The copycat effect: do social influences allow peer team members' dysfunctional audit behaviors to spread throughout the audit team?

Abstract

Purpose

This study seeks to identify the role that peer team members' behaviors and superiors' preferences play in influencing the likelihood that staff auditors engage in dysfunctional audit behavior (DAB).

Design/methodology/approach

This study uses an experiment that manipulates peer team member behavior (DAB present or DAB absent) and superior preference (efficiency or effectiveness). Students enrolled in a graduate accounting course, proxying for inexperienced staff auditors, receive an internal control sample selection task. Participants assess the likelihood that a typical staff auditor would engage in DAB or non-DAB.

Findings

First, staff auditors with a peer team member who engages in DAB are more likely to engage in DAB. Second, staff auditors who have a superior with a preference toward efficiency are more likely to engage in DAB. Finally, when considered simultaneously, the effect of the superior's preference on the likelihood of staff auditors engaging in DAB is not different for staff auditors, subject to a peer engaging in DAB versus those subject to a peer who engaged in a non-DAB.

Research limitations/implications

This study uses a hypothetical audit team, a written script of team member communication, and students proxying for inexperienced staff auditors. As such, future studies might consider improving the realism of the team setting, the manner in which a message is portrayed, and implications at higher levels within the audit team hierarchy.

Practical implications

Team interactions contribute to the prevalence of DAB within the profession. Specifically, inexperienced auditors are influenced by the behavior of peer and superior team members and this may be one cause of the prevalence of DAB within the profession. As such, future firm considerations could include well-structured mentorship programs and rewards structures.

Originality/value

This study adds to the audit team literature by investigating the influence of audit team dynamics on staff auditors' behaviors. This paper extends the current audit team literature, that is mostly focused on supervisor–subordinate relationships, by investigating social influences from peers and superiors. This study's findings inform public accounting firms of areas in which personnel may negatively affect audit quality through intra-team interactions.

Citation

Wetmiller, R.J. (2022), "The copycat effect: do social influences allow peer team members' dysfunctional audit behaviors to spread throughout the audit team?", Journal of Applied Accounting Research, Vol. 23 No. 2, pp. 362-380. https://doi.org/10.1108/JAAR-12-2020-0232