Theresa Libby
Wilfrid Laurier University
Abstract: The increasing complexity of financial transactions and recent audit debacles indicate the necessity of auditors' virtue. We develop an empirical measure of auditors' virtue to facilitate our understanding of the factors associated with auditors' virtue and the ways in which virtue can be encourged in auditors. To validate the measure, we survey over 400 Canadian chartered accountants. Exploratory factor analysis of the results of the survey suggests the reliability of the measure. Confirmatory factor analysis techniques indicate the auditors' virtue latent construct can be meaningfully divided into five dimensions consistent with the theoretical derivation proposed by Libby and Thorne (2003). Further testing establishes the convergent and discriminant validity of the measure. Finally, our structural analysis demonstrates that the five dimensions of virtue, as proposed by Libby and Thorne, affect professional outcomes (e.g., professional commitment and respondents' willingness to engage in extra-role professional behaviors) as expected.
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