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National differences in the demand for voluntary external audits have been linked to multiple factors, such as differences in a country's rate of growth, access to external credit, and institutional quality. Audits, however, also have a psychological cost, whose intensity is genetically and culturally hereditary. Using a sample of 3,072 private firms across 34 industries in seven countries, including five countries or regions from the former Soviet Comecon, we find that a country's share of firms choosing to undergo external audits is negatively related to the prevalence of carriers of the G allele in the mu-opioid receptor gene's A118G polymorphism, also known as the “social sensitivity” gene. Furthermore, the relationship between the prevalence of the social sensitivity gene and audits is fully mediated by a national culture's degree of collectivism. The results are statistically and economically highly significant and remain robust to the introduction of a set of confounding factors at the firm and country levels. Our results have practical relevance in recognizing psychological diversity when conducting audits and, more generally, preventing burnout in the workplace.

The purpose of this paper is to address the impact of ethical culture on audit quality under conditions of time budget pressure. The study also tests the relationship between ethical culture and time budget pressure.

The study is based on a field survey of financial auditors employed by audit firms operating in Sweden.

The study finds relationships between three ethical culture factors and reduced audit quality acts. The ethical environment and the use of penalties to enforce ethical norms are negatively related to reduced audit quality acts, whereas the demand for obedience to authorities is positively related to reduced audit quality acts. Underreporting of time is not related to ethical culture, but is positively related to time budget pressure. Finally, the study finds a relationship between two ethical culture factors and time budget pressure, indicating a possible causal relationship, but ethical culture does not mediate an indirect effect of time budget pressure on reduced audit quality acts.

This is the first study to report the effect of ethical culture on dysfunctional auditor behavior using actual self‐reported frequencies of reduced audit quality acts and underreporting of time as data.

This paper aims to report the results of a cross‐national cultural experiment on auditors' belief revision when evaluating internal control.

Hogarth and Einhorn's belief‐adjustment model (BAM) and Hofstede's national culture are employed. Two experimental conditions, created by crossing two levels of audit information: initial (un)favourable (UNFAV‐MODFAV) FAV‐MODFAV information, each followed by additional moderately favourable audit evidence and two levels of national culture dimensions of individualism (Australian auditors) and collectivism (Taiwanese auditors).

Consistent with BAM, the results of the experiment confirm that the evaluation task of internal control is an additive process. Collectivist culture auditors are found to revise their beliefs significantly upwards when encountering UNFAV‐MODFAV compared with FAV‐MODFAV, but not for individualist culture auditors. Collectivist culture auditors also revise their beliefs significantly upwards when they encounter UNFAV‐MODFAV compared with individualist culture auditors who do not revise their beliefs significantly upwards. However, neither collectivist nor individualist culture auditors revise their beliefs significantly upwards when encountering FAV‐MODFAV. Here, the multivariate regression shows that collectivist (individualist) culture auditors are (are not) concerned with “painting a good picture” to keep the client happy.

With globalisation, the national culture effect makes an important contribution to the disclosure of financial reporting. The findings of the research show that, in evaluating the internal control of an audit client, collectivist culture auditors revise their beliefs more favourably when encountering additional audit evidence which is relatively favourable (UNFAV‐MODFAV) compared with individualist culture auditors. In practice, the implications on auditors' reporting of the internal control (for example, Section 404 of the Sarbanes Oxley Act 2002) regulator need to take into consideration that the national culture of auditors is an important input in assessing control risk. In bridging the gap between research and practice, an urgent need has to be addressed, as it may impair the effectiveness of the audit. The collective culture auditor's concern to keep the client happy may be construed as not being independent.

The paper is the first to employ the BAM and Hofstede's national culture to test auditors of different national cultures in their belief revisions when evaluating the client's internal control.

The primary purpose of this exploratory paper is to propose a novel analytical framework for examining corruption from a behavioral perspective by highlighting multiple issues associated with quantification culture.

This paper is part of the author’s exploratory study into the complex corruption phenomenon in Indonesia from a variety of viewpoints to obtain a better understanding of its nature and dynamics. By building on previous literature on quantification culture, audit culture and the corruption phenomenon, this paper explores the different issues related to overreliance on numbers and how they may have led to increased corruption, particularly in Indonesia. Using the Fraud Decision Scale framework, this paper also demonstrates how the quantification culture affects the cost-benefit analysis of corruption offenders. To develop the best anticorruption strategy and lay the groundwork for future anticorruption studies, this paper presents a fresh perspective on how to analyze and evaluate the corruption issue.

The author established that despite the benefits that quantification practices – such as indicators, scores, ratings and rankings – bring to societies and organizations, there is evidence that these practices can have unfavorable effects when used excessively or incorrectly. One of the adverse effects of quantification practices is over-quantification, which manifests as various inappropriate behaviors, including an excessive desire to acquire riches and material belongings. Additionally, the worship of ranks and status derived from quantitative evaluation processes has led many people to prioritize short-term objectives above long-term improvements. Eventually, these will cause organizations to lose productivity and make them susceptible to fraud and corruption. Future studies are needed to determine the most effective approach for mitigating over-quantification issues. In this exploratory paper, the author proposes balancing quantitative practices with qualitative knowledge to gradually alter people’s behavior by broadening their perspectives in perceiving various phenomena in the world, not only by describing and explaining them but also by comprehending their underlying meanings.

This exploratory study is self-funded and relies primarily on documentary analysis to explore the corruption phenomenon in Indonesia. Future studies will benefit from in-depth interviews with former corruption offenders and investigators.

This exploratory paper contributes to the development of a sound corruption prevention approach by presenting a novel analytical framework for examining various behavioral problems linked with quantification culture that may lead to the escalation of corruption.

This study emphasizes the significance of understanding the structure and dynamics of quantification culture and their negative behavioral impacts on people to comprehend the corruption phenomenon better.

This study aims to examine whether accountability and culture have an impact on auditors’ professional scepticism. It also examines whether culture moderates the effect of accountability on auditors’ professional scepticism.

Three of the Big 4 firms in Australia and Egypt participated in an audit judgement experiment, which required them to indicate their beliefs about the risk of fraud and error at the planning stage of a hypothetical audit and evaluate the truthfulness of explanations provided by the client management. The authors examined whether their professional scepticism was influenced by accountability.

The results indicate professional scepticism differs significantly between cultures in some situations. The fact that culture influences scepticism suggests that even when auditors use the same standards (such as ISA 240 and ISA 600), they are likely to be applied inconsistently, even within the same firm. The authors, therefore, recommend that international bodies issue additional guidance on cultural values and consider these cultural differences when designing or adopting auditing standards.

To the best of the authors’ knowledge, this is the first study that examines whether culture moderates the impact of accountability on auditors’ professional scepticism using Egyptian and Australian (Middle Eastern and Western) auditors. Prior literature suggests that individuals subject to accountability pressure increase their cognitive effort and vigilance to detect fraud and error. As the authors find evidence that culture moderates accountability pressure and as accountability affects scepticism, they add to the literature suggesting that culture can influence professional scepticism.

This study explores auditors’ professional attitudes and behaviours. It tests the influence of public interest commitment, independence enforcement beliefs and organisational ethical culture on auditors’ acceptance of and engagement in practices that compromise their objectivity. The study is based on survey responses of 122 Spanish auditors. To analyse the combined effect of the variables under study, variance-based structural equation modelling (partial least squares, PLS) was employed. The results suggest that the regulatory efforts to improve auditors’ behaviours by enforcing independence rules have been internalised by auditors. The results also reinforce the need to instil the societal responsibilities of professional auditors, since auditors’ public interest commitment is related to their ethical decision making. Furthermore, this study reveals that firms’ ethical cultures influence auditors’ commitment to the public interest, as well as their ethical decision making. The study raises practical implications for auditing professionals, regulators and audit firms. Understanding auditors’ beliefs and behavioural patterns is critical to proposing mechanisms that enhance their ethical behaviours, which could ultimately enhance audit quality. The chapter contributes to the field by analysing the combined effect of the regulatory framework and organisational context on auditors’ professional values and behaviours.

New Zealand and Australian agri-food industries are being restructured both as a consequence of the extension of neoliberal policy settings and as a result of the increasing influence of the global supermarket sector. In the EU, supermarkets have sought to standardise and harmonise compliance, with their influence being felt well beyond European boundaries. EurepGAP (a European standard for ‘Good Agricultural Practices’) is an example of an emerging ‘audit culture’ where strict adherence to set rules of operation emerges as the basis for accreditation of goods and services. It represents the trend towards private sector standardization and assurance schemes, and provides an example of the growing importance of the supermarket sector in sanctioning the on-ground activities that occur in the production and processing of farm-derived outputs.

This chapter highlights the influence of EurepGAP protocols in the reorganisation of the agri-food industries of New Zealand and Australia. It argues that – for industries such as vegetable and fruit production, where Europe is the final destination – compliance with EurepGAP standards has largely become essential. In this sense, EurepGAP has emerged as the standard among producers who wish to export their products. The chapter concludes with an assessment of EurepGAP as a form of global agri-food governance that demonstrates a strong relationship between new audit cultures and neoliberal forms of trade regulation. In both Australia and New Zealand, some production sectors have rapidly adopted EurepGAP – despite extra costs, reduced choices over crop management and a lingering sense of resentment at the internal imposition of yet another production audit – primarily as a solution to the politics of risk in the context of high levels of exposure to market requirements under neoliberalism. The implications of this for Antipodean farming are considered in detail.

The purpose of this study is to examine the impact of Confucianism on auditor changes by highlighting the role of the cultural embeddedness mechanism in audit contracts from the perspective of credit governance.

Using a unique sample of Chinese A-share listed firms from 2008 to 2018, this study uses logit regression as the baseline methodology while controlling for macro-level factors and firm-level characteristics, as well as industry and year fixed effects. This study also conducts different mediation/channel analyses, endogeneity tests (using two-stage least squares and difference-in-differences techniques) and robustness checks.

The findings show that the embeddedness of Confucianism in a corporation reduces auditor changes. Furthermore, the channel analyses (using moral self-discipline, social trust, professional ethics and the quality of accounting information as four potential channels) reveal that Confucianism can improve moral credit and consolidate the cultural foundation of credit governance. Specifically, the stronger the embeddedness of Confucianism, the more stable the auditing contract. Finally, Confucianism in formal and informal systems can be mutually substituted.

There is limited research on how culture affects auditing contracts. This study offers new contributions and extends the literature on the connection between cultural embeddedness and contract stability. Confucianism has the potential to strengthen the efficiency of credit governance and maintain the stability of contracts. This study offers a thoughtful orientation toward duly using Confucianism vis-à-vis credit governance.

A psychological contract (PC) reflects the relationship(s) between employees and their employers and involves a personal interpretation of the obligations and rewards between those parties. Within the auditing profession, while the actual “employers” of auditors are the auditing firms that pay the auditor’s salary, auditors engage in multiple functionally interdependent affiliations in which PCs are developed: auditor to auditor; auditor to the profession and its overseers; and auditors to the company being audited. Unfortunately, another party (society), which should be viewed as a critical part of the audit relationship, is often ignored. This paper poses the idea that the PCs existing between employees within auditing firms and between auditing firms and external parties may be important, but less recognized, underlying causes of the profession’s problems. Current auditor PCs appear to be internally contradictory and out-of-sync with the demands of the investing public and society in general. Suggestions are made about how PCs and relationships may be modified to be more attune to societal needs.

The purpose of this paper is to provide evidence on underreporting of time (URT) by audit partners and the factors that drive URT at their level. In particular the study tests the relationship between URT and the following variables: pressures perceived by auditors related to audit budgets, the ethical acceptability of URT, the influence of peers and superiors on the resolution of ethical conflicts, and organisational ethical culture. A deeper analysis of URT practices is necessary, as failing to correctly report the total hours worked by audit partners poses a threat to audit quality, and can have a detrimental effect on individual auditors, audit firms, and even the auditing profession itself.

A multiple regression data analysis was conducted, based on 84 responses from Spanish audit partners working in small- and medium-sized audit firms.

The results reveal that URT is affected by the pressures perceived by auditors related to audit budgets, the ethical acceptability of URT, and the influence of peers and superiors on the resolution of ethical conflicts.

This study contributes to international literature on the organisational context of audit firms by analysing URT from the perspective of audit partners. It also has practical implications, as it focuses on understanding the beliefs and behavioural patterns of audit partners, which is critical to proposing mechanisms for avoiding dysfunctional behaviour at all levels of audit firms.