Dysfunctional Auditor Behavior: The Effects of Tone at the Top and Supervisors’ Relationships

Abstract

This study examines the influence of firm management’s ethical “tone at the top” (tone) and the working relationship of an auditor with his/her supervisor (senior) on the auditor’s propensity to engage in an unethical, dysfunctional auditor behavior (DAB). Findings indicate that environmental factors influence the staff auditor’s decision of whether or not to follow a course of action suggested by the supervisor that is contrary to both the audit program and generally accepted auditing standards (GAAS). Specifically, auditors are influenced by the tone that the partner sets for the firm and by the working relationship that the staff auditor has with the supervising senior auditor. The results of this research have ramifications for the auditing profession, as they identify specific factors outside of auditing standards and beyond an auditor’s moral reasoning capabilities that can influence the acceptance of unethical, dysfunctional behavior.

Citation

Tervo, W., Smith, L.M. and Pitman, M. (2014), "Dysfunctional Auditor Behavior: The Effects of Tone at the Top and Supervisors’ Relationships", Research on Professional Responsibility and Ethics in Accounting (Research on Professional Responsibility and Ethics in Accounting, Vol. 17), Emerald Group Publishing Limited, Leeds, pp. 47-77. https://doi.org/10.1108/S1574-0765(2013)000017005