Halil Paino, Zubaidah Ismail and Malcolm Smith
The quality of the opinion provided by audit firms is an important determinant of their long‐term survival, but audit quality is difficult to gauge, which makes it particularly…
Abstract
Purpose
The quality of the opinion provided by audit firms is an important determinant of their long‐term survival, but audit quality is difficult to gauge, which makes it particularly sensitive to the behaviour of the individuals who carry on audit work. This paper seeks to identify the incidence of dysfunctional audit behaviours and audit quality reduction behaviours, actions taken by an auditor during engagement that reduce evidence‐gathering effectiveness.
Design/methodology/approach
The paper is based on a survey of 244 auditors working in small/medium and big audit firms in Malaysia.
Findings
The paper identifies key variables leading to dysfunctional audit behaviour.
Research limitations/implications
The paper is subject to the normal limitations associated with survey research.
Practical implications
The paper provides basic empirical evidence of a potentially serious risk of dysfunctional behaviours that may impair audit quality.
Originality/value
The paper provides empirical evidence to address the concerns of the Malaysian regulatory authorities regarding audit quality.
Halil Paino, Malcolm Smith and Zubaidah Ismail
The purpose of this paper is to investigate individual or personal factors contributing to individual auditor differences in acceptance of dysfunctional audit behaviour (DAB)…
Abstract
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.