The Effects of COVID-19 and Continuous Auditing on Employees' Compliance with the Internal Control System: The Moderating Role of Conscientiousness

52 Pages Posted: 15 Jul 2021

See all articles by Marc Eulerich

Marc Eulerich

University of Duisburg-Essen, Mercator School of Management

Vanessa Lopez-Kasper

University of Duisburg-Essen - Mercator School of Management

Amin S. Sofla

KU Leuven - Department of Accountancy

Date Written: June 25, 2021

Abstract

The trend towards continuous auditing of business operations is growing. In economically demanding times, organizations aim to improve compliance with internal controls. Our study investigates whether continuous auditing and a (COVID19) crisis situation interact with the personality trait conscientiousness among auditees to influence compliance with internal controls. We conducted a between-subjects experiment manipulating audit frequency (continuous vs. traditional audit) and the current business situation (business as usual vs. crisis) and received 125 complete responses from sales professionals. We found that the effect of a crisis situation on the likelihood to engage in non-compliance with internal controls is conditional on conscientiousness, while continuous auditing does not seem to interact with the trait of conscientiousness. Specifically, we observe that less conscientious individuals who are operating under a crisis condition and continuously audited are likelier to engage in non-compliance with internal controls. In contrast, individuals with a high level of conscientiousness were more likely to comply with internal controls when continuously audited in the context of a crisis.

Keywords: Continuous Auditing, Conscientiousness, Continuous Monitoring, COVID-19, Internal Auditing, Technology-Based Audit Techniques

JEL Classification: G30, G32, G34, M40, M42

Suggested Citation

Eulerich, Marc and Lopez-Kasper, Vanessa and Salimi Sofla, Amin, The Effects of COVID-19 and Continuous Auditing on Employees' Compliance with the Internal Control System: The Moderating Role of Conscientiousness (June 25, 2021). Available at SSRN: https://ssrn.com/abstract=3873799 or http://dx.doi.org/10.2139/ssrn.3873799

Marc Eulerich (Contact Author)

University of Duisburg-Essen, Mercator School of Management ( email )

Lotharstrasse 65
Duisburg, 47057
Germany
00492033792600 (Phone)

HOME PAGE: http://www.msm.uni-due.de/ircg

Vanessa Lopez-Kasper

University of Duisburg-Essen - Mercator School of Management

Lotharstra├če 65
Duisburg, Nordrhein-Westfalen 47057
Germany

Amin Salimi Sofla

KU Leuven - Department of Accountancy ( email )

Leuven, 3000
Belgium

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