Auditor acceptance of dysfunctional behaviour: An explanatory model using individual factors
Faculty of Business and Law
School of Accounting, Finance and Economics / Finance, Economics, Markets and Accounting Research Centre
Purpose - The purpose of this paper is to investigate individual or personal factors contributing to individual auditor differences in acceptance of dysfunctional audit behaviour (DAB). Dysfunctional behaviour and staff turnover are associated with decreased audit quality, and is characterised as premature sign-off, gathering of insufficient evidence, accepting of weak client explanation, altering or replacing the audit procedures, and under-reporting of time, and have negative effects on the auditing profession. In this study the organizational behaviour and industrial psychology literatures provide the basis for the development and testing of an individual factors' model of DAB. Design/methodology/approach - Using path analysis for direct and indirect effects, survey results from registered Audit Managers are used to provide support for an explanatory model. Findings - Overall, results indicate that auditors who are more accepting of dysfunctional behaviour tend to possess an external locus of control and exhibit higher turnover intentions. Originality/value - These results suggest that individual factors play a role in identifying those who are more accepting of dysfunctional behaviour. The results can be useful in the operational and management control mechanism of human and social developments relating to dysfunctional behaviour issues.
Not open access