Dysfunctional Auditor Behavior: The Effects of Tone at the Top and Supervisors’ Relationships

Research on Professional Responsibility and Ethics in Accounting, Forthcoming

40 Pages Posted: 20 Sep 2013

See all articles by Wayne Tervo

Wayne Tervo

Murray State University - Accounting Department

Murphy Smith

Texas A&M University-Corpus Christi-Department of Accounting

Marshall K. Pitman

University of Texas at San Antonio

Date Written: 2013

Abstract

This study examines the influence of firm management’s ethical “tone at the top” (tone) and the working relationship of an auditor with his/her supervisor (senior) on the auditor’s propensity to engage in an unethical, dysfunctional auditor behavior (DAB). Findings indicate that environmental factors influence the staff auditor’s decision of whether or not to follow a course of action suggested by the supervisor that is contrary to both the audit program and generally accepted auditing standards (GAAS). Specifically, auditors are influenced by the tone that the partner sets for the firm and by the working relationship that the staff auditor has with the supervising senior auditor. The results of this research have ramifications for the auditing profession, as they identify specific factors outside of auditing standards and beyond an auditor’s moral reasoning capabilities that can influence the acceptance of unethical, dysfunctional behavior.

Keywords: ethics, tone at the top, dysfunctional auditor behavior, DAB

JEL Classification: M4, M41

Suggested Citation

Tervo, Wayne and Smith, Murphy and Pitman, Marshall K., Dysfunctional Auditor Behavior: The Effects of Tone at the Top and Supervisors’ Relationships (2013). Research on Professional Responsibility and Ethics in Accounting, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2327832

Wayne Tervo

Murray State University - Accounting Department ( email )

Murray, KY 42071-3314
United States

Murphy Smith (Contact Author)

Texas A&M University-Corpus Christi-Department of Accounting ( email )

6300 Ocean Dr
Corpus Christi, TX 78412
United States

Marshall K. Pitman

University of Texas at San Antonio ( email )

One UTSA Circle
San Antonio, TX 78249
United States

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