditors
in
no
Big-four
firms
perceived
greater
pressures
than
auditors
in
the
Big-four
firms,
when
compar-
ing
medium
and
small
firms
this
study
suggests
that
the
auditors
in
medium-sized
firms
(the
biggest
in
our
sample)
are
the
ones
that
perceive
the
pressures
to
a
greater
extent.
Further,
results
show
(Table
3)
statistical
differences
on
the
per-
ception
of
pressures
among
the
more
and
the
less
experienced
auditors.
The
mean
scores
for
both
categories
show
that
auditors
with
less
experience
in
auditing
perceive
the
existence
of
pressures
to
a
greater
extent.
Additionally,
in
order
to
obtain
more
conclusive
results
we
have
considered
the
pressures
that
arise
within
the
company
and
the
pressures
from
the
client
separately.
The
variable
Pressures
from
the
firm
has
been
obtained
from
combining
the
responses
of
the
frequency
with
which
the
auditors
have
perceived
(i)
Pressures
to
perform
the
audit
work
in
less
time
than
you
would
need
to
carry
out
a
work
with
enough
quality,
(ii)
Pressures
from
superi-
ors
to
change
your
conclusions/opinions,
(iii)
Pressures
to
perform
an
audit
job
without
having
the
necessary
competence
and
(iv)
Pressures
to
underreport
time.
Cronbach’s
alpha
for
this
variable
is
0.84.
To
test
the
differences
between
groups
regarding
the
variable
Pressures
from
the
client,
a
Chi-square
test
was
conducted.
The
fre-
quency
with
which
the
auditors
have
perceived
Pressures
from
the
client
to
change
your
conclusions/opinions/audit
report,
measured
in
a
five-point
scale,
was
reduced
to
two
categories.
Individuals
who
responded
that
they
perceive
the
pressures
never
or
rarely
(one
or
two)
were
compared
to
those
who
responded
they
perceive
the
pressures
sometimes,
often
or
nearly
always
(three,
four
or
five
for
each
pressure).
ANOVA
results
for
the
differences
in
the
perception
of
Pressures
from
the
firm
and
the
Chi-square
tests
for
differences
in
the
percep-
tion
of
Pressures
from
the
client
are
presented
in
Table
4.
ANOVA
results
show
that
the
responses
to
the
perception
of
Pressures
from
the
firm
are
statistically
different
among
the
audi-
tors
in
the
different
firms.
The
result
of
the
Tukey’s
test
show
that
auditors
in
medium-sized
audit
firms
present
a
significantly
higher
(p
<
0.05)
perception
of
the
pressures
compared
to
the
auditors
in
small
firms
and
the
sole
practitioners.
The
results
of
the
present
study
are
in
line
with
other
studies
that
highlight
the
cost
versus
quality
pressures
that
arise
in
medium
sized
audit
firms
(Pierce
&
Sweeney,
2010).
Pierce
and
Sweeney
(2010)
found
that
audi-
tors
from
medium-sized
firms
perceived
the
highest
pressure
to
engage
in
unethical
behavior.
These
authors
attributed
this
result
to
the
fact
that
medium-sized
audit
firms
may
lack
the
support
structures
of
Big
4
for
decision-making
processes,
and
may
also
lack
the
individual
attention
that
characterizes
small
firms.
Further,
results
show
(Table
4)
statistical
differences
on
the
per-
ception
of
Pressures
from
the
firm
between
the
more
and
the
less
experienced
auditors,
being
the
auditors
with
less
experience
the
ones
that
perceive
the
existence
of
pressures
to
a
greater
extent.
Regarding
Pressures
from
the
client,
results
from
Table
3
reveal
that
the
auditors
in
medium-sized
audit
firms
feel
the
pressures
more
often
and
this
difference
is
statistically
different
at
the
0.1
level.
Unlike
other
studies
(Koch
et
al.,
2012;
Moreno
&
Bhattacharjee,
2003)
no
statistical
differences
were
found
in
the
perception
of
pressures
from
clients
to
change
the
auditor’s
con-
clusions
according
to
their
experience
in
auditing.
4.4.
Ethical
judgment
of
questionable
practices
The
second
part
of
the
questionnaire
refers
to
the
acceptabil-
ity,
from
an
ethical
point
of
view,
of
some
questionable
practices.
Respondents
had
to
indicate
the
extent
to
which
they
would
regard
nine
questionable
practices
as
ethical
on
a
five-point
Likert
scale,
where
1
is
unethical
and
5
is
ethical.
Table
5
shows
the
responses
obtained
and
the
mean
in
each
of
the
practices,
ranked
from
lowest
to
highest.

Please
cite
this
article
in
press
as:
Espinosa-Pike,
M.,
&
Barrainkua,
I.
An
exploratory
study
of
the
pressures
and
ethical
dilemmas
in
the
audit
conflict.
Revista
de
Contabilidad
–
Spanish
Accounting
Review
(2015).
http://dx.doi.org/10.1016/j.rcsar.2014.10.001
ARTICLE IN PRESS
G Model
RCSAR-47;
No.
of
Pages
11
M.
Espinosa-Pike,
I.
Barrainkua
/
Revista
de
Contabilidad
–
Spanish
Accounting
Review
xxx
(xx)
(2015)
xxx–xxx
7
Table
3
Mean
responses
and
ANOVA
results
for
Pressures.
Firm
size
Length
of
experience
Sole
practitioner
(n
=
29)
Small
firm
(n
=
62)
Medium-sized
firm
(n
=
18)
F-stat
1–10
years
(n
=
22)
More
than
10
years
(n
=
89)
F-stat
Mean
Mean
Mean
(p-value)
Mean
Mean
(p-value)
Pressures 1.60
1.78
2.32
5.924
2.17
1.74
6.394
(0.004***)
(0.013**)
** Significant
at
0.05
level.
*** Significant
at
0.01
level.
Table
4
Panel
A:
Mean
responses
and
ANOVA
results
for
Pressures
from
the
firm
Firm
size
Length
of
experience
Sole
practitioner
(n
=
29)
Small
firm
(n
=
62)
Medium-sized
firm
(n
=
18)
F-stat
1–10
years
(n
=
22)
More
than
10
years
(n
=
89)
F-stat
Mean
Mean
Mean
(p-value)
Mean
Mean
(p-value)
Pressures
from
the
firm 1.43
1.57
2.16
5.556
2.11
1.51
10.961
(0.005***)
(0.001***)
Panel
B:
Chi-square
tests
for
Pressures
from
the
client
Responses
Firm
size
Length
of
experience
Sole
practitioner
(n
=
29)
Small
(n
=
62)
Medium
(n
=
18)
X
<10
(n
=
22)
>10
(n
=
89)
X
(sig.)
(sig.)
Pressures
from
the
client 1
or
2
55%
35%
22%
5.773
45%
36%
0.616
3,
4
or
5
45%
65%
78%
(0.056*)
55%
64%
(0.432)
*Significant
at
0.1
level.
*** Significant
at
0.01
level.
As
can
be
seen
in
Table
5,
auditors
consider
all
the
exposed
situations
unethical.
However,
we
found
noteworthy
differences
between
the
issues
involved.
First,
it
should
be
noted
that,
among
respondents,
the
less
ethically
acceptable
practice
is
accepting
clients’
pressures
to
change
their
opinion.
Then,
the
second
and
third
place,
in
terms
of
the
less
ethical
practices,
are
performing
an
audit
in
a
circumstance
of
lack
of
independence
and
lack
of
technical
expertise.
Next,
setting
your
own
interest
above
the
public
interest
in
carrying
out
your
work
and
let
your
decisions
to
be
influenced
by
the
familiarity
with
the
audit
client,
are
placed
in
fourth
and
fifth
places.
Almost
all
respondents
(above
90%)
considered
these
practices
as
unethical.
Following
these
practices,
the
table
shows
a
number
of
prac-
tices
that,
although
they
are
considered
unethical,
are
less
rejected
among
auditors.
These
practices
are
related
to
accepting
the
pressures
from
your
superiors
to
change
your
conclusions,
per-
forming
an
audit
work
in
less
time
than
necessary
to
do
it
with
enough
quality,
letting
your
decisions
be
influenced,
excessively,
by
the
confidence
in
the
work
carried
out
by
others
and
finally,
under
reporting
of
time.
Clearly,
this
last
is
the
practice
that
generates
less
concern
among
respondents.
Previous
studies
(Sweeney
et
al.,
2010)
agree
that
the
auditors
do
not
recognize
the
ethical
implica-
tions
of
underreporting
of
time,
as
they
do
not
perceive
negative
consequences
of
this
practice.
The
results
suggest
that
Spanish
auditors
consider
less
accept-
able
from
an
ethical
standpoint
those
practices
that
are
explicitly
stated
in
the
legislation.
4.5.
Influence
of
audit
firm’s
size
and
length
of
experience
on
auditors’
ethical
judgment
Additional
analyses
were
performed
in
order
to
address
the
dif-
ferences
regarding
the
size
of
the
audit
firm
(RQ
5)
and
the
length
of
experience
of
the
auditors
in
the
sample
(RQ
6).
Principal
component
factor
analysis
was
used
to
test
the
dimen-
sionality
of
this
scale.
As
we
presume
that
the
factors
may
be
correlated,
an
oblique
rotation
(Promax
rotation)
was
employed.
The
results
reveal
2
factors
with
eigenvalues
greater
than
one.
All
items
loaded
above
0.5
in
each
factor
and
there
were
no
cross-
loadings
greater
than
0.4.
These
two
factors
explain
the
51%
of
the
variance.
The
first
factor
includes
the
practices
related
to
the
allo-
cation
of
resources
for
the
engagement
(statements
2,
3,
7
and
9
in
Table
5
Frequency
and
mean
of
the
ethical
acceptability
of
questionable
practices.
1
2
3
4
5
Mean
Unethical
Ethical
1.
Accept
pressures
of
the
client
company
to
change
your
conclusions/opinions/audit
report
75%
23%
2%
0%
0%
1.26
2.
Perform
an
audit
in
a
circumstance
of
lack
of
independence
73%
23%
2%
1%
1%
1.34
3.
Perform
an
audit
without
having
the
necessary
technical
competence
68%
28%
4%
0%
0%
1.36
4.
Set
your
own
interests
above
the
public
interest
in
carrying
out
your
work
60%
34%
4%
1%
1%
1.48
5.
Let
your
decisions
on
audit
work
be
influenced
by
familiarity
with
the
client
company
56%
41%
3%
0%
0%
1.48
6.
Accept
pressures
from
superiors
to
change
your
conclusions/opinions
56%
33%
10%
1%
0%
1.55
7.
Perform
the
audit
work
in
less
time
than
needed
to
carry
out
a
work
with
enough
quality
34%
53%
10%
1%
2%
1.83
8.
Let
your
decisions
on
audit
work
be
influenced,
excessively,
by
confidence
in
the
work
done
by
others.
24%
53%
22%
1%
0%
1.99
9.
Not
report
the
real
hours
worked
16%
35%
45%
2%
2%
2.38

Please
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M.,
&
Barrainkua,
I.
An
exploratory
study
of
the
pressures
and
ethical
dilemmas
in
the
audit
conflict.
Revista
de
Contabilidad
–
Spanish
Accounting
Review
(2015).
http://dx.doi.org/10.1016/j.rcsar.2014.10.001
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Spanish
Accounting
Review
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(xx)
(2015)
xxx–xxx
Table
6).
Therefore
we
named
this
factor
Ethical
Judgment
on
Cost
Constraints
Practices.
This
factor
explained
the
38%
of
the
variance
and
the
internal
reliability
measured
by
Cronbach
alpha
coeffi-
cient
is
0.77,
indicating
high
degree
of
reliability.
The
second
factor
includes
the
items
that
are
related
to
an
independent
and
reliable
audit
opinion
(1,
4,
5,
6
and
8).
We
named
this
factor
Ethical
Judg-
ment
on
Audit
Opinion
Practices.
This
factor
explained
the
12%
of
the
variance
and
the
internal
reliability
measured
by
Cronbach
alpha
coefficient
is
0.60.
ANOVA
tests
were
carried
out
to
analyze
the
influence
of
audit
firm’s
size
and
the
experience
on
the
ethical
judgment
of
ques-
tionable
practices.
Results
did
not
reveal
significant
differences
between
the
categories.
4.6.
Resolution
of
conflicts
of
interest
Finally,
in
order
to
determine
how
auditors
resolve
the
ethical
conflicts
faced
in
the
exercise
of
their
professional
activity,
respon-
dents
were
asked
about
the
importance
they
attach
to
a
number
of
factors
that
could
be
taken
into
consideration
in
the
resolution
of
ethical
conflicts.
The
respondents
had
to
rate
them
in
a
five-point
Likert
scale
(where
1
is
unimportant
and
5
is
very
important).
Firstly,
principal
component
factor
was
used
to
test
the
dimen-
sionality
of
this
scale.
The
factor
solution
with
Promax
rotation
revealed
4
factors
with
eigenvalues
greater
than
one
(Table
6).
All
items
loaded
above
0.5
in
each
factor
and
there
were
no
cross-
loadings
greater
than
0.4.
These
four
factors
explain
73%
of
the
variance.
The
first
factor
includes
the
items
that
reflect
the
impor-
tance
attached
to
the
professional
code
of
ethics
and
different
elements
from
within
the
organization,
such
as
the
ethics
code,
ethics
committee
or
superiors
and
peers.
We
named
this
factor
Organizational/Professional
regulation.
The
second
factor,
Reputa-
tion,
includes
the
items
that
reflect
the
importance
auditors
attach
to
the
loss
of
reputation
of
the
firm,
profession
and
the
auditors
themselves
when
they
face
an
ethical
conflict.
The
third
factor,
named
Legal
Regulation,
reflects
the
importance
attached
to
the
legal
norms
as
well
as
the
importance
attached
to
being
discov-
ered
committing
an
unethical
act.
Finally,
two
items
loaded
in
factor
four,
named
Family/Religion.
These
items
are
the
importance
attached
to
family
and
friends
and
the
importance
attached
to
religion.
Table
6
shows
descriptive
statistics
for
the
four
factors
obtained
and
the
mean
responses
for
the
individual
variables
considered
in
each
factor.
The
factors
are
ordered
from
the
highest
to
the
lowest
importance
given
by
respondents.
Pairwise
t-tests
revealed
that
the
mean
scores
for
the
four
fac-
tors
are
statistically
different
between
them.
The
results
(Table
6)
confirm
the
importance
that
auditors
grant
to
the
support
mechanism
of
the
firm
itself
when
ethical
decision
making.
In
fact,
the
results
show
that,
the
code
of
conduct
of
the
firm
is
the
main
factor
for
the
resolution
of
ethical
conflicts
and
in
addition,
the
respondents
granted
quite
a
lot
of
importance
to
the
ethics
committee
(2nd),
the
opinions
of
peers
(5th)
and
superiors
(6th).
These
results
are
consistent
with
the
thesis
put
forward
by
Lord
and
DeZoort
(2001)
that
highlighted
how
auditors
are
suscep-
tible
to
pressure
from
their
superiors
as,
in
their
decision
making,
their
prioritize
their
superiors’
favorable
assessment
even
know-
ing
that
the
decision
is
not
ethically
correct.
The
results
also
show
the
influence
that
peers
have
on
auditor
decisions.
Previous
studies
(McNair,
1991;
Ponemon,
1992)
have
referred
to
the
influence
that
members
of
the
same
rank
have
on
the
behavior
of
auditors.
The
Professional
Code
of
Ethics
loaded
in
this
same
factor
and
results
reveal
that
respondents
consider
it
a
relevant
factor
when
ethical
decision
making.
However,
as
it
can
be
observed
by
the
mean
responses,
auditors
place
more
importance
to
the
ethical
guidelines
of
the
firm
than
to
those
of
the
profession.
Loss
of
reputation
is
the
second
factor
considered
by
respon-
dents.
Accordingly,
results
suggest
that
auditors
are
aware
of
the
value
of
reputation
for
auditing
and
recon
the
impact
that
uneth-
ical
behavior
would
have
on
it.
This
finding
is
in
line
with
prior
research
that
revealed
that
Spanish
auditors
considered
that
pro-
moting
ethical
behavior
within
the
firm
was
a
crucial
factor
for
audit
firms’
reputation
(Martínez-León
&
Olmedo-Cifuentes,
2012).
Mean
responses
in
Table
6
reveal
that
the
concern
for
the
loss
of
reputation
for
the
professional
or
for
the
firm
is
greater
than
the
concern
for
the
loss
of
reputation
for
the
profession.
These
results
may
suggest
a
stronger
socialization
within
the
firm
than
within
the
profession.
Next
the
factor
considered
by
the
auditors
when
resolving
eth-
ical
conflicts
is
the
one
referring
to
legal
regulation.
Respondents
consider
legal
standards
of
most
importance
for
the
resolution
of
ethical
conflicts.
These
legal
standards
are
at
the
same
hierarchy
level
as
the
code
of
ethics
of
the
firm
(mean
response
4.03).
Auditors
in
the
Spanish
context
are
highly
influenced
by
the
legal
regulation
in
the
resolution
of
ethical
conflicts
as
this
has
been
basically
the
only
source
of
ethical
guidelines
in
the
professional
activity.
Also,
this
result
could
be
explained
by
the
fact
that
the
scarce
education
on
ethics
that
auditors
receive
in
Spain
has
always
referred
to
the
law
without
stressing
the
ethical
reasoning
or
the
core
principles
that
underlie
those
legal
standards
(Espinosa-Pike,
2001).
Although
auditors
are
highly
influenced
by
the
legal
regulation
in
the
resolu-
tion
of
ethical
conflicts
the
relatively
low
importance
attached
by
auditors
to
the
possibility
of
being
punished
or
discovered
results
in
this
factor
being
less
influential
than
the
firm
and
loss
of
repu-
tation.
An
explanation
for
the
relatively
low
importance
attached
to
being
punished
or
discovered
may
be
found
in
the
low
litigation
risk
perceived
by
the
Spanish
audit
market
(Cano
Rodriguez,
2007;
Carmona
Ibá˜
nez
&
Momparler
Pechuán,
2011;
García
Blandón
&
Argilés
Bosch,
2013;
Ruiz
Barbadillo,
Gómez
Aguilar,
&
Biedma
López,
2005).
Finally,
the
last
factor
in
terms
of
importance
in
the
resolution
of
ethical
conflicts
is
the
one
named
Family/Religion,
which
refers
to
religious
values
and
the
opinion
of
family
and
friends.
These
vari-
ables
are
clearly
influential
in
personal
ethical
decisions
non
related
to
the
workplace.
However,
these
factors
lose
their
importance
when
the
decisions
are
related
to
professional
or
work
context
(Bommer,
Gratto,
Gravander,
&
Tuttle,
1987).
Additionally,
in
order
to
analyze
the
different
responses
regarding
the
firm
size
and
the
experience
one-way
ANOVA
tests
were
carried
out
on
each
of
the
ethical
acceptability
factors.
ANOVA
test
results
did
not
reveal
significant
differences
in
the
ethical
acceptability
of
the
practices
by
the
size
of
the
firm
or
by
the
length
of
experience.
4.7.
Influence
of
ethical
judgment
and
the
way
of
resolving
the
conflicts
of
interest
on
auditors’
perception
of
pressures
Finally,
regression
models
have
been
used
to
test
for
the
com-
bined
effect
of
firm
size
and
experience,
as
well
as
to
test
the
influence
of
ethical
acceptability
and
the
factors
considered
when
ethical
decision
making
on
the
perception
of
pressures.
In
this
regard,
pressures
from
the
firm
and
pressures
from
the
client
have
been
analyzed
separately.
A
multiple
regression
model
has
been
carried
out
considering
the
dependent
variable
Pressures
from
the
firm.
The
model
(Table
7)
includes
as
independent
variables
the
size
of
the
firm,
auditor’s
experience
and
also
the
effect
of
the
ethical
acceptability
of
the
practices
and
the
factors
considered
in
ethical
decision
making.
The
multiple
regression
model,
which
is
significant
at
the
0.05
level
and
has
an
explanatory
power
of
0.211,
confirms
previous
results.
The
results
show
that
audit
firm
size
is
a
significant
vari-
able
(p
<
0.05)
for
the
case
of
medium
sized
audit
firms,
indicating

Please
cite
this
article
in
press
as:
Espinosa-Pike,
M.,
&
Barrainkua,
I.
An
exploratory
study
of
the
pressures
and
ethical
dilemmas
in
the
audit
conflict.
Revista
de
Contabilidad
–
Spanish
Accounting
Review
(2015).
http://dx.doi.org/10.1016/j.rcsar.2014.10.001
ARTICLE IN PRESS
G Model
RCSAR-47;
No.
of
Pages
11
M.
Espinosa-Pike,
I.
Barrainkua
/
Revista
de
Contabilidad
–
Spanish
Accounting
Review
xxx
(xx)
(2015)
xxx–xxx
9
Table
6
Factors
that
affect
ethical
decision
making.
Factors
Variables
Mean
(item)
Rank
Mean
(factor)
SD
%
variance
Cronbach
alpha
Organizational/professional
regulation
Code
of
ethics
of
your
firm
4.03
1
3.81 0.77 27% 0.83
The
recommendations
of
the
Ethics
Committee
of
your
firm
3.85
2
Professional
Code
of
Ethics
3.84
3
The
opinion
of
your
peers
in
your
same
professional
category
3.61
5
The
opinion
or
recommendations
of
your
superiors
3.6
6
Reputation
The
loss
of
reputation
for
the
professional,
in
the
case
of
being
caught
and/or
punished
3.69 4
3.43
1.20 24% 0.90
The
loss
of
reputation
for
the
firm
where
you
work,
in
the
case
of
being
caught
and/or
punished
3.52
7
The
loss
of
reputation
that
would
generate
for
the
profession
in
general,
in
the
case
of
being
caught
and/or
punished
3.1
8
Legal
regulation
Legal
Standards
4.03
1
3.16
1.01 12% 0.72
The
possibility
of
being
sanctioned
2.93
9
The
possibility
of
being
discovered
2.47
10
Family/religion The
opinion
of
friends
and
family
2.16
11 2.15
1.02 10% 0.56
Religious
values
2.14
12
Total
variance
explained
73%
Table
7
Multiple
regression
results
for
the
model
with
dependent
variable
Pressures
from
the
firm.
Independent
variable
ˇ
SE
Sig.
Individual
−1080
0.682
0.116
Medium-sized
firm
1944
0.802
0.017**
Experience
−1869
0.736
0.013**
Ethical
judgment
on
cost
constraints
practices
0.238
0.140
0.092*
Ethical
judgment
on
audit
opinion
practices
0.007
0.166
0.968
Organizational/professional
regulation
−0.674
0.364
0.067*
Reputation
−0.044
0.265
0.868
Legal
regulation
0.221
0.327
0.501
Family/religion
0.760
0.289
0.010**
Constant
8.045 2.637 0.166
F
4.157
p
value
0.000***
Adj.
R20.211
*Significant
at
the
0.1
level.
** Significant
at
0.05
level.
*** Significant
at
0.01
level.
that
auditors
in
medium
sized
firms
perceive
the
pressures
from
the
firm
to
a
greater
extent.
Experience
is
also
a
significant
variable
(p
<
0.05),
being
the
less
experienced
auditors
those
who
perceive
the
pressures
more
often.
Ethical
acceptability
of
the
practices
are
not
significant
at
the
0.05
level
explaining
the
perception
of
pressures.
With
respect
to
the
factors
auditors
consider
when
eth-
ical
decision
making,
regression
results
show
that
those
auditors
who
grant
more
importance
to
family,
friends
and
religious
values
perceive
the
existence
of
pressures
to
a
greater
extent.
The
variable
Pressures
from
the
client
was
tested
employing
a
logistic
regression
considering
as
the
dependent
variable
the
fre-
quency
with
which
the
respondents
have
perceived
pressures
from
the
client
to
change
the
conclusions/opinions/audit
report.
Regarding
the
logistic
regression
model
proposed,
with
the
dependent
variable
Pressures
from
the
firm
is
not
significant
explain-
ing
the
perception
of
pressures
from
the
client
(X2=
10.479;
p-value
=
0.313).
5.
Conclusions
The
present
study
analyzes
the
pressures
perceived
by
auditors
in
their
professional
activity.
Further,
it
explores
the
ethical
accept-
ability
of
questionable
practices
and
the
way
auditors
resolve
the
conflict
of
interest
they
are
confronted
with.
In
addition,
this
paper
studies
the
influence
of
the
size
of
the
audit
firm
and
auditors’
experience
on
the
issues
under
study.
The
results
of
this
exploratory
study
reveal
that
auditors
per-
ceive
the
existence
of
pressures
in
the
exercise
of
their
professional
activity.
Although
the
pressures
coming
from
the
audit
client
are
the
most
frequently
perceived,
the
results
also
show
the
existence
of
other
pressures
acknowledged
in
the
international
literature
but
that
had
not
been
displayed
explicitly
in
the
Spanish
context.
We
refer
to
those
that
come
from
the
audit
firm
and
that
arise
from
the
conflict
between
cost
and
quality.
Another
interesting
result
of
the
study
is
the
influence
of
audi-
tors’
length
of
experience
and
audit
firm’s
size
on
the
perception
of
pressures
that
arise
within
the
audit
firm.
In
this
sense,
less
experi-
enced
auditors
and
those
working
in
medium
sized
audit
firms
are
the
ones
that
perceive
the
pressures
to
a
greater
extent.
The
results
highlight
the
threats
for
dysfunctional
behavior
that
arise
particu-
larly
in
medium
sized
audit
firms
due
to
the
pressures
related
to
the
cost
versus
quality
conflict.
The
influence
of
auditors’
experi-
ence
on
the
perception
of
pressures
reveals
the
need
to
provide
enough
support
to
the
less
experienced
auditors
to
withstand
pressures.
The
response
auditors
give
to
the
pressures
received
may
depend
on
the
ethical
acceptability
of
practices
involved
as
well
as
on
the
reference
groups
taken
into
account
in
the
ethical
conflict
resolution.
The
results
reveal
the
strong
influence
of
the
firm
itself
and
the
legal
regulation
on
the
way
of
resolving
the
ethical
conflicts.
These
findings
seem
to
reflect
a
strong
socialization
within
firms.
This
study
contributes
to
the
international
academic
literature
on
auditing
behavior
as
it
provides
new
empirical
data
about
a
broader
set
of
pressures
than
the
previously
studied
that
could
also
have
a
detrimental
effect
for
the
audit
quality.

Please
cite
this
article
in
press
as:
Espinosa-Pike,
M.,
&
Barrainkua,
I.
An
exploratory
study
of
the
pressures
and
ethical
dilemmas
in
the
audit
conflict.
Revista
de
Contabilidad
–
Spanish
Accounting
Review
(2015).
http://dx.doi.org/10.1016/j.rcsar.2014.10.001
ARTICLE IN PRESS
G Model
RCSAR-47;
No.
of
Pages
11
10
M.
Espinosa-Pike,
I.
Barrainkua
/
Revista
de
Contabilidad
–
Spanish
Accounting
Review
xxx
(xx)
(2015)
xxx–xxx
The
current
audit
regulation
at
national
as
well
as
interna-
tional
level
has
focused
mainly
on
the
development
of
guidance
for
auditors
to
withstand
pressures
from
clients,
and
conversely,
has
granted
less
attention
to
the
pressures
auditors
face
from
within
the
audit
firm.
The
new
insights
provided
by
this
study
about
the
pressures
and
the
conflicts
of
interests
faced
by
auditors
in
their
professional
activity
enables
public
and
professional
regulators
to
develop
effective
measures
to
improve
audit
quality.
Moreover,
as
auditors
in
the
sample
consider
more
ethically
acceptable
yielding
to
the
pressures
from
the
firm
than
to
the
pressures
from
the
client,
and
given
that
auditors’
acceptability
of
these
questionable
practices
might
contribute
to
a
higher
com-
mission
of
the
same,
increasing
the
awareness
of
a
broader
set
of
conflicts
of
interest
will
help
prevent
the
possibility
of
committing
these
questionable
practices.
Further,
as
suggested
by
the
study,
the
auditors
are
highly
social-
ized
within
the
audits
firms
and
therefore
the
likelihood
that
these
pressures
will
affect
auditors’
behavior
is
greater.
The
problem
is
further
exacerbated
if
the
firm’s
ethical
culture
is
not
in
line
with
that
demanded
by
society.
In
this
sense,
as
long
as
the
question-
able
practices
are
not
regulated
by
law,
auditors
will
resolve
the
conflict
prioritizing
the
interest
of
the
firm
above
public
interest.
Therefore,
as
the
organizational
environment
is
a
highly
influential
factor
in
auditors’
behavior,
we
should
consider
the
benefits
that
strengthening
the
ethical
culture
in
the
audit
firms
may
involve
for
the
audit
quality.
The
results
reveal
also
important
implications
for
the
Span-
ish
auditing
professional
organizations.
The
weak
influence
of
the
profession
on
auditors’
behavior
invites
reflection,
as
the
imple-
mentation
and
strengthening
of
the
ethical
standards
will
require
of
the
leadership
that
only
an
influential
professional
body
can
carry
out.
One
of
the
strengths
of
this
study
is
that
it
has
been
conducted
among
experienced
Spanish
auditors,
as
this
is
generally
a
pop-
ulation
difficult
to
access.
Moreover,
by
providing
evidence
of
the
actual
pressures
that
Spanish
auditors
face,
this
paper
extends
prior
research
regarding
the
organizational
context
in
which
the
audit
work
takes
place.
Furthermore,
in
the
Spanish
context
the
results
obtained
in
this
work
are
timely
and
relevant
for
the
design
of
the
ethical
standards
that
are
currently
in
development.
For
these
rules
to
be
useful
in
ensuring
the
ethical
behavior
of
auditors,
they
need
to
take
into
account
the
pressures
perceived
by
auditors
and
take
into
consid-
eration
the
way
in
which
they
face
conflicts
of
interests
and
resolve
them.
6.
Limitations
and
future
research
While
the
sample
under
analysis
presents
research
opportuni-
ties
in
Spain,
the
pressures
undergoing
auditors
may
be
conditioned
by
the
type
of
firm.
The
questionnaire
was
sent
only
to
auditors
members
of
REA
(Registro
de
Economistas
Auditores)
leaving
aside
auditors
of
the
other
professional
associations
in
Spain.
Therefore,
the
fact
that
this
professional
corporation
is
mainly
comprised
by
sole
practitioners,
small
and
medium
sized
audit
firms
can
influ-
ence
the
results
of
the
present
study.
Another
limitation
of
this
study
is
that,
although
several
measures
were
taken
to
mitigate
social
desirability
problem
(i.e.
ensuring
anonymity
and
on-line
survey
addressed
directly
to
the
authors)
auditors
may
have
answered
in
a
socially
desirable
way
and
the
results
might
be
affected
by
this
bias.
In
addition,
future
research
should
consider
the
possibility
of
extending
the
test
sample
including
professionals
in
all
positions
in
the
audit
firms
as
well
as
professionals
in
large
audit
firms.
Besides,
this
exploratory
study
raises
new
research
questions,
such
as
the
influence
of
country’s
cultural
values
in
the
auditor’s
ethical
acceptability
of
questionable
practices
and
in
the
way
of
resolv-
ing
conflicts
of
interests.
This
study
has
also
highlighted
the
need
for
further
research
on
the
complex
organizational
context
of
audit
firms.
In
this
regard,
additional
research
on
the
consequences
of
the
cost/quality
conflict
within
the
audit
firms
as
well
as
on
the
auditors’
behavioral
patterns
to
cope
with
this
conflict
should
be
considered.
Conflict
of
interest
The
authors
declare
no
conflict
of
interest.
Acknowledgements
The
authors
are
grateful
to
the
Registro
de
Economistas
Audi-
tores
(REA)
for
their
invaluable
support
in
conducting
this
research
and
to
the
anonymous
referees
for
their
helpful
comments
and
suggestions.
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An
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of
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pressures
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ethical
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audit
conflict.
Revista
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Contabilidad
–
Spanish
Accounting
Review
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ARTICLE IN PRESS
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RCSAR-47;
No.
of
Pages
11
M.
Espinosa-Pike,
I.
Barrainkua
/
Revista
de
Contabilidad
–
Spanish
Accounting
Review
xxx
(xx)
(2015)
xxx–xxx
11
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