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Book part
Publication date: 3 May 2018

Itsaso Barrainkua and Marcela Espinosa-Pike

This study explores auditors’ professional attitudes and behaviours. It tests the influence of public interest commitment, independence enforcement beliefs and…

Abstract

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 auditorsbehaviours 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.

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Research on Professional Responsibility and Ethics in Accounting
Type: Book
ISBN: 978-1-78754-973-9

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Article
Publication date: 26 July 2013

Desmond C.Y. Yuen, Philip K.F. Law, Chan Lu and Jie Qi Guan

The purpose of the study is to investigate the factors that may result in a high turnover rate of auditors in Macau. The factors considered include client importance, task…

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Abstract

Purpose

The purpose of the study is to investigate the factors that may result in a high turnover rate of auditors in Macau. The factors considered include client importance, task complexity, time budget constraints, auditor independence and acceptance of dysfunctional behaviour by Macau's audit firms.

Design/methodology/approach

This study involved three stages. In the first stage, interviews were carried out with auditors from Big‐4 (seven interviewees) and local non‐Big‐4 firms (three interviewees) in Macau to investigate the reasons for the high turnover rate amongst auditors in Macau. They were asked to speculate about common explanatory factors. The second stage involved 141 auditors from Big‐4 and local non‐Big‐4 accounting firms who were asked to complete a questionnaire survey for the explanatory factors. A total of 135 usable questionnaires were included in the multiple regression data analysis. The third stage of research comprised follow‐up interviews aimed at learning more about the reasons for dysfunctional behaviour.

Findings

This research provides valuable information for audit firms in Macau and will potentially help them to reduce their turnover rate and identify the factors affecting dysfunctional behaviour amongst auditors. The results extend the literature by focusing on the effect of perceived responsibility on professional responses to time budget pressures, task complexity, pressure from clients, and professional and ethical issues.

Practical implications

The challenge facing auditors today is to expand their auditing practices and evolve standards for adequately monitoring the operations of business entities. The current high turnover rate alarms audit firms, which are concerned with training and the provision of sufficient resources to solve the problems that auditors face in the workplace.

Originality/value

This is the first paper to examine the reason for turnover intentions in Macau. This study sheds light on the factors that contribute to individual auditor differences in the acceptance of dysfunctional behaviour that may result from the stressful nature of their duties.

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Article
Publication date: 1 November 2006

Breda Sweeney and Bernard Pierce

The aim of the research is to investigate, using a field survey, the concept of underreporting of time (URT), from both an individual and organisational perspective as a…

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3932

Abstract

Purpose

The aim of the research is to investigate, using a field survey, the concept of underreporting of time (URT), from both an individual and organisational perspective as a defence mechanism for coping with time budget pressure.

Design/methodology/approach

Big Four audit partners and seniors are interviewed regarding the factors that motivate staff auditors to engage in manipulation of time records and the consequences of the behaviour for individual auditors and audit firms.

Findings

Findings indicate that time record manipulation is not a single type of activity as suggested previously, but includes a variety of behaviours, six of which are identified in the study. Each of these constitutes a very different type of defence mechanism, motivated by different influences and resulting in different outcomes for the individual and the organisation. The firms engage in a defence mechanism characterised by a series of mixed messages to avoid dealing with inherent cost/quality conflicts and elements of this mechanism become embedded in routine activities at different levels in the firms.

Research limitations/implications

The implications for audit firms vary with the type of time record manipulation and future research therefore needs to concentrate on a closer examination of the various practices that make up URT as identified in this study.

Originality/value

The insights provided by the research are used to explain apparently conflicting arguments in the literature and to set out implications for research and practice.

Details

Accounting, Auditing & Accountability Journal, vol. 19 no. 6
Type: Research Article
ISSN: 0951-3574

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Article
Publication date: 12 August 2021

Rebecca J Wetmiller

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…

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.

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Journal of Applied Accounting Research, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0967-5426

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Article
Publication date: 1 March 1996

David T. Otley and Bernard J. Pierce

Research suggests that dysfunctional behaviour by auditors may be related to the perceived tightness of time budgets. Using data collected from practising auditors

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5302

Abstract

Research suggests that dysfunctional behaviour by auditors may be related to the perceived tightness of time budgets. Using data collected from practising auditors, examines the nature of such a relationship. Found that the frequency of dysfunctional behaviour increased sharply as budgets were seen to approach unattainable levels of performance. Recognizing the importance of auditors’ perceptions regarding the attainability of budgets, examines antecedent variables affecting budget attainability. Found that the influence of client fee expectations, the level of audit senior participation and the influence of the audit programme were significant influences. Discusses implications for practice and possibilities for future research.

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Accounting, Auditing & Accountability Journal, vol. 9 no. 1
Type: Research Article
ISSN: 0951-3574

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Article
Publication date: 26 July 2019

Rabih Nehme, Christelle AlKhoury and Abdullah Al Mutawa

The purpose of this paper is to identify differences in auditors’ dysfunctional behaviour when expecting performance appraisal. Its main aim is to examine variances across…

Abstract

Purpose

The purpose of this paper is to identify differences in auditors’ dysfunctional behaviour when expecting performance appraisal. Its main aim is to examine variances across countries; UK vs Kuwait. Also, it identifies differences between experienced and inexperienced auditors.

Design/methodology/approach

The paper focuses on dysfunctional audit behaviour (DAB) where premature sign-off and under-reporting of chargeable time are chosen as the two main signalling proxies. A survey made up of statements included in performance appraisal templates is distributed among auditors working for the Big Four firms in both, the UK and Kuwait.

Findings

The paper shows how performance evaluation of external auditors affects their behaviour in the workplace. From a cultural standpoint, assessing the performance of auditors whilst working in a competitive market in a developed country is regarded as a potential driver for DAB variations. Evaluating auditors’ performance in a developing country is seen as a stabiliser of DAB. This research paper demonstrates that experienced auditors have a greater tendency to behave dysfunctionally as compared to inexperienced auditors.

Originality/value

Prior studies have been conducted to assess auditors’ performance through using internal and external attributes (Kaplan, 1985), offshoring basic steps of audit work (Downey, 2018), and the perception of audit clients about auditors’ performance (Reheul et al., 2013). Such studies were conducted mostly on developed countries on a standalone basis. In this study, the focus has been shifted from focusing on one country to comparing two different countries. The paper examines DAB between experienced and inexperienced auditors in the UK and in Kuwait when expecting performance evaluation.

Details

International Journal of Productivity and Performance Management, vol. 69 no. 9
Type: Research Article
ISSN: 1741-0401

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Article
Publication date: 1 December 2020

Rabih Nehme, Amir Michael and Alcheikh Edmond Kozah

The research paper investigates auditors' dysfunctional behaviors in relation to performance appraisals. It explores the dysfunctional audit behavior (DAB) differences…

Abstract

Purpose

The research paper investigates auditors' dysfunctional behaviors in relation to performance appraisals. It explores the dysfunctional audit behavior (DAB) differences among experienced/inexperienced and male/female auditors when expecting performance appraisals, how their perception of DAB changes and how their reactive-outcomes vary.

Design/methodology/approach

The survey comprises statements pulled from performance appraisal templates used by the Big Four audit firms in the UK. The sample has been tested during two different periods to highlight variations in the perception of DAB.

Findings

Experienced auditors become more tolerant of DAB compared to their perception when they were inexperienced. Inexperienced male auditors are generally more accepting of DAB compared to their inexperienced female counterparts. Experienced female respondents continue to be less accepting of DAB.

Originality/value

The study associates performance appraisal procedures with DAB. The analysis examines the perception of dysfunctional behavior according to the level of experience auditors (males and females) accumulate over time.

Details

Benchmarking: An International Journal, vol. 28 no. 4
Type: Research Article
ISSN: 1463-5771

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Article
Publication date: 5 October 2012

Marietta Peytcheva and Peter R. Gillett

The purpose of this paper is to investigate practicing auditors' beliefs regarding the effect of prior involvement on the occurrence of quality threatening behaviour (QTB…

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2667

Abstract

Purpose

The purpose of this paper is to investigate practicing auditors' beliefs regarding the effect of prior involvement on the occurrence of quality threatening behaviour (QTB) during an audit. The authors examine the extent to which auditors' beliefs about QTB are consistent with the theoretical framework of Kanodia et al., according to which prior involvement in audit work would increase the likelihood of auditors suppressing evidence inconsistent with earlier audit decisions.

Design/methodology/approach

The authors conduct an experiment in which auditors assess the likelihood of perceived reputation threats associated with encountering disconfirming evidence late in the audit, and the likelihood that such evidence will be suppressed.

Findings

Auditors participating in the study believe that prior involvement will induce a perception of personal reputation threats in an auditor encountering evidence inconsistent with the conclusions of earlier audit work. Participants perceive an auditor with prior involvement in the audit work to be more likely to suppress audit evidence than an auditor with no prior involvement; this effect is largely explained by the personal reputation threats believed to be induced by prior involvement.

Research limitations/implications

The findings provide important information, from the perspective of practicing auditors, about a situational antecedent of QTB that is present on most audit engagements. Prior involvement is perceived by auditors to induce a conflict of interest in reporting troublesome evidence uncovered late in the audit. These perceptions suggest it is important to raise reviewers' awareness of the possibility of undesirable behavior in such situations. Potential limitations of the study relate to generalizability of the results under different levels of misstatement risk and under different environments in audit practice. Also, the authors do not measure auditors' actual behaviour, but their assessment of hypothetical situations and beliefs about others' actions. Future research can examine actual auditor behaviour in the presence of prior involvement.

Originality/value

The paper provides evidence on auditors' beliefs about the effects on QTB of prior involvement, a factor that has not been previously studied in this line of research. The authors show that auditors' beliefs about QTB are consistent with Kanodia et al.'s theoretical framework. The study is the first to measure auditors' assessments of perceived reputation threats and to show their mediating effect on the predicted behavior of audit professionals.

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Article
Publication date: 3 April 2018

Suhaiza Ismail and Nursia Yuhanis

The purpose of this paper is to investigate factors affecting ethical work behaviour among Malaysian public sector auditors. Based on Hunt and Vitell model, there are four…

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1297

Abstract

Purpose

The purpose of this paper is to investigate factors affecting ethical work behaviour among Malaysian public sector auditors. Based on Hunt and Vitell model, there are four research objectives for this study: to investigate the influence of ethical climate on public sector auditors ethical work behaviour; to examine the effect of professional commitment on ethical work behaviour of public sector auditors; to investigate the effect of corporate ethical values (CEV) on ethical work behaviour of public sector auditors; and to examine the effect of ethical ideology on ethical work behaviour of public sector auditors.

Design/methodology/approach

The respondents of the study were public sector auditors of National Audit Department in Malaysia. Using a survey questionnaire comprising instruments about the ethical climate, CEV, professional commitment, ethical ideology and organisational misbehaviour, a total of 382 were received and usable. In achieving the research objectives, multiple regressions were performed.

Findings

The results reveal that ethical work behaviour among public sector auditors in Malaysia is influenced by law and independence ethical climate, professional commitment, CEV and both idealism and relativism ethical ideology.

Originality/value

The present study provides new additional empirical evidence on determinants of ethical work behaviour of auditors in public sector from a developing economy (i.e. Malaysia) which is currently limited.

Details

Asia-Pacific Journal of Business Administration, vol. 10 no. 1
Type: Research Article
ISSN: 1757-4323

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Article
Publication date: 29 September 2021

Sandra Khalil and Rabih Nehme

The purpose of this paper is to shed light on factors leading to unethical acts committed by auditors from a cultural and gender perspectives. It investigates differences…

Abstract

Purpose

The purpose of this paper is to shed light on factors leading to unethical acts committed by auditors from a cultural and gender perspectives. It investigates differences in junior auditors’ attitudes towards audit behavior when a performance evaluation (PE) is anticipated. The objective of this study is to aid academicians and audit executives in developing new models of PE and internship programs that should mitigate dysfunctional behavior.

Design/methodology/approach

A survey adapted from Big Four companies’ performance appraisal templates was administered to junior accountants who have completed their internship programs and their external audit course at accredited universities in Lebanon and the USA. Several statistical tests were conducted to analyze the relationship between the different variables.

Findings

This paper shows how PE affects junior auditors’ attitudes to dysfunctional audit behavior (DAB). From a cultural standpoint, American auditors express more negative views towards DAB than their Lebanese counterparts. This paper also demonstrates that female auditors are less inclined towards DAB than male auditors.

Originality/value

Previous studies on the topic have been mostly conducted in developed countries with a scarcity of studies examining multiple countries. This study focuses on two different cultural contexts, a developed country, the USA and an emerging country, poorly represented in the literature, Lebanon. This paper also observes variances between male and female auditors in DAB when expecting a PE. The originality of this paper stems from its concurrent examination of the impact of gender and culture on DAB by using a sample of less-experienced auditors at the end of their educational path.

Details

Meditari Accountancy Research, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2049-372X

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