THE EFFECT OF INTERNALIZATION OF LOCAL CULTURE ON AUDITOR'S SKEPTICISM

Authors

  • Monika Handojono Politeknik Negeri Ambon, Indonesia
  • Theofilus J F K Matrutty Politeknik Negeri Ambon, Indonesia

DOI:

https://doi.org/10.29040/ijebar.v5i2.2629

Abstract

For several hundred years tribes in the Maluku of Eastern Indonesia have followed the cultural practice of pela-gandong. Pela-Gandong is a form of brotherhood between two or more villages, with its foundation being in blood relationships. Socially, pela-gandong is acknowledged as beneficial in spreading peace and harmony among differing ethnic groups. However, the practice raises questions of its influence on specific professional roles such as auditing. Using Self-Determination Theory, this study examines the impact of pela-gandong on an auditor’s personal values, particularly the need for impartial auditor skepticism. By collecting data from 69 auditors across three local government municipalities and one city in Maluku, the findings suggest that the personal value (openness to change) and internalization of Pela–Gandong decreases auditor skepticism. The study recommends the need to further develop an approach that will increase auditors’ awareness of cultural issues.

References

Abdolmohammadi, M. J. (2012). Chief audit executives’ assessment of internal auditors’ performance attributes by professional rank and cultural cluster. Behavioral Research in Accounting. https://doi.org/10.2308/bria-50023

ACFE. (2006). Report to the nation on occupation fraud and abuse. In Hospitals.

Agarwal, G. K., & Medury, Y. (2014). Internal auditor as accounting fraud buster. The IUP Journal of Accounting Research & Audit Practices.

Aikins, S. K. (2011). An examination of government internal audits’ role in improving financial performance. Public Finance and Management. https://doi.org/http://dx.doi.org/10. 1108/17506200710779521

Alzeban, A. (2015). The Impact of Culture on the Quality of Internal Audit: An Empirical Study. Journal of Accounting, Auditing and Finance. https://doi.org/10.1177/0148558X14549460

Au, A. K. M., & Wong, D. S. N. (2000). The impact of Guanxi on the ethical decision-making process of auditors - An exploratory study on Chinese CPAs in Hong Kong. Journal of Business Ethics. https://doi.org/10.1023/A:1006117021164

Chan, K. H., Lin, K. Z., & Mo, P. L. L. (2003). An empirical study on the impact of culture on audit-detected accounting errors. Auditing. https://doi.org/10.2308/aud.2003.22.2.281

Charron, K. F., & Lowe, D. J. (2008). Skepticism and the Management Accountant: Insights for Fraud Detection. Management Accounting Quarterly.

Chirkov, V., Ryan, R. M., Kim, Y., & Kaplan, U. (2003). Differentiating Autonomy From Individualism and Independence: A Self-Determination Theory Perspective on Internalization of Cultural Orientations and Well-Being. Journal of Personality and Social Psychology. https://doi.org/10.1037/0022-3514.84.1.97

Everett, J., & Tremblay, M. S. (2014). Ethics and internal audit: Moral will and moral skill in a heteronomous field. Critical Perspectives on Accounting. https://doi.org/10.1016/j.cpa. 2013.10.002

Gramling, A. A. (1999). External Auditors’ Reliance on Work Performed by Internal Auditors: The Inf...: EBSCOhost. Auditing: A Journal of Practice & Theory.

Hofstede, G. (1984). Cultural dimensions in management and planning. Asia Pacific Journal of Management. https://doi.org/10.1007/BF01733682

Hughes, S. B., Sander, J. F., Higgs, S. D., & Cullinan, C. P. (2009). The impact of cultural environment on entry-level auditors’ abilities to perform analytical procedures. Journal of International Accounting, Auditing and Taxation. https://doi.org/10.1016/j.intaccaudtax. 2008.12.004

Hulland, J. (1999). Use of partial least squares (PLS) in strategic management research: a review of four recent studies. Strategic Management Journal. https://doi.org/10.1002/(sici)1097-0266(199902)20:2<195::aid-smj13>3.3.co;2-z

Hurtt, R. K. (2010). Development of a scale to measure professional skepticism. Auditing. https://doi.org/10.2308/aud.2010.29.1.149

Jeffrey, C., Dilla, W., & Weatherholt, N. (2004). The Impact of Ethical Development and Cultural Constructs on Auditor Judgments: A Study of Auditors in Taiwan. Business Ethics Quarterly. https://doi.org/10.5840/beq200414322

Jiang, T., & Gore, J. S. (2016). The relationship between autonomous motivation and goal pursuit: A cross-cultural perspective. Asian Journal of Social Psychology. https://doi.org/10.1111/ajsp.12115

Kathy Hurtt, R., Brown-Liburd, H., Earley, C. E., & Krishnamoorthy, G. (2013). Research on auditor professional skepticism: Literature synthesis and opportunities for future research. Auditing. https://doi.org/10.2308/ajpt-50361

Lee, C., & Welker, R. B. (2007). The Effect of Audit Inquiries on the Ability to Detect Financial Misrepresentations. Behavioral Research in Accounting. https://doi.org/10.2308/bria.2007.19.1.161

Lin, K. Z., & Fraser, I. A. M. (2008). Auditors’ ability to resist client pressure and culture: Perceptions in China and the United Kingdom. Journal of International Financial Management and Accounting. https://doi.org/10.1111/j.1467-646X.2008.01020.x

McCoy, N., Burnett, R. D., Friedman, M. E., & Morris, M. (2011). Internal audit: How to develop professional skepticism. Journal of Corporate Accounting & Finance. https://doi.org/10.1002/jcaf.20684

Nelson, M. W. (2009). A model and literature review of professional skepticism in auditing. Auditing. https://doi.org/10.2308/aud.2009.28.2.1

Nicolǎescu, E. (2013). Internal auditors’ role in detecting fraud. Contemporary Readings in Law and Social Justice.

Ouellet, N. (2010). The Political Realm of Internal Auditing. Internal Auditor.

Patel, C., Harrison, G. L., & McKinnon, J. L. (2002). Cultural influences on judgments of professional accountants in auditor-client conflict resolution. Journal of International Financial Management and Accounting. https://doi.org/10.1111/1467-646X.00077

Roussy, M. (2015). Welcome to the day-to-day of internal auditors: How do they cope with conflicts? Auditing. https://doi.org/10.2308/ajpt-50904

Ryan, R. M., & Connell, J. P. (1989). Perceived Locus of Causality and Internalization: Examining Reasons for Acting in Two Domains. Journal of Personality and Social Psychology. https://doi.org/10.1037/0022-3514.57.5.749

Ryan, R. M., & Deci, E. L. (2000). Self-determination theory and the facilitation of intrinsic motivation, social development, and well-being. American Psychologist. https://doi.org/10.1037/0003-066X.55.1.68

Schwartz, S. H. (1992). Universals in the content and structure of values: Theoretical advances and empirical tests in 20 countries. Advances in Experimental Social Psychology. https://doi.org/10.1016/S0065-2601(08)60281-6

Schwartz, S. H. (2006). Basic Human Values : An Overview Basic Human Values : Theory , Methods , and Applications Introduction to the Values Theory. Jerusalem Hebrew University. https://doi.org/10.1080/026999499377664

Schwartz, S. H., & Boehnke, K. (2004). Evaluating the structure of human values with confirmatory factor analysis. Journal of Research in Personality. https://doi.org/10.1016/S0092-6566(03)00069-2

Downloads

Published

2021-06-28

How to Cite

Handojono, M., & Matrutty, T. J. F. K. (2021). THE EFFECT OF INTERNALIZATION OF LOCAL CULTURE ON AUDITOR’S SKEPTICISM. International Journal of Economics, Business and Accounting Research (IJEBAR), 5(2). https://doi.org/10.29040/ijebar.v5i2.2629

Issue

Vol. 5 No. 2 (2021): IJEBAR, VOL. 05 ISSUE 02, JUNE 2021

Section

Articles

Citation Check

License

Authors who publish with IJEBAR agree to the following terms: Authors retain copyright and grant the IJEBAR right of first publication with the work simultaneously licensed under a Creative Commons Attribution License (CC BY-SA 4.0) that allows others to share (copy and redistribute the material in any medium or format) and adapt (remix, transform, and build upon the material) the work for any purpose, even commercially with an acknowledgement of the work's authorship and initial publication in IJEBAR. Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgement of its initial publication in IJEBAR. Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work (See The Effect of Open Access).