Dysfunctional behavior of external auditors the collision of time budget and time deadline evidence from a developing country

Abstract

The general goal behind this research is to gain a better understanding of factors leading to dysfunctional behavior of auditors. The role of auditors has been a controversial issue especially after the recent accounting scandals (WorldCom, Enron, Paramalat SpA, Waste Management Inc., Xerox Corporation, and Société Générale). In relation to these scandals and lawsuits, a question is frequently asked “where were the auditors?” The survey we offer up for research is made up of 34 questions that are designed to analyse the perception of auditors and the cause of dysfunctional behavior. The object of this research is comprised of auditors positioned and employed at the Big Four audit firms in Kuwait. The selected sample is comprised from auditors at different levels ranging from audit trainees to audit partners. The so-called stakeholder theory talks about the relationship between audit behavior and audit firm practices with time deadlines and time budgets involved. It is generally accepted that the more auditors align their interests with firms’ measures and practices, the more a firm is capable of meeting general goals and objectives. Consequently, this may result in a less dysfunctional workplace conduct. Dysfunctional behavior (DB) is analysed against two signalling proxies of dysfunctional behavior; premature sign-off and under reporting of chargeable time. DB is analysed against time budget and time deadline pressures. The results suggest that the general belief among auditors is that the profession of accountancy predetermines their tendency to commit certain patterns of dysfunctional behavior. The results indicate that auditors understand that dysfunctional behavior is exercised by the majority of auditors. Dysfunctional behaviour is exercised with intention and it is not committed out of ignorance. One of the interesting findings is that auditors, at all levels, are concerned about their reputation. Thus, dysfunctional behavior is exercised, to a certain extent, without harming the quality of the audit work. Having our investigation conducted at the Big Four audit firms, we have come to the conclusion that there is a general difference in behavior patterns among perceptions of dysfunctional behavior and normal skeptic professional behavior. Audit firms should continuously conduct workshop and training events related to dysfunctional behavior. It is revealed that some auditors are not aware that certain practices are considered dysfunctional behavior or not. This research work can be used to aid audit practitioners to mitigate audit dysfunctional behavior. It highlights certain type of practices that is exercised in an improper way.

Pengaruh Kompleksitas Tugas, Komitmen Organisasi, dan Time Budget Pressure Pada Perilaku Disfungsional Auditor

“…Hal ini menyebabkan penelitian mengenai perilaku auditor BPKP khususnya auditor Perwakilan BPKP Provinsi Bali penting untuk dilakukan. Meskipun dalam teori sudah dinyatakan secara jelas bahwa proses audit yang baik adalah audit yang mampu meningkatkan kualitas informasi yang terdapat dalam laporan audit tersebut, namun pada praktiknya masih terdapat auditor yang mengurangi atau mengabaikan prosedur dalam melakukan proses audit atau biasa disebut dengan perilaku disfungsional (Nehme et al, 2016).…”

Dysfunctional Behavior at the Workplace and Its Impact on Employees’ Job Performance

“…There are various negative outcomes that can result from various forms of dysfunctional behavior at the workplace that will deteriorate the overall organizational performance (MacKenzie et al, 2015;Nehme, Mutawa, & Jizi, 2016). According to (York & Brookhouse, 1988), dysfunctional behavior can cause a severe level of tension, anxiety, fatigue, and stress especially harassment as leading to severe fear and anger.…”

Pengaruh Time Budget Pressure Terhadap Perilaku Disfungsional Auditor dengan Mediasi Skeptisisme Profesional di KAP Provinsi Bali

“…Situasi di mana auditor di batasi pada time budget pressure dan cenderung kaku akan memotivasi auditor untuk melewati atau mengabaikan beberapa prosedur audit sehingga penugasannya dapat selesai pada waktunya tanpa memperhatikan hasil temuan audit. Perilaku pengurangan kualitas audit seperti penghentian premature (premature sign off) atas prosedur audit sering dikaitkan dengan anggaran waktu audit dan sistem pengendalian secara keseluruhan (Rabih et al, 2016). Tindakan penghentian premature ini berkaitan dengan penghentian terhadap prosedur audit yang disyaratkan, tidak melakukan pekerjaan secara lengkap dan mengabaikan prosedur audit tetapi auditor berani mengungkapkan opini atas laporan keuangan yang diauditnya.…”