Behavioral Aspect: The Impact of Organization Culture and Ethicality on Internal Auditor’s Decision Making
DOI:
https://doi.org/10.61841/0aex1q79Keywords:
Behavioral aspect, organization culture, ethicalityAbstract
Organizational Culture also known as Corporate Culture is referred to a system of shared beliefs, values, and assumptions that guide people between what is appropriate and inappropriate behavior. Ethical culture of the organization develops to be a powerful tool for leaders to communicate the organizational values to all members of the organization. Leaders who develop and implement ethical culture will be followed by all members of the organization and make individual milestone to perform an action. The reassessed studies given in literature demonstrates the significance of organizational culture and ethicalities and how they impact the auditor’s decision-making practices as it brings about the ethical culture, leadership styles, rule of conduct and organizational artifacts and at last the way each of the components influence internal auditor’s decision making.
The findings of the present study have illustrated that there is a positive relationship between the cultural and ethical factors of (Ethical culture, Leadership style, Rule of conduct, and Artifacts) with the dependent variable Internal auditor’s decision making. The present quantitative study has a significance in the area of the organizational culture and ethical development of the corporate environment and among the different perspectives that this study could be significant to includes auditor’s and managements perspective as well as academic perspectives.
Downloads
References
1. Alzeban, A. (2014). The Impact of Culture on the Quality of Internal Audit. Journal of Accounting, Auditing & Finance, 30(1), pp.57-77.
2. Ajzen, I. (2014). The theory of planned behavior. Organizational Behavior and Human Decision Processes 55: 179-211.
3. American Institute of Certified Public Accountants, (2003). Research Examines Effects of Corporate Accounting Scandals on CPA Brand.
4. American Institute of Certified Public Accountants, (2010). Code of Professional Conduct. New York: AICPA.
5. Apriliani, D., Anggraini ZR, R. and Anwar, C. (2014). The Effect of Organization Ethical Culture and Ethical
Climate on Ethical Decision Making of Auditor with Self Efficacy as Moderating. review of integrative
business and economics, 4(1), pp.226-244.
6. Ardichvili, A. and Jondle, D. (2010). Integrative Literature Review: Ethical Business Cultures: A Literature
Review and Implications for HRD. Human Resource Development Review, 8(2), pp.223-244.
7. Arel, B., Beaudoin, C.A. and Cianci, A.M., 2011. The impact of ethical leadership, the internal audit function,
and moral intensity on a financial reporting decision. Journal of Business Ethics, 109(3), pp.351-366.
8. Baharud-din, Z., Shokiyah, A. and Ibrahim, M.S., 2014. Factors that contribute to the effectiveness of internal
audit in public sector. International Proceedings of Economics Development and Research, 70, p.126.
9. Bobek, D.D. and Hatfield, R.C. (2010). An investigation of the theory of planned behavior and the role of
moral obligation in tax compliance. Behavioral Research in Accounting. Vol. 15 pg. 13, 26 pgs. Sarasota,
Florida.
10. Brown, K.M. (2013). Theory of Reasoned Action/Theory of Planned Behavior (By Ajzen, I and Fishbein, M,
1975). University of South Florida, Community and Family Health. Florida, U.S.A.
11. Buble, M. (2012). Interdependence of organizational culture and leadership styles in large firms.
Management: Journal of Contemporary Management Issues , 17(2), 85-97.
12. Capps, T. E (2013). Rebuilding trust in corporate America. Vital Speeches of the Day 69(9): 273.
13. Craft, J. (2012). A Review of the Empirical Ethical Decision-Making Literature: 2004–2011. Journal of
Business Ethics, 117(2), pp.221-259.
14. Conor O'Leary, Jenny Stewart, (2007) "Governance factors affecting internal auditors' ethical
decision‐ making: An exploratory study", Managerial Auditing Journal, Vol. 22 Issue: 8, pp.787-808
15. Dahlin, L.A. (2014). An Empirical Study of Ethical and Unethical Decision-Making by Certified
Management Accountants, A dissertation, submitted to Nova Southeastern University, Wayne Huizenga
School of Business and Entrepreneurship. Michigan: Bell & Howell Information and Learning.
16. Dal Mas, L. and Barac, K. (2018). The influence of the chief audit executive’s leadership style on factors
related to internal audit effectiveness. Managerial Auditing Journal, 33(8/9), pp.807-835.
17. Doering, R. R. (2013). Ethical decision-making in a business setting: Perceptions of employees. A
dissertation. Texas A&M University. Texas, U.S.A.
18. Doll, J. and Ajzen, I. (2011). Accessibility and Stability of Predictors in the Theory of Planned Behavior.
Journal of Personality and Social Psychology. Vol. 63, Issue 5; page 754: Washington, U.S.A.
19. Douglas, P., Davidson, R. and Schwartz, B. (2001). Journal of Business Ethics, 34(2), pp.101-121.
20. Epstein, E.M. (2011). Business Ethics and Corporate Social Policy. Business & Society. 37(1), 7-39.
21. Etherington, L. & Hill, N. (2010). Ethical Development of CMAs: A Focus on Non-Public Accountants in the
United States. Research on Accounting Ethics, 4, 225-245.
22. Finn, D., et al. (2010). Ethical Problems in Public Accounting: The View from the Top. Journal of Business
Ethics. Iss. 7, pgs 605-615
23. Fletcher, B. et al (2012). Measuring Organizational culture: The Cultural Audit. Managerial Auditing Journal.
Vol. 7, Issue 6, page 30: Bradford.
24. Fraedrich, J. P. and Ferrell, O.C. (2010). The Impact of Perceived Risk and Moral Philosophy Type on
Ethical Decision Making in Business Organizations. Journal of Business Research 24(4): 283.
25. Gavin, T., Roy, R. and Sumners, G. (2010). A Corporate Code of Conduct: The Internal Auditor’s Role.
Managerial Auditing Journal, 5(2).
26. Geriesh, L. (2013). Organizational culture and fraudulent financial reporting. The CPA Journal, Vol. 73, Issue
3, Page 28: New York.
27. Gibson, A.M. &Frakes, A. H. (2010). Truth or Consequences: A Study of Critical Issues in Decision-Making
in Accounting. Journal of Business Ethics, 16(2), 161-171.
28. Gunz, S. and McCutcheon, J. (2011). Are academics committed to accounting ethics education? Journal of Business Ethics. Vol.17, Iss. 11, p. 1145
29. Hansen, R. (2012). A Multidimensional Scale for Measuring Business Ethics: A Purification and Refinement. Journal of Business Ethics. Vol. 11, Iss. 7; p. 523 (12 pages): Dordrecht.
30. Hoftstede, G. (2010). Attitudes, values and organizational culture: Disentangling the concepts Organization Studies. Vol. 19 ,Iss. 3; p. 477 (17 pages): Berlin
31. Hofstede, G., et al. (2017). Measuring organizational cultures: A qualitative and quantitative study across twenty cases. Administrative Science Quarterly. (June) 35: 286-316. Jick, T.D. 1979. Mixing qualitative and quantitative methods: Triangulation in action. Administrative Science Quarterly. (Dec) 24:602-11.
32. Institute of Internal Audititors, (IIA) (2019). Code of conducts.
33. Khalid Salih, W. and Tin Hla, D. (2016). Impact of Organizational Culture to Improve Audit Quality Assurance in the Public Sector. IOSR Journal of Business and Management, 18(09), pp.121-124.
34. Man‐ Fong Ho, C. (2011). Ethics management for the construction industry. Engineering, Construction and Architectural Management, 18(5), pp.516-537.
35. Menon, E.M. (2014), “The relationship between transformational leadership, perceived leader effectiveness and teachers’ job satisfaction”, Journal of Educational Administration, Vol. 52 No. 4, pp. 509-528.
36. Pratt, J. and Beaulieu, P. (2011). Organizational culture in public accounting: Size, technology, rank, and functional area. Accounting, Organizations and Society, [online] 17(7), pp.667-684.
37. Rocco R. Vanasco (1994) "The IIA Code of Ethics: An International Perspective", Managerial Auditing Journal, Vol. 9 No. 1, pp. 12-22
38. Schein, E. (2009). Organizational culture. American Psychologist, 45(2), pp.109-119.
39. Shafer, W. and Simmons, R. (2011). Effects of organizational ethical culture on the ethical decisions of tax practitioners in mainland China. Accounting, Auditing & Accountability Journal, 24(5), pp.647-668.
40. Woodbine, G.F. and Liu, J., 2010. Leadership styles and the moral choice of internal auditors. EJBOElectronic Journal of Business Ethics and Organization Studies.
Downloads
Published
Issue
Section
License
Copyright (c) 2020 AUTHOR
This work is licensed under a Creative Commons Attribution 4.0 International License.
You are free to:
- Share — copy and redistribute the material in any medium or format for any purpose, even commercially.
- Adapt — remix, transform, and build upon the material for any purpose, even commercially.
- The licensor cannot revoke these freedoms as long as you follow the license terms.
Under the following terms:
- Attribution — You must give appropriate credit , provide a link to the license, and indicate if changes were made . You may do so in any reasonable manner, but not in any way that suggests the licensor endorses you or your use.
- No additional restrictions — You may not apply legal terms or technological measures that legally restrict others from doing anything the license permits.
Notices:
You do not have to comply with the license for elements of the material in the public domain or where your use is permitted by an applicable exception or limitation .
No warranties are given. The license may not give you all of the permissions necessary for your intended use. For example, other rights such as publicity, privacy, or moral rights may limit how you use the material.
