Audit Quality and Integrity Culture: the Mediating Role of Auditor Work Stress and the Audit Support System among the Post-Internship Malaysian Students

Yeap, Eu Jane (2022) Audit Quality and Integrity Culture: the Mediating Role of Auditor Work Stress and the Audit Support System among the Post-Internship Malaysian Students. Masters thesis, Tunku Abdul Rahman University College.

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Abstract

Following the past few decades, repeated accounting scandals that centre around greed have brought the issue of audit quality to the public’s attention as they are the product of auditing, accounting and corporate governance failures. However, although in 2021, much attention was drawn to the unprecedented Covid-19 pandemic that has disrupted most professions worldwide, auditing is no exception. In line with the current situation, this research investigates the determinants of audit quality by considering the Covid-19 disruptions on audit practices and behavioural influences and examined the relationship between integrity culture, audit support systems, work stress, and audit quality. This research was performed according to the social learning theory and the job demand-control-support model and adopted a quantitative research design through the dissemination of an online questionnaire. Using the purposive sampling technique, 138 responses were gathered from students who have undergone six months of industrial training in audit-related fields. The findings were subsequently analyzed using Statistical Package for Social Sciences (SPSS) software, and IBM SPSS AMOS was used to conduct the mediation analysis. It was revealed that integrity culture and audit support systems share a significant positive relationship among themselves while also significantly and positively related to audit quality. On the other hand, integrity culture established a significant and positive impact on work stress, whereas audit support systems negatively influence work stress. It was also concluded that work stress was proven to be insignificant in affecting audit quality. In terms of testing for mediation effects, findings evinced that work stress does not mediate the relationship between integrity culture and audit quality and between audit support systems and audit quality. Last but not least, audit support systems were also found to be an insignificant mediator between integrity culture and audit quality. In summary, this research affirmed that integrity culture is positively related to audit quality, stressing the need for employers to foster a culture of integrity within the organization. Moreover, this research also contributed a deeper understanding of how the audit support systems can act as a stress reliever in the current pandemic situation, not to mention improving audit quality. It also highlights that organizations should consider devoting more efforts to providing appropriate means of support to their employees in the face of the hardships throughout this Covid-19 outbreak.