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Perception of the Internal and External Auditor as a Deterrent to Corporate Irregularities.

Wilfred C. Uecker¹; Arthur P. Brief²; William R. Kinney³

¹ Associate Professor of Accounting, University of Iowa 1 · ² Associate Professor of Organizational Behavior, New York University. 2 · ³ John F. Murray Professor of Accounting, University of Iowa. 3

ABSTRACT: Public outcry over widespread disclosures of corporate fraud, bribes, and illegal political contributions has resulted in greater responsibility being thrust upon both internal and external auditors for the prevention and detection of corporate irregularities. Little is known, however, concerning the potential effectiveness of the internal or external auditor in preventing corporate irregularities. In this study, it was hypothesized that an increase in the perceived "aggressiveness" of the internal and external auditor in detecting corporate irregularities would function as a deterrent. These two hypotheses were tested in a field experiment employing business managers. Neither of the hypotheses was supported. These results have important implications for the role of the internal and external auditor as "police officers" in corporate society.

DOI

10.2308/tar-4491899

Volume

56 (3)

Pages

465-478

Language

en

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