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The effects of tone at the top and coordination with external auditors on internal auditors’ fraud risk assessments

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  • Isabel Z. Wang
  • Neil Fargher

Abstract

Prior research suggests that internal auditors’ judgements are subject to management influence resulting in compromised risk assessments. This study investigates the effects of the tone at the top and coordination with external auditors on internal auditors’ fraud risk assessments. Results of an experiment involving 64 internal auditors indicate that when the tone at the top is poor, rather than favouring management, internal auditors report a higher risk of intentional misstatements and that coordination with external auditors can further reduce expectations of the incidence of intentional misstatements.

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  • Isabel Z. Wang & Neil Fargher, 2017. "The effects of tone at the top and coordination with external auditors on internal auditors’ fraud risk assessments," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 57(4), pages 1177-1202, December.
    • Handle: RePEc:bla:acctfi:v:57:y:2017:i:4:p:1177-1202
    DOI: 10.1111/acfi.12191
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    References listed on IDEAS

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    Cited by:

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    2. Majid, Hassan, 2023. "Internal Audit Effectiveness and Its Determinant Factors in Commercial Banks of Ethiopia: The Case of Bale Robe Town," OSF Preprints 2xjkd, Center for Open Science.
    3. Ariail, Donald L. & Khayati, Amine & Shawver, Tara, 2021. "Perceptions by employed accounting students of ethical leadership and political skill: Evidence for including political skill in ethics pedagogy," Journal of Accounting Education, Elsevier, vol. 55(C).
    4. Yang, Chih-Hao & Lee, Kuen-Chang, 2020. "Developing a strategy map for forensic accounting with fraud risk management: An integrated balanced scorecard-based decision model," Evaluation and Program Planning, Elsevier, vol. 80(C).

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