Underreporting and premature sign‐off in public accounting

Abstract

This study uses the ethical decision‐making model to examine underreporting and premature audit sign‐off in public accounting. Structural equation modelling results indicate that accountants view premature sign‐off activities differently from underreporting activities. For example, those accountants who use a teleological moral evaluation process, and who perceive a greater likelihood of reward are more likely to underreport. That these variables are not significantly related to the likelihood of premature sign‐off suggests that accountants may use a consequences‐based approach when making decisions having lesser ethical content (like underreporting), but employ a different decision process when faced with decisions having greater ethical content (like whether to prematurely sign‐off). The results also suggest that supervisors and managers are less likely to underreport, and to prematurely sign‐off, than senior and staff‐level accountants, and that accountants with an internal locus of control are less likely (than externals) to either underreport or prematurely sign‐off.

Citation

Shapeero, M., Chye Koh, H. and Killough, L.N. (2003), "Underreporting and premature sign‐off in public accounting", Managerial Auditing Journal, Vol. 18 No. 6/7, pp. 478-489. https://doi.org/10.1108/02686900310482623