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The impact of tone at the top and control mechanisms on the objectivity of internal auditor judgment

Wang, Zhe

Description

The purpose of this thesis is to examine the effects of tone at the top and control mechanisms on the objectivity of internal auditors' judgments. Prior empirical evidence suggests that employees' judgments can be influenced by top management through the tone at the top of the organisation. As employees, internal auditors also make judgments within the ethical climate - the tone at the top created by management. Given the important role of internal auditors in ensuring effective corporate...[Show more]

dc.contributor.authorWang, Zhe
dc.date.accessioned2018-11-22T00:04:36Z
dc.date.available2018-11-22T00:04:36Z
dc.date.copyright2014
dc.date.created2014
dc.identifier.otherb3568498
dc.identifier.urihttp://hdl.handle.net/1885/149978
dc.description.abstractThe purpose of this thesis is to examine the effects of tone at the top and control mechanisms on the objectivity of internal auditors' judgments. Prior empirical evidence suggests that employees' judgments can be influenced by top management through the tone at the top of the organisation. As employees, internal auditors also make judgments within the ethical climate - the tone at the top created by management. Given the important role of internal auditors in ensuring effective corporate governance, this thesis first investigates whether the quality of the tone at the top influences the objectivity of internal auditors' judgments on management-related fraud risk and internal control weaknesses. This thesis then investigates whether bias in internal auditors' judgments under a poor tone at the top can be mitigated by coordination between internal and external auditors, or by a high quality audit committee. This thesis includes two studies. The first study examines the objectivity of internal auditors' fraud risk assessments. The findings from an experiment involving 64 internal auditors suggest that internal auditors are more sceptical when the tone at the top is poor. The results of the coordination between internal and external auditors suggest that the existence of such coordination can be used as an effective mechanism to mitigate the influence of a poor tone on internal auditors' fraud risk assessments. The second study investigates the objectivity of internal auditors' internal control evaluations. The results from an experiment involving 80 internal auditors suggest that internal auditors' internal control evaluations are biased towards the management's favour under a poor tone at the top. The results of the quality of the audit committee indicate that the influence of a poor tone at the top on internal auditors' internal control evaluations can be mitigated by an effective audit committee with a high level of independence and expertise.
dc.format.extentxiv, 201 leaves.
dc.language.isoen_AU
dc.rightsAuthor retains copyright
dc.subject.lcshAuditing, Internal
dc.subject.lcshFraud Prevention.
dc.subject.lcshRisk management
dc.subject.lcshCorporate culture
dc.titleThe impact of tone at the top and control mechanisms on the objectivity of internal auditor judgment
dc.typeThesis (PhD)
local.contributor.supervisorFargher, Neil
local.description.notesThesis (Ph.D.)--Australian National University
local.type.statusAccepted Version
local.contributor.affiliationAustralian National University.
dc.date.updated2018-11-20T03:12:59Z
dcterms.accessRightsOpen Access
local.mintdoimint
CollectionsOpen Access Theses

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