The effect of religiosity–morality interaction on auditor independence in Egypt

This paper aims to examine the effect of religiosity on the degree of auditor independence given the significance of symbolic gestures constructed by client economic conditions in different situations before and after considering the degree of auditors’ moral development.

The paper uses an experimental design based on running mixed factorial analysis of variance (SPANOVA) using mainly repeated measures GLM to test the interaction effects between (and within) variables on auditor independence.

The main findings indicate that there is a significant interactional effect between the degree of moral development and intrinsic religiosity on the degree of auditor independence, given the stimulating effect of the client’s economic gestures/conditions.

The Egyptian economy is growing and ensuring that auditor independence is paramount to sustaining the local, as well as foreign investors’ interest. Hence, this study is very important in highlighting factors that might lead to some impairment of auditors’ independence.

To the best of the authors’ knowledge, this study is the first to test the interactional effect between the religious orientation rather than religious affiliation and moral development on the degree of auditor independence, such a relationship has not been tested before in the literature. Additionally and most importantly, it uses statistical measurement through its experimental design, as there is a lack of studies in terms of auditor independence in Egypt. The existing literature follows the perceptional assessment rather than the real measurement of the degree of auditor independence.