Auditor Behavior Research Articles

Examining the Influence of Religiosity and Emotional Intelligence on the Ethical Conduct and Decision-Making of Auditors

This study explores the impact of religiosity and emotional intelligence on the ethical behavior of auditors. The research aimed to empirically assess how these two variables contribute to ethical conduct in the auditing profession, particularly in government offices. Data were collected from 102 government auditors through a questionnaire and analyzed using the Partial Least Square (PLS) method via WarpPLS software. The results demonstrated that both religiosity and emotional intelligence significantly and positively influence auditors' ethical behavior. These findings suggest that strengthening these qualities among auditors could enhance ethical decision-making and restore public confidence in the auditing profession.

Effect on auditors' ethical behavior: Understanding the accountant's code of ethics, internal locus of control, and emotional intelligence

This study aims to empirically prove the influence of understanding the accountant's code of ethics, internal locus of control, and emotional intelligence on the ethical behavior of auditors in Public Accounting Firms in Bali Province. The population used was 123 auditors working in 19 Public Accounting Firms in Bali Province. The sampling technique in this study was the nonprobability sampling method using the purposive sampling technique. The number of samples used and had met the sample criteria was 60 auditors as respondents. The analysis technique used was multiple linear regression analysis. Based on the results of the data analysis, it was found that understanding the accountant's code of ethics, internal locus of control, and emotional intelligence had a positive effect on the ethical behavior of auditors. The implication is that it can be an input for Public Accounting Firms in Bali Province to improve the quality of audit practices, manage risks better, and build a strong reputation by carrying out actions according to professional ethical standards to create ethical behavior in carrying out professional responsibilities.

Study of auditor performance determinants: Organizational commitment as moderation (case study of Tangerang city inspectorate)

This study explores the determinants of auditor performance, focusing on the moderating role of organizational commitment within the Tangerang City Inspectorate. Employing stratified random sampling, a sample of 250 auditors was chosen to ensure diversity across experience, departmental affiliation, and roles. Quantitative analysis used SPSS to examine the relationships between auditor performance, organizational commitment, and other relevant variables. Findings indicated that organizational commitment significantly moderates the effects of various social pressures on auditor performance. This underscores the necessity for auditing organizations to foster organizational commitment to enhance auditor efficacy and uphold ethical standards. These results hold substantial implications for governance and audit quality assurance, suggesting that reinforced organizational commitment could lead to more robust auditor performance and ethical conduct within similar urban governance settings. This study contributes valuable insights into the influence of organizational dynamics on auditor behaviour and performance outcomes.

The Influence of Competence, Independence, and Supervision on Dysfunctional Audit Behavior (Case Study at the BPK Representative Office of West Java Province)

The Influence of Competence, Independence, and Supervision on Dysfunctional Audit Behavior (Case Study at the BPK Representative Office of West Java Province)

The Effect of Legal - Ethical And Psychological Factors In Reducing Accounting Manipulations: A Field Study

The study aimed to elucidate the extent of accountants' adherence to legal and ethical factors, understand the psychological state of the auditor, explore the impact of regulations governing the auditing profession, and delineate the effect of psychological and ethical factors on the auditor's behavior. The study also sought to gather opinions from auditors, academics, and educators at the University of Baghdad regarding legal, ethical, and psychological factors within the profession. The study found significant correlations between legal, ethical, and psychological factors, and accounting manipulations. There was a statistically significant relationship between legal factors and accounting manipulations, with a correlation coefficient of (0.383) at a significance level of less than (0.01). Similarly, a significant relationship was found between ethical factors and accounting manipulations, with a correlation coefficient of (0.416) at a significance level of less than (0.01). Moreover, a significant relationship was established between psychological factors and accounting manipulations, with a correlation coefficient of (0.659) at a significance level of less than (0.01). The study recommends providing objective solutions to contribute to identifying the reasons for committing manipulation within organizations. It emphasizes the need to implement financial statement analysis techniques as a means of detecting manipulation and underscores the importance of legal actions (civil and criminal) related to filing claims in court, and preserving and protecting evidence. Additionally, auditors should act impartially, separating personal interests from their supervisory role.

Enhancing auditors’ professional skepticism through nudges: an eye-tracking experiment

This article studies whether nudges – that is, gentle alterations of people’s behaviour – increase audit quality. Although the utility of nudges is well-established in behavioural sciences, their applicability and efficacy have been less studied in accounting and auditing. To bridge this knowledge gap, the study extends nudge theory to financial audits, offering experimental evidence of the impact of social norms and justification nudges on auditor behaviour. A factorial 2 × 2 between-subject experiment (social norms and justification) shows that nudges amplify professional skepticism, a critical indicator of audit quality. A follow-up eye-tracking experiment involving an audit task identifies the underlying cognitive mechanism of this effect; nudges heighten auditors’ visual attention to pertinent information, thereby refining their evaluations of audit evidence and increasing their professional skepticism.

Remote Auditing, Aspect of Auditor Behavioral and Use Of Technology

This scoping review aims to map out existing studies related to remote auditing that focus on the topics of auditors' behavioural and technology use. The importance of auditors' adaptation to the challenges posed by the pandemic and the need for improved skills and knowledge in the face of a changing work environment. This review refers to five stages, namely: 1) identification of research questions; 2) identification of relevant research; 3) selection of articles; 4) data mapping; and 5) compiling, summarising and reporting the results. The time span of the article is 2021-2024. The results of this review revealed that most studies recognised an increase in the efficiency of their daily tasks in terms of remote auditing. However, there is still debate regarding auditor behaviour that is influenced by remote auditing activities, which is feared to reduce skepticism. In addition, the use of technology in remote auditing brings data security threats. Therefore, further research is needed to uncover auditor scepticism and data security in remote audit activities. This review is expected to provide greater insight into the importance of remote auditing, auditor adaptation to change, and technology utilisation in improving audit quality in today's digital era

Digital transformation and corporate audit risk: Mediating effects of auditor behavior

Digital transformation has emerged as a critical factor in shaping the modern business landscape, with significant implications for corporate governance and audit risk. This study examines how digital transformation affected corporate audit risk in Chinese A-share listed companies from 2011 to 2022. Employing comprehensive empirical analyses, we discover that corporate audit risk is greatly decreased by digital transformation, with this relationship partially mediated by changes in audit fees, audit input, and audit opinions. The effects are more pronounced in state-owned firms. Our findings highlight the importance of integrating digital tools in auditing practices to mitigate risk and enhance audit quality. This study contributes to the understanding of how digital transformation influences auditor behavior and audit processes, providing valuable insights for policymakers and corporate managers in the digital era.

Career choice intention and work engagement of the audit professional in the Brazilian context

Objective: This research analyzed the attitudinal, subjective norms, behavioral perception, and work engagement variables that determine the audit professional’s intention to choose to pursue the career.Method: The methodology is quantitative, descriptive, and survey. Data were obtained through the application of a questionnaire with 312 audit professionals in Brazil. Data analysis included structural equation modeling.Originality/Relevance: The theoretical gap lies in the relationship between the Theory of Planned Behavior and work engagement in audit professionals. In this way, the intention of deciding on a career does not consist only in choosing a specific branch within the accounting area, but also in the individual’s willingness and competence to implement their projects and in the future engagement to support it, which demonstrates the confidence of the search.Results: The results revealed that audit professionals are happy to follow in this area, feel confident, believe in their professional capacity, and intend to grow in their careers in the coming years. Professionals have high levels of vigor, dedication, and concentration, and are highly engaged in their work. Personal attitudes, subjective norms, vigor, and dedication presented an explanatory power of 58% of the intention, concluding that the relationships between the scales are supported.Theoretical contributions: The model for measuring the relationship between intention to choose a career and engagement at work was validated. The study fills a gap in the behavioral area, helping to understand the auditor's behavior.

The impacts of federal judge ideology on auditor litigation risk and auditor behavior

AbstractIn this paper, we investigate whether federal judge ideology, ceteris paribus, affects auditor litigation risk and auditor behavior. We find that auditors whose client firms are in jurisdictions dominated by liberal judges are more likely to be sued and make higher payouts to plaintiffs when sued. Furthermore, these client firms are more likely to receive going‐concern opinions and pay higher audit fees. Finally, we find no evidence that the quality of audited financial statements is affected by judge ideology. The evidence documented in this paper indicates that federal judge ideology affects auditor litigation risk and some aspects of auditor behavior.

Work Overload, Time Pressure and Social Influence on the Work Efficiency of the Financial and Tax Auditor: Evidence from Peru

Objective: This research presents a research model on the effects of work stress and its components: work overload, time pressure and social influence on audit efficiency, taking into account the perceptions of both the financial and tax auditor. Methodology: A partial least squares structural equation model (PLS-SEM) was used on the basis of a total of 240 responses from financial and tax auditors belonging to the Professional Associations of Lima and Callao in Peru. Results: According to the PLS-SEM model, it is suggested that work overload is the most important factor affecting audit efficiency. Time pressure has an impact on the quality of work, as well as social influence on audit efficiency and its components: quality of work and employee welfare. Research Implications: Further research could address the evolution of the effects of the variables. Also, cross-cultural research should be considered, considering other cities in Latin America. Practical Implications: Senior management and boards of audit firms should consider constructing a career path that encompasses the variables investigated and their impact over time on the auditor's career. Originality/value: The study contributes to the development of scientific literature on the characteristics of financial and tax auditing in Peru and the behavior of auditors.

Determinants of Dysfunctional Audit Behavior: Internal and External Factors

Determinants of Dysfunctional Audit Behavior: Internal and External Factors

전문성이 필요한 산업에 속한 피감사기업을 감사하는 산업전문감사인의 감사행태

[Purpose] This study aims to examine the behavior of industry specialist auditors according to industry characteristics. Specifically, this study aims to provide evidence on the audit efficiency of industry specialist auditors by analyzing whether the audit hours and audit fees of industry specialist auditors are differentiated for industries requiring industry specialization designated by the Financial Supervisory Service.
 [Methodology] We used a sample of 19,115 firms and years for Korean listed companies from 2008 to 2020. For the industries requiring specialization, we used the industry groups selected by the Financial Supervisory Service in November 2023 based on the opinions of listed companies and accounting firms.
 [Findings] The results show that, first, industry specialist auditors are associated with higher audit fees and more audit hours on average, but these fees and audit hours are significantly lower for industries designated as requiring industry specialty, which can be interpreted as an audit efficiency. Second, the above association does not appear in the analysis using hourly audit fees, explaining the process by which efficiency gains are passed on to client firms. Third, the relations does not appear in analyses of audit quality measured by the absolute value of performance－matched discretionary accruals, providing further evidence of the efficiency with which audit quality is maintained at lower levels of audit time. These results can be interpreted as indicating that industry specialist auditors perform the audit process efficiently in industries where specialization is essential, and that the benefits of reduced audit efforts are fully passed on to the clients through this efficient audit process.
 [Implications] The contribution of this study is that it provides evidence on the audit efficiency of industry specialist auditors through data that directly manifests the need for specialization while reflecting the perspectives of both audited companies as consumers and accounting firms as suppliers of industry specialization.

Pengaruh Pemahaman Kode Etik Profesi Akuntan Terhadap Perilaku Etis Auditor (Studi Kasus Kantor Akuntan X Dan Y di Jakarta Selatan)

The increasing number of cases of violations of the Accountant's Code of Ethics among the Accounting Profession is currently causing a crisis of trust in society. This research aims to determine the influence of understanding the professional code of ethics for accountants on the ethical behavior of auditors at KAP X and Y in South Jakarta. The research design uses quantitative research methods. Sampling techniques are generally carried out randomly, data collection uses primary data, namely distributing questionnaires or questionnaires that are quantitative or statistical in nature with the aim of testing predetermined hypotheses. In this research, the population is Auditors who work at Public Accounting Firms X and Y in South Jakarta using saturated sampling or census. The data analysis used in this research is analyzing quantitative data consisting of validity tests, reliability tests, classical assumption tests, simple regression and hypothesis tests with the help of the SPSS version 27 program. 9.273 with a significant value of 0.000, while ttable is 0.679, so tcount > ttable (9.273 > 0.679), then the code of ethics shows a number < 0.005 (0.000 < 0.005), Ha is accepted, meaning that partially the code of ethics has a significant effect on the auditor's ethical behavior.

A Blockchain-based carbon emission security accounting scheme

To solve the problem of climate warming, countries around the world have paid special attention to the construction of carbon governance. Carbon emission accounting is an important policy tool to control the vented CO2. But at present, there are third-party agencies in carbon emission accounting that cannot ensure the fairness and impartiality of accounting, and there may be risks such as illegal use and leakage of sensitive information in the process of carbon emission data transmission. Therefore, We design the blockchain-based carbon emission security accounting scheme (BCESAS) and propose cross-chain verification contract to ensure the efficiency of cross-chain information accounting. In addition, bilinear pairing is used to ensure data integrity, and we encrypt private data using an improved and more secure homomorphic encryption algorithm to ensure that privacy is not leaked during the transfer of carbon emission data, which is more efficient than other homomorphic encryption algorithms. We also use reputation mechanism to regulate the behavior of carbon emission auditors. The theoretical and experimental analysis demonstrates that BCESAS can verify the integrity, correctness and privacy of cross-chain data calculation result effectively, realizing secure and reliable expansion of blockchain.

Phenomena Affecting the Ethical Behavior of Internal Auditors in Higher Education

The focus of this study is to find out how auditors perceive when carrying out their duties and which can influence auditor ethical behavior, especially in the tertiary environment. This research was conducted at the Internal Supervisory Unit of a state university. This study uses a phenomenological approach as part of qualitative research, data collection using interviews with auditors in the financial section of the Internal Supervisory Unit of State Universities. Based on research on the factors that influence the ethical behavior of auditors in the tertiary environment, there is an auditor's ethical reasoning, the professional commitment of an auditor, environmental conditions related to the influence of superiors, and also ethical, moral support, as well as the spirituality of the auditor.

Unlocking auditors’ perceived external employability: exploring antecedents and behavioral consequences

PurposeIn a rapidly changing career landscape where lifelong job security is no longer guaranteed, this study investigates how audit firms play an important role in shaping their employees’ career perceptions and the subsequent effects on auditor behavior. Specifically, it explores the link between audit firms’ career development initiatives and auditors’ perceptions of external employability – an important determinant of auditor behavior. Using the framework of social exchange theory, the study investigates how perceived external employability affects both relational and operational behaviors of auditors.Design/methodology/approachThe study employs structural equation modeling on survey data from 359 auditors.FindingsThe results indicate that when audit firms actively support career development, it positively contributes to auditors’ perceived external employability. A higher perceived external employability, in turn, leads to positive behavioral outcomes among auditors, including stronger relational behaviors (such as professional commitment) and operational behaviors (including heightened professional skepticism and reduced behaviors that could compromise audit quality).Originality/valueThis study uncovers a paradox where perceived external employability, typically viewed as a risk, emerges as a potent driver of desirable auditor behavior. In today’s dynamic career landscape, emphasizing individual-centered and flexible careers, these results highlight the benefits of perceived external employability. Rather than undermining audit services, increased perceived external employability driven by firm investments in auditors’ careers acts as a catalyst for desirable auditor behavior. Organizational support in terms of career development practices creates an environment where auditors are more committed, professionally skeptical and uphold the quality of audit services.

Key audit matters and auditing quality in the era of COVID-19 pandemic: the case of Jordan

PurposeThis study aims to investigate the moderating effect of the COVID-19 epidemic on the relationship between key audit matter (KAM) and auditing quality.Design/methodology/approachThe authors use the ordinary least squares regression on data from 942 firm-year observations of Jordanian non-financial institutions across the period (2017–2022) to test the hypotheses. The authors use content analysis method to measure levels of KAM disclosure.FindingsThe investigation’s findings highlight the importance of KAM disclosure in achieving audit quality in line with international standard on auditing no. 701 (ISA-701) requirements. COVID-19 is also found to have a positive relationship with audit quality, further confirming the crisis’s devastating impact on audit complexity and risks and providing evidence for the need for supplementary, high-quality audit services. Due to the correlation between KAM disclosure and increased auditor workload and responsibility, the analysis reveals that the COVID-19 factor strengthens the link between KAM disclosure and audit quality.Practical implicationsThis study has the potential to be used as a basis for the creation of a new regulation or standard regarding the reporting of unfavourable events in financial filings. This study’s findings provide standard-setters, regulators and policymakers with current empirical data on the effects of implementing ISA-701’s mandate for external auditors to provide more information on KAM. The COVID-19 crisis offers a suitable setting in which to examine the value of precautionary disclosures in times of economic uncertainty, as well as the significance of confidence interval disclosures and the role of external auditing in calming investor fears. This analysis is helpful for stakeholders, regulatory agencies, standard-setters and readers of audit reports who are curious about the current state of KAM disclosures and the implementation of ISA-701. The results may have ramifications for academia in the form of a call for more evidence expanding this data to other burgeoning fields to have a clear explanation of the real impact of reporting KAM on audit practices.Originality/valueTo the authors’ awareness, this research is one of the few empirical studies on the effect of the COVID-19 crisis on auditing procedures, and more specifically, the effect of disclosures on KAM by external auditors on audit quality. This study’s findings represent preliminary scientific evidence linking the pandemic to business performance. Minimal research has been done on how auditors in developing nations react to pandemic investor protection and how auditors’ enlarged reporting responsibilities affect them. The vast majority of auditing studies have been conducted in a highly regulated system, so this research contributes by examining audit behaviour in a weak legal context.

How do auditors’ use of industry norms differentially impact management evaluations of audit quality under principles-based and rules-based accounting standards?

Interactions between auditors and client management affect audit quality on an engagement because those interactions influence and incentivize auditor behavior and decision-making. I perform an experiment using 191 management participants to investigate (1) whether an auditor’s use of professional judgment or industry norms to justify proposed adjustments increases management’s evaluation of audit quality, and (2) whether these evaluations differ under principles-based or rules-based standards. I find that, although management views industry norms to be more credible, they disregard an auditor’s justification method and evaluate audit quality based on underlying accounting attributes when reporting under a more rules-based standard, such as US GAAP. However, when an accounting standard is more principles-based, such as IFRS, using industry norms positively influences perceptions of audit quality. Thus, when standards are less precise, auditors are incentivized to engage in herding behavior by defaulting to industry norms when determining appropriate accounting treatments. This study increases our understanding of the incentives and motivations faced by auditors in their interactions with client management under both rules-based and principle-based accounting standards.

EXAMINATION OF ETHICAL AND PROFESSIONAL CONDUCT OF LEBANESE EXTERNAL AUDITORS

This article proposes to analyze the ethical reasoning of Lebanese external auditors with regard to the extent of their compliance with the code of professional conduct. As part of a positivist epistemological format, a quantitative methodology was employed. The data were collected using semi-directive survey that was sent to 250 Lebanese external auditors. The final sample consisted of 207 Lebanese external auditors for which we used correlation and logistic regression. The results reveal that because of an economic dependance on their clients, Lebanese external auditors demonstrate an inability to remain independent. This limits compliance with the code of professional conduct and thus negatively affects the quality of audit work. This study adds to the sparse literature found in developing countries that highlight the behavior of Lebanese external auditors with respect to professional conduct, which has always been considered sensitive and complex.