Structural Equation Modeling Habits of Highly Effective Moral Courage for Trust of Certified Public Accountants

Abstract

The auditor’s report is obtained through the audit process, and investors and users of the financial statements demand that the auditor’s report provides relevant information. The development of the auditor’s report is essential to keep the audit profession relevant and be beneficial to the user. Emphasizing the benefits of the financial statements requires information that can be used to make effective decisions within the confidence of the management through the trust of certified public accountants, based on working successfully and ethics in the accounting profession. Hence, the purposes of this research were firstly, to determine the structural equation model habits of highly effective moral courage towards administering the trust, and secondly, to study the relationship structure of personality to work successfully and having moral courage to administer the trust of the certified public accountant. Quantitative studies were done in the form of a structural equation model. The data collection period is January-June 2016 and the sample data set consisted of 307 certified public accountants, which was analysed using a statistical package for social science. The results showed that the structural equation model indicate habits of highly effective moral courage to administer the trust of the CPA and were consistent with the empirical data as a measure of consistency. The trait of “working successfully”, descending by weight of the composition, are: 1. recognizing benefits to others, 2. priority of the task, 3. character to know and choose what is useful, and 4. being selective and clear. Factors affecting the “moral courage”, sorted by descending weight element, are: 1. transparency, 2. independence, 3. loyalty, 4. knowledge and skill, 5. confidentiality, and equity. The contributing factors to the “trust administration”, in descending order, are: 1. confidence in their abilities, and 2. trust in the CPAs. At the same time, the administrations of the trust and moral courage all have direct influences with each other. The weight of trust administration has more influences over moral courage than by moral courage impacts on the trust administration. Therefore, the focus should be on developing a certified public accountant to have a successful character. Including in the development of certified public accountants to be a good and capable, emphasis should be also on both trust management and ethical courage.