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Dysfunctional
Analysis of factors affecting audit behavior
dysfunctional audit behavior
in Malaysia
Razana Juhaida Johari
Faculty of Accountancy, Universiti Teknologi MARA, Shah Alam, Malaysia
Received 27 July 2021
Nurul Afifah Mohd Hairudin Revised 8 September 2021
12 January 2022
Esco Micro (M) Sdn Bhd, Shah Alam, Malaysia, and Accepted 7 February 2022

Ayub Khan Dawood

School of Social Sciences and Humanities, B.S. Abdur Rahman Crescent Institute
of Science and Technology, Vandalur, India

Abstract
Purpose – The financial scandals in Malaysia have caused auditors to be convicted of such failure and led
to the claims that they were involved in dysfunctional audit behavior. The incidences have worsened the
profession’s credibility and deteriorated the public confidence on the profession. This study aims to examine
the influence of professional skills, independence, work experience, time budget pressure on dysfunctional
audit behavior.
Design/methodology/approach – This study collected primary data based on a questionnaire survey
among audit firms in the Klang Valley area and registered with Malaysian Institutes of Accountants.
Findings – The findings from a survey conducted on 130 Malaysian auditors proved that time budget
pressure is significantly influenced the dysfunctional audit behavior. However, this study did not support the
relationship between professional skills, independence, work experience and dysfunctional audit behavior.
Originality/value – This study contributed to the researchers, auditors as well as educators in further
understanding the factors that might influence the dysfunctional audit behavior. The findings are expected to
help in improving the auditors’ credibility and uphold the public confidence on the auditing profession.
Keywords Independence, Professional skills, Work experience, Time budget pressure,
Dysfunctional audit behaviour
Paper type Research paper

1. Introduction
Auditors provide an important service in auditing the financial statements of the company
and offering reasonable assurance that they are reported reasonably and in compliance with
the Generally Accepted Accounting Principles (GAAP). They provide a true representation
of the financial position of the company in a trustworthy manner, so it can be reliable and
gain a better market share. Audit function is important to provide credibility to the financial
reports and reduce the risk of finding that financial reports are deceptive, unreliable,
incomplete and contain material misstatement.

International Journal of Ethics and

The authors gratefully acknowledge the Faculty of Accountancy, Universiti Teknologi MARA, Shah Systems
Alam, Malaysia and B.S. Abdur Rahman Crescent Institute of Science and Technology, Vandalur, © Emerald Publishing Limited
2514-9369
India for all supports and resources. DOI 10.1108/IJOES-07-2021-0151
IJOES Without doubt, it is crucial that auditors need to perform their duties in an ethical manner,
independently, thoroughly and diligently, without any bias as to ensure that they are not
engaged in any dysfunctional audit behavior that may distort their profession. The auditors are
representatives of trusted profession, and they should protect the public interest as a whole.
The completion of auditors’ fiduciary responsibilities and the trust of the public serve as the
base for the auditors to deliver their duties in a highly ethical way (Johari et al., 2021), without
involving any dysfunctional audit behavior. However, past studies have established that
dysfunctional audit behavior leads to the reduction of audit quality that might due to the
stressful environment of having tight managerial control in the audit firms (Otley and Pierce,
1995; Paino et al., 2012; Amroabadi et al., 2014; Balasingam et al., 2019).
It is highly likely that the auditors are involved with dysfunctional audit behavior due to
the constant encounter of complex, varied and interrelated tasks (Tjan et al., 2019). This
highly complex audit arising from the increasing difficulties and level of uncertainty in the
audit process that makes the auditors feel stressful and engage into dysfunctional audit
behaviors (Margheim et al., 2005; Tjan et al., 2019). The dysfunctional audit behavior gives
impact on both the organizations and public at large. There are several definitions on
dysfunctional audit behavior. For example, dysfunctional audit behavior is defined as a
violation of audit procedures and audit programs that have been established (Donnelly et al.,
2003). It is also known as a set of actions or behaviors that reduce the quality of audit (Paino
et al., 2010, 2012, 2014; Syam et al., 2020) and happened due to poor understanding and
compliance of auditors with Auditing Standards, Financial Accounting Standards and
Professional Accounting Standards.
According to a survey by KPMG in 2016, among the top concerns of Chief Executive
Officers today is the quality of auditing work performed by the auditors. Audit quality is
crucial, as it may affect the reliability of the financial report and protects the interest of its users
as well as it is an important element to the client management in deciding whether to continue
with the auditor’s services. Therefore, the audit firm should be concerned with their auditors to
provide high-quality services to the clients. Furthermore, both investors and other corporate
financial reporting stakeholders are dissatisfied because audit failures and poor audit quality
are on the rise in Malaysia, owing to dysfunctional audit behavior and non-compliance with
auditing standards, which can lead to poor audit quality and fraudulent activities. Therefore, in
preventing such impact of dysfunctional audit behavior on the organizations and the whole
public, an understanding on how it is caused and how to improve it through the identifying
factors that might influence the audit behavior is relevant and demanded.
Empirically, dysfunctional audit behavior can be influenced by factors that arise from
the individual auditors. In addition, studies in psychology stated that individual behavior
demonstrates the personality of the individual and situational variables when making a
particular decision at a certain time (Masita and Sari, 2021; Koonce and Mercer, 2005).
Therefore, it can be concluded that the auditors’ action to accept dysfunctional audit
behavior in completing their audit work can be caused by various factors inherent to the
individual auditors such as gender, locus of control, self-rated performance, turnover
intentions, ethical judgment, organizational commitment and professional commitment. It
can also be caused by situational factors within their working environment, e.g. ethical
climate, peer influence, managerial influence, size of organization and job level (Kelley and
Margheim, 1990; Srimindarti and Widati, 2015). Apart of the mentioned factors, there are
four factors that require further investigations as they provided various findings on one’s
decision or behavior. These factors are auditors’ professional skills, auditors’ independence
and auditors’ work experience that represent the individual factors, while time budget
pressure represents the situational factor.
2. Literature review and hypotheses development Dysfunctional
2.1 Theoretical foundations of the study audit behavior
This study’s framework is based on the theory of inspired confidence and the work
stress model theory. Limperg’s (1932) The theory of inspired confidence suggests that
the auditors’ ability to detect any misrepresentation in the clients’ financial statements
is based on the individual’s factors, which are represented in this study by the auditors’
professional skills, auditors’ independence and auditors’ work experience. Independent
auditors are necessary to gain the trust of financial reporting users, particularly when
describing any error or breach in the client’s business. As a result, auditors must be
impartial, skilled and experienced to offer a reasonable assurance audit conclusion.
Ismail et al. (2020) confirmed the inspired confidence’s theory in connection to auditors’
working environment in a study. It has been established that the greater the auditors’
independence, professional capabilities and experience, the better the auditors’
performance in providing truthful audit opinions and the capacity to gain the trust of
financial statement and audit report users. As a result, using this theory to support the
variables in the current study is deemed appropriate.
Furthermore, the use of a situational variable (i.e. time budget pressure) in this study
is based on Palmer et al. (2003) work stress model theory. Stress is a reaction to a
change in the environment or a request that places more psychological and physical
demands on someone than is necessary (Gibson et al., 1995). To put it another way,
stress is a state in which a person, as well as his soul, feels pressure on himself that is
beyond his capabilities. According to a study done by Kesuma and Dwirandra (2019),
tight time budgets can induce stress to auditors when completing audit work, which
can subsequently alter attitudes, intentions and behaviors in the implementation of
audit programs.

2.2 Professional skills and dysfunctional audit behavior

Every profession, especially those providing services to the community, needs specific
knowledge and skills, and it is anticipated that each profession should have a certain
personal quality. Professional auditor, as a profession that offers assurance services and
audit opinion to the public about historical financial report information, is expected to have
appropriate audit and accounting knowledge, skills as well as personal qualities. These
personal qualities are to be expressed in their professional behavior. Auditors’ professional
behavior includes avoiding dysfunctional audit behavior (Pujaningrum and Sabeni, 2012).
Auditors’ professional skills also include knowledge vision, continuous audit learning
and environmental audit skill, which will affect dysfunctional audit behavior (Thongchai
and Ussahawanitchakit, 2015). If auditors have high professional skills, the tendency of
auditors to be involved in dysfunctional audit behavior will be lower. Thus, in their study,
Thongchai and Ussahawanitchakit (2015) concluded a significant relationship between
professional skills and dysfunctional audit behavior. However, it contradicts with other
studies’ findings (Carolita and Rahardjo, 2012; Soraya and Utomo, 2014; Darayasa and
Wisadha, 2016), which found that professional skill has no effect on dysfunctional audit
behavior. Their study showed that auditors with or without professional skills will not give
an impact on auditors’ behavior in conducting audit works. Therefore, based on the
inconsistent result of previous research, the following hypothesis is developed:

H1. There is a significant relationship between auditors’ professional skills and

dysfunctional audit behavior.
IJOES 2.3 Independence and dysfunctional audit behavior
Independence means:

the auditors’ presence of dignity and fairness in evaluating evidence; and

objective consideration in formulating and addressing their opinion.

Independent auditors would also be better in revealing higher empirical evidence than non-
independent ones. Johari et al. (2017) emphasized that independence is the most critical issue
in audit profession. In addition, Abdul Rashid et al. (2017) noted that the independence of an
auditor may be affected if the auditor also offers non-audit services apart from audit services
to the same company. This is causing somewhat of a dilemma to the concerned auditor and
may in fact lead to their independence being questioned.
Based on the previous research, there are inconsistent findings in the relationship
between independence and dysfunctional audit behavior. Yuen et al. (2013) stated that there
is a negative relationship between auditors’ independence and the acceptance of
dysfunctional audit behavior. Research studies conducted by Sulistiyo et al. (2018) also
supported that independence negatively affects dysfunctional audit behavior. Auditors with
high independence tend to avoid deviant behaviors that are inconsistent with the
professional values in the work. It is likely that dysfunctional audit behavior, which would
degrade the quality of the audit work, will be avoided by the auditors in completing audit
work. However, Johari et al. (2017), Levitt and Dwyer (2002) and DeAngelo (1981) stated that
there is positive relationship between independence and dysfunctional audit behavior. Their
studies showed that independence can become a threat that compromises auditors’
independence, thereby potentially leads to dysfunctional audit behavior. Therefore, based
on the inconsistent result of previous research, the following hypothesis is developed:

H2. There is a significant relationship between auditors’ independence and

dysfunctional audit behavior.

2.4 Work experience and dysfunctional audit behavior

Work experience can be defined as the ability possessed by the auditors in carrying out and
completing the tasks assigned to them. Experience is also known as an education phase and
the addition of potential developmental behavior from both formal and non-formal
education can be interpreted as a process that brings one to a higher behavioral pattern.
Mayasari (2017) proved that work experience has a significant positive effect on auditors’
behavior and supply chain. The study showed a unidirectional relationship between the
experience and the implementation of auditors’ behavior and supply chain. In other words,
auditors with more experience will show better behavior in conducting audit works as
compared to auditors without experience.
In addition, the empirical evidence on other similar areas and the underlying concepts of
the theory of planned behavior (TPB) supported the argument about the influence of
experience on dysfunctional audit behavior by auditors. Besides that, prior research by
Libby and Frederick (1990) showed that auditors with experience in special areas will
outperform those who do not have experience. Work experience can boost the auditors’
ability to do audit works faithfully without being involved in dysfunctional audit behavior.
The work experience of the auditor can be determined by length of time and the number of
tasks the auditors have carried out. Both of these will improve the auditors’ expertise in
performing the audit and reduce dysfunctional audit behavior. However, Coram et al. (2003)
found that work experience has no effect on dysfunctional audit behavior. Their study
showed that whether the auditors are experienced or inexperienced, it will not give an Dysfunctional
impact toward their behavior in conducting audit works. Therefore, based on the audit behavior
inconsistent result of previous research, the following hypothesis is developed:

H3. There is a significant relationship between auditors’ work experience and

dysfunctional audit behavior.

2.5 Time budget pressure and dysfunctional audit behavior

Time budget pressure is one of the perceived pressures that potentially reduce auditors’
performance in performing audit works (Al Kautsar, 2016). The same subject was revealed
by Coram et al. (2003) in which time budget pressure is a sort of timing problem, which is
frequently occurring and faced by the professional accountant because it is associated with
limited of time and the volume of audit work. Auditors who fail to meet the time budget
dispose rated score poorly on the boss as the time budget pressure will influence the
auditors’ performance in conducting audit works. DeZoort and Lord (1997) claimed that time
budget pressure could cause the auditors to feel the stress in executing audit program. As a
result, time imbalance allocated by the time needed to complete audit works could further
induce auditors to undertake dysfunctional audit behavior.
Based on the research conducted by Cook and Kelley (1988), it has been proven that time
budget pressure has a positive influence on dysfunctional audit behavior. Research studies
conducted by Paino et al. (2012) and Al Kautsar (2016) also supported that if the auditors
face high time budget pressure, the tendency of auditors to perform dysfunctional audit
behavior in conducting audit works is increased. However, recent research by Nehme et al.
(2021) found that despite of the time budget pressure, auditors are not willing to perform
superficial reviews or to accept light evidence from clients. Therefore, based on the
discussion above, the following hypothesis is developed:

H4. There is a significant relationship between time budget pressure and dysfunctional
audit behavior.

3. Methodology
3.1 Sampling and data collection
The focus of this study is to identify the factors that contribute to dysfunctional audit
behavior. Therefore, the data were collected from the auditors who worked with audit firms
in Klang Valley area and registered with Malaysian Institutes of Accountants (MIA). Klang
Valley has been selected for the area of this study because this area contributes the largest
number of audit firms in Malaysia. Data for this study are collected through distributing the
questionnaires to the selected auditors comprised of four levels, i.e. audit partner, audit
manager, audit senior and audit junior. The four levels of auditors were used to represent
the respondent’s current position in the audit firms, and these are the common position
levels that have been used in the past studies such as Johari et al. (2021) and Ismail et al.
(2020).
Although the unit of analysis of this study is individual, i.e. auditor, there is no sampling
frame available for them. As such, the sampling frame is based on the number of member
firms in Klang Valley, i.e. 307 firms as of 30 June 2019 (retrieved from the MIA website). The
same approach was done in Johari et al. (2017). The recommended sample size for a
population of 307 is 169 (Krejcie and Morgan, 1970). The audit firms were chosen by using a
random sampling. The numbers of respondents in the selected audit firms were multiplied
IJOES by three times to achieve the anticipated response rate about 20 to 30%, as indicated in
previous ethics studies (Johari et al., 2017; Cherry and Fraedrick, 2002). Thus, in each firm,
three auditors were required to participate, which make a total of 507 questionnaires were
distributed and 155 samples have responded. However, only 130 were usable, with total
response rate of 26%. The response rate in this study is consistent with previous studies,
which reported a response rate between 21 and 26% on Malaysian auditors (Johari et al.,
2017; Zakaria et al., 2010; Sanusi and Iskandar, 2007; Smith et al., 2005).
In distributing the questionnaires to the participants between November 2019 and
February 2020, this study has approached the partner or the person in-charge of the selected
audit firms. The questionnaires were either posted or handed to the respective person
in-charge, with a cover letter stating the study objectives and assuring anonymity and
confidentiality. In addition, a return stamped, self-addressed envelope was also
enclosed. The person in-charge will then help to distribute the questionnaires to individual
auditors. Three weeks after, a phone call was made and a follow-up letter was sent to the
person in-charge to remind him/her to collect the questionnaires and posted or handed them
back to the researcher.

3.2 Measurement of variables

There are four independent variables under study, namely, auditors’ professional skills,
auditors’ independence, auditors’ work experience and time budget pressure. Whereas, the
dependent variable of this study is dysfunctional audit behavior. Below are the
measurement items used in this study:

Dysfunctional audit behavior is measured through one major type of dysfunctional
audit behavior, which is deemed harmful to audit quality, i.e. the premature sign-off.
A four-item of dysfunctional audit behavior instrument was adopted from Donnelly
et al. (2003) and tested by Paino et al. (2012), Herda and Martin (2016) and Anita
et al. (2018) to measure the level of auditor’s acceptance toward dysfunctional audit
behavior. The scale used for this measurement ranged from 1 to 5, in which “1”
indicated strongly disagree and “5” indicated strongly agree. The higher score
indicates that the respondents agree with the statement in the questions given.

Auditors’ professional skills were measured in accordance to the scale developed by
Behn et al. (1997) and was previously tested by Iskandar et al. (2010) and Kamuruchi
(2016). The scale used for this measurement ranged from 1 to 5, in which “1”
indicated that professional skills will not influence or affect them and “5” indicated
that professional skills will influence them.

Auditor’s independence was measured in accordance to the scale developed by
Svanberg and Ohman (2016) with the same scale ranging from 1 to 5, in which “1”
indicated that independence will not influence or affect them and “5” indicated that
independence will influence them.

Time budget pressure was measured in accordance to the scale developed by Otley and
Pierce (1996) and was tested by Paino et al. (2010). The scale used for this measurement
ranged from 1 to 5, in which “1” indicated that time budget pressure will not influence or
affect them and “5” indicated that time budget pressure will influence them.

Work experience was operationalized with the ranking of auditors’ current position
in the audit firm representing audit junior, audit senior, audit manager and audit
partner and measured as a categorical variable.

All the measurement items are in Appendix.

4. Findings and discussions Dysfunctional
4.1 Demographic information audit behavior
Demographic information is the descriptive data that is used to explain the characteristics of
the sample. In the last section of the questionnaire, the respondents were asked about their
demographic information, which includes gender, age, race, qualification of academic,
current position, working experience and type of audit firm. From the data that have been
gathered, majority of the respondents were female with 70% respondents and 30% were
male respondents of the sample. This analysis proved that the auditing field is being
dominated by females. Most of them were from 21 to 30 years old with 86% and the lowest
percentage was 41 to 50 years old with 0.8%. In addition, majority of the respondents were
Malays with 99%, while both Chinese and Indians shared the same lowest percentage
with 1%.
From the analysis, most of the respondents were degree holders with 79% and only three
respondents held a master degree. For respondent’s current position, 56% of them are audit
junior, 29% audit senior, 10% are audit managers and only 5% are audit partners. The data
also identified that majority of the respondents had employment experience of five years
and below with 60%, while 18% of the them had between six to ten years of employment
experience, 14% had 11 to 15 years of employment experience, and only 8% had more than
20 years of employment experience. The analysis also showed that 56% of the respondents
are in small audit firms, 40% in medium audit firms and only 4% of the respondents are
from the big four audit firms.

4.2 Descriptive analysis

Table 1 presents the descriptive statistics of variables used in this study. The mean values
of professional skill, independence and time budget pressure were 3.72, 3.57 and 3.12,
respectively. The mean value of dysfunctional audit behavior was 2.92.

4.3 Normality test

In this study, skewness and kurtosis tests were used as indicators to test the assumption of
normal distribution. The rule of thumb for normally distributed skewness and kurtosis is
that it should be between 1 and þ1. But, in some circumstances, the value between 2 and
2 can still be acceptable to determine whether the test of normality has not been violated. In
other words, the skewness must be either positive or negative skewness between 2 and 2
to be considered as the normal distribution.
Table 2 shows that the distribution of data in this study is normal because the skewness
is between 0.768 and 1.192. Meanwhile, kurtosis demonstrates the thickness of a
probability density function in the tails. The kurtosis is 0 for a standard normal data

Minimum Maximum Mean SD

PS 1.43 5.00 3.72 0.62

I 1.63 5.00 3.57 0.62
WE 0 1 0.25 0.43
TBP 1.63 4.63 3.12 0.57
DAB 1.00 4.50 2.92 0.77

Notes: Dysfunctional audit behavior (DAB), professional skills (PS), independence (I), work experience Table 1.
(WE), time budget pressure (TBP) Descriptive statistics
IJOES distribution. A “peaked” distribution indicates a positive kurtosis, and a “flat” distribution
indicates a negative kurtosis. Data can be considered normal if kurtosis falls between 3
and 3. Table 2 shows that the distribution of data is normal because the kurtosis is
between 0.588 and 1.298.

4.4 Validity test

Factor analysis is one of the methods used to reduce the large number of variables to a
smaller set of underlying factors that contain all the essential information (Pallant, 2013).
This method is used in this study to identify the underlying dimensionality of professional
skills, independence and work experience. The Scree test and the Kaiser’s eigenvalue are
used to identify the factors.
If the variable with a measure of sampling accuracy is below the acceptable level of 0.30,
the variable should be excluded from the analysis. Kaiser–Meyer–Olkin (KMO) was used to
measure sampling adequacy, while Bartlett’s test of sphericity was used to determine the
factorability of the matrix. If the Bartlett’s test of sphericity is large and significant, and the
KMO measure is greater than 0.60, factorability is assumed. In interpretation, the factor
loading 0.30 is considered to meet the minimal level; factor loading for each item with a score
value of 0.5 is considered most important; and any factor loading of 0.50 or greater is
considered practically significant (Pallant, 2013). Therefore, in this study, any factor loading
below 0.3 is eliminated as to get the most significant value. Based on the results of factor
analysis, all variables show the value of KMO is greater than 0.6. Hence, all variables were
adequate to be used in this study.

4.5 Reliability test

Reliability refers to the fact that a scale should consistently reflect the construct when data
are measured by using Cronbach’s a coefficients with the range from 0 to 1. Cronbach’s a of
above 0.70 can also be accepted, but values above 0.80 are preferable (Pallant, 2013).
Pallant (2013) stated that Cronbach’s a of below 0.70 is due to the short scale, e.g. scale with

Skewness Kurtosis
Statistic Std. error Statistic Std. error

PS 0.445 0.212 1.298 0.422

I 0.449 0.212 0.639 0.422
WE 1.192 0.212 0.588 0.422
TBP 0.768 0.212 1.270 0.422
DAB 0.386 0.212 0.279 0.422
Table 2.
Normality test of Notes: Dysfunctional audit behavior (DAB), professional skills (PS), independence (I), work experience
sample distribution (WE), time budget pressure (TBP)

PS I TBP DAB

KMO measure of sampling adequacy 0.862 0.754 0.744 0.677

Table 3. Bartlett’s test of sphericity-Approximate x 2 348.179 559.508 319.686 194.936
Factor analysis Sig 0.000 0.000 0.000 0.000
fewer than ten items. Therefore, by using reliability analysis, it can decide whether the Dysfunctional
questions being used are suitable or not to be tested. audit behavior
Table 4 shows the reliability test for this study. Cronbach’s a for professional skills was
0.850, independence was 0.780, time budget pressure was 0.790 and dysfunctional audit
behavior was 0.795. Of all the above figures, it shows that all variables contributed
positively to overall reliability because Cronbach’s a was higher than 0.70

4.6 Correlation analysis

Correlation analysis or Pearson correlation is used to describe the strength and direction of
the linear relationship between two variables. In certain cases, if the coefficient is greater
than 0.8, it is an indication of multicollinearity. Multicollinearity occurs when two or more
variables in the regression model are correlated and can create redundancy of information
on a variable. Therefore, to detect multicollinearity, Pearson correlation, tolerance and
variance inflation factor (VIF) were used in this study. Table 5 illustrates the association
between dysfunctional audit behavior and variables of professional skills, independence,
work experience and time budget pressure. Professional skill had a weak correlation with
work experience as the value was below 0.3, which was 0.105. Meanwhile, time budget
pressure variable was strongly correlated to dysfunctional audit behavior with 0.557

Reliability coefficients Cronbach’s a Standardized item a No. of items

PS 0.850 0.854 7
I 0.780 0.778 8
TBP 0.790 0.792 8
DAB 0.795 0.798 4

Notes: Dysfunctional audit behavior (DAB), professional skills (PS), independence (I), time budget pressure Table 4.
(TBP) Reliability test

DAB PS I WE TBP

DAB
Pearson correlation 1
Sig. (two-tailed)
PS
Pearson correlation 0.100 1
Sig. (two-tailed) 0.259
I
Pearson correlation 0.105 0.079 1
Sig. (two-tailed) 0.234 0.372
WE
Pearson correlation 0.010 0.278** 0.014 1
Sig. (two-tailed) 0.913 0.001 0.871
TBP
Pearson correlation 0.557** 0.117 0.236** 0.022 1
Sig. (two-tailed) 0.000 0.186 0.007 0.801

Notes: **Correlation is significant at the 0.01 level (two-tailed). Dysfunctional audit behavior (DAB), Table 5.
professional skills (PS), independence (I), work experience (WE), time budget pressure (TBP) Correlation analysis
IJOES (significant at p < 0.001). Correlation analysis is conducted to detect multicollinearity
problem, and it only exists when two or more variables are strongly correlated in which
r > 0.80 (Field, 2013). Based on Table 5, all correlations were below 0.8. Therefore, it can be
concluded that there was no serious multicollinearity problem, and none of the variables
was rejected in this study.

4.7 Regression analysis

In this study, multiple regression analysis was used to test the relationships between
dysfunctional audit behavior and auditors’ professional skills, auditors’ independence,
auditors’ work experience as well as auditors’ time budget pressure. Before multiple
regression analysis was measured, a measurement of ANOVA was used to determine the
significance of this model in predicting dysfunctional audit behavior. Based on Table 6, the
model can be used to predict dysfunctional audit behavior because the result showed a
significant value (F = 18.390, p < 0.001). Therefore, it can be concluded that there is sufficient
evidence to show that at least one independent variable exists with the dependent variable.
Table 7 shows the results of regression analysis. Overall analysis revealed that only
independence and time budget pressure had significant relationships with dysfunctional
audit behavior. Adjusted R2 indicates the percentage of independent variables that can
explain the dependent variable. From the analysis, adjusted R2 of 0.350 indicated that 35%
of the variation in the dysfunctional audit behavior can be explained by professional skills,
independence, work experience and time budget pressure. Besides that, Durbin–Watson
statistics was equal to 1.495, which was close to 2, and this indicated that the correlation of
the residual did not have any problem such as multicollinearity. Moreover, Field (2013)
stated that a good model is when the VIF is less than 10 , and tolerance is between the range

Model Sum of squares Df Mean square F Sig.

Regression 28.490 4 7.122 18.390 0.000b

Residual 48.412 125 0.387
Total 76.902 129
Table 6. Notes: Dependent variable: Dysfunctional audit behavior (DAB). bPredictors: (constant), professional
ANOVA skills, independence, work experience, time budget pressure

Variables Unstandardized coefficients Std. error t-stat p-value VIF

Constant 0.826 0.562 1.469 0.144

PS 0.019 0.093 0.199 0.843 1.114
I 0.311 0.092 3.382 0.001 1.074
WE 0.043 0.132 0.324 0.747 1.086
TBP 0.826 0.099 8.334 0.000 1.081
R = 0.609
R2 (Adjusted R2) = 0.370 (0.350)
F-statistic (p-value) = 18.390 (0.000)
Durbin–Watson statistic = 1.495
Table 7. Notes: Dysfunctional audit behavior (DAB), professional skills (PS), independence (I), work experience
Regression analysis (WE), time budget pressure (TBP)
of 0.2 and 0.9. In other words, multicollinearity problem only exists when the VIF is greater Dysfunctional
than 10. In this study, VIFs for all the variables were below 10. This indicates that the audit behavior
variables are suited to predict the independent variables and the variables are not biased.
Besides, multicollinearity problem does not exist.
Empirically, based on the regression analysis that has been conducted, professional
skills and work experience were found to have no influence on dysfunctional audit behavior.
The coefficient for professional skills was 0.019, t = 0.183, p = 0.199. Meanwhile, the
coefficient for work experience was 0.043, t = 0.324, p = 0.747. From the analysis, it is
figured out that there was a significant positive relationship between independence and
dysfunctional audit behavior with the p-value of 0.001 (p < 0.05). Table 7 also provides
evidence that there was a significant positive relationship between time budget pressure and
dysfunctional audit behavior with the p-value of 0.000 (p < 0.001).

5. Discussions of findings
This study is conducted to examine the relationship between professional skills,
independence, work experience, time budget pressure and dysfunctional audit behavior. The
questionnaires were distributed to the auditors who worked with audit firms in the Klang
Valley area and registered with MIA. H1 predicts a significant relationship between
professional skills and dysfunctional audit behavior. Based on the results, it was found that
there is no significant relationship between professional skills and dysfunctional audit
behavior. Therefore, H1 is rejected. This finding is consistent with the findings from Carolita
and Rahardjo (2012); Priyansari and Natalistyo (2014); Utomo (2014); as well as Darayasa and
Wisadha (2016). However, it is contradicted with the finding from Thongchai and
Ussahawanitchakit (2015) who found a significant relationship between professional skills
and dysfunctional audit behavior. In this study, auditors’ professional skills showed no
significant relationship with dysfunctional audit behavior, and this might be due to the reason
that majority of the respondents are audit juniors. They have low professional skills as they
only have 1–5 years of working experience, and they need to learn a lot of things to become an
expert in auditing field and perform accordingly toward any dysfunctional audit behavior.
H2 predicts a significant relationship between independence and dysfunctional audit
behavior. Based on the analysis, it is discovered that there is a significant positive
relationship between independence and dysfunctional audit behavior. Therefore, H2 is
accepted. The findings indicated that the higher the auditors’ independence, the more they
accept dysfunctional audit behavior. This finding is inconsistent with the findings from
Desmond et al. (2013) and Sulistiyo et al. (2018) who found a significant negative relationship
between independence and dysfunctional audit behavior. However, DeAngelo (1981) had
also claimed that auditor independence can be compromised within certain situations. In
other words, the auditors’ independence has become a threat to the auditors.
The result of this study interpreted that auditors could also engage in dysfunctional audit
behavior in certain situations that might give threat to their careers if they did not do so. This
finding is supported by a study from Johari et al. (2017), Moore et al. (2006) and Levitt and
Dwyer (2002) where they also found a positive impact of independence threats on auditors’
behavior. Thus, Johari et al. (2017) suggested that audit firms should ensure their auditors are
explicitly evaluated in terms of independence risks to enhance the auditors’ awareness as well
as to address any potential independence threats before initiating their duties. This is because
independence threats could trigger them in getting involve with dysfunctional audit behavior.
H3 also suggests a significant relationship between work experience and dysfunctional
audit behavior. However, based on the analysis, it was revealed that there is no relationship
between work experience and dysfunctional audit behavior. Therefore, H3 is rejected. This
IJOES finding contradicts with the finding from the study by Mayasari (2017) who found a
significant positive relationship between work experience and auditors’ behavior. Yet, this
finding is consistent with Coram et al. (2003) who found that work experience has no effect
on dysfunctional audit behavior. It is a fact that the result of this study can be supported by
the majority of the respondents are the audit juniors. As the audit juniors, they might
experience difficulties in identifying approaches other than participating in dysfunctional
audit behavior due to lack of working experience in dealing with conflicts at working
environment. Mohd Nor et al. (2015) stated that auditors with lower auditing experience may
not be familiar and have lower degree of internalization of professional code of ethics, which
triggers them to conduct dysfunctional audit behavior.
H4 predicts a significant relationship between time budget pressure and dysfunctional
audit behavior. Based on the analysis, the result also revealed that there is a significant positive
relationship between time budget pressure and dysfunctional audit behavior. This finding
supports the previous findings from Cook and Kelley (1988), Heriningsih (2002), Weningtya
et al. (2006), Otley and Pierce (1996), Gundry (2006) and Al Kautsar (2016), where they also
found a significant positive relationship between time budget pressure and dysfunctional audit
behavior. When auditors carry out dysfunctional audit behavior in completing their audit work
to meet time budget, this could give bad impact on audit assurance provided by the auditors.
Moreover, audit profession will be at risk as the quality of auditors’ performances is poor.
Svanstrom (2016) indicated that audit quality is at risk when auditors faced with high level of
time budget pressure. This also proves that auditors’ adherence to audit standard is still low,
and there is poor execution of audit procedures that are not carried out optimally due to time
budget pressure in audit planning. Again, this finding might be due to majority of respondents
in this study are audit juniors; thus, this factor might influence the result of this study. Broberg
et al. (2017) stated that audit juniors experience a higher time budget pressure as they have little
education and training in audit field compared to non-audit juniors who have more experience
in handling audit work professionally without engaging in dysfunctional audit behavior.

6. Conclusions
This study provides empirical evidence on the relationship between auditors’ professional
skills, independence, work experience, time budget pressure and dysfunctional audit
behavior. Based on the samples, a set of hypotheses has been developed and tested with
several statistical analyses. The objectives of this study are to examine whether the
independent variables of auditors’ professional skills, auditors’ independence, work
experience and time budget pressure influence dysfunctional audit behavior among the
auditors in Malaysia. The regression result showed that only independence and time budget
pressure significantly influence dysfunctional audit behavior of auditors in Malaysia.
This study offers recommendations to the practitioners and academia in both aspects of
practical and theoretical. In practical aspect, this study provides information about the issue
in dysfunctional audit behavior, the recognition of professional skills, independence, work
experience and time budget pressure that are related to the auditors in Malaysia. Auditors’
dysfunctional audit behaviors can be deterred by establishing rules, guidelines and
penalties for any individuals who are involved in dysfunctional audit behavior. Therefore,
this study can be used to shape the auditors’ behavior. Meanwhile, in the theoretical aspect,
the study contributes to the academia by providing the latest literature that relates to the
issues pertaining to individual characteristics factors that influence dysfunctional audit
behavior. Besides that, this study also contributed in creating understanding and awareness
especially toward dysfunctional audit behavior issues in auditing firms. With this study,
auditors’ awareness can be improved as it provides an overview on the factors that influence
auditors’ dysfunctional audit behavior, especially for the audit juniors. In addition, the Dysfunctional
findings could provide several recommendations to auditors, audit firms and professional audit behavior
bodies. For example, promoting good firm culture can enhance auditors’ awareness, while
imposing strict penalties and enforcement in the audit in firms by professional bodies can
prevent dysfunctional audit behavior.
This study has been conducted with some limitations that could be improved in future
study. Firstly, as this study used random sampling method and managed to gather
respondents whom majority are from the audit juniors that might have influenced the findings,
future studies might improve this by using another sampling method. In addition, the sample
only included auditors’ who worked in Klang Valley that were selected randomly. Therefore,
the selection of the respondents from the big four audit firms was small.
For future study, it is advisable to imitate and use more varied samples of target
respondents that focus on all auditors in Malaysia so that the results could be generalized.
Another limitation is this study only examined four independent variables, which included
professional skills, independence, work experience and time budget pressure, in measuring
auditors dysfunctional audit behavior that might have limited the observation. Further study
is also needed to explore on the relationship between religiosity and auditors’ dysfunctional
audit behavior, as the religiosity act as an internal guidance for the auditors that can prevent
them from acting unethically, as suggested in Bonabi and Hafezi (2021). There are also other
individuals and situational factors that could influence the auditors’ dysfunctional audit
behavior such as locus of control, employee performance and turnover intentions.

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Further reading
Hamilton, L.C. (2009), Statistics with STATA – Update for Version 10, Brooks/Cole, Belmont, CA.
Johari, R.J., Mohd-Sanusi, Z., Rahman, R.A. and Omar, N. (2013), “Auditors’ independence, experience and
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ethics, and time budget pressure on audit quality”, Jurnal Akuntansi and Auditing Indonesia,
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Salehi, M., Seyyed, F. and Farhangdoust, S. (2020), “The impact of personal characteristics, quality of
working life and psychological well-being on job burnout among iranian external auditors”,
International Journal of Organization Theory and Behavior, Vol. 23 No. 3, pp. 189-205,
doi: 10.1108/IJOTB-09-2018-0104.
Appendix Dysfunctional
audit behavior
Item Factor
Variable # Item name loading

Professional Q1 I have skills and expertise in Accounting Standards and Auditing 0.556
skills Standards
Q2 I have issued an accurate and a reliable audit report 0.372
Q3 I, as an auditor, is conversant with the industry and have the expertise 0.638
to effectively audit the company
Q4 I conduct the audit field work in an appropriate manner and are of high 0.529
ethical standards
Q5 I have audited many agencies, so my ability to audit is better 0.670
Q6 I feel that my yearly service can support me in implementing audit 0.614
Q7 I have prior experience on the audit of the company 0.388
Independence Q1 When someone praises my audit client, it feels like a personal 0.822
compliment
Q2 The client’s successes are my successes 0.833
Q3 When someone criticizes my audit client, it feels like a personal insult 0.587
Q4 The length of the auditor–client relationship will not affect me in 0.734
reporting the errors made by the clients/agencies that I audit
Q5 Rotation of auditor is important to prevent from having conflict of 0.767
interest
Q6 Longer partner tenure makes the auditor depend on the same papers 0.853
and documents prepared by the client, so his/her lacks the quality in
the auditing process
Q7 Longer partner tenure makes the auditor slack in his/her work. This 0.866
increases the opportunity of not detecting the unintentional mistakes.
Thus, his/her in the auditing process lacks the audit quality
Time Budget Q1 I think, the time budgets for jobs I worked on in the last year is very 0.557
pressure easy to attain
Q2 I work harder but charge all time properly 0.746
Q3 I under-report time by working on personal time 0.429
Q4 I reduce the quality of audit work to meet the time budget 0.366
Q5 I request and obtain an increase in the time budget 0.572
Q6 I am given enough time to do what is expected of me on my job 0.712
Q7 I have too much work for one person to do in a limited of time 0.740
Q8 I think, the performance standards on my job are too high 0.635
I would be more accepting of auditors engaging in pre-mature sign-off if:
Dysfunctional Q1 I believe the audit step will not find anything wrong if completed 0.753
Table A1.
behavior Q2 On previous audits, there were no problems with this part of the client’s 0.761
systems/records List of the items
Q3 The audit supervisor shows strong concern over the time it is taking to 0.492 under each variable
complete the audit step and is putting pressure onto get it done and related loading
Q4 I believe the audit step is unnecessary 0.505 factor

About the authors

Dr Razana Juhaida Johari is an Associate Professor of Accounting at Universiti Teknologi MARA
(UiTM), Malaysia. She is a member of Chartered Accountant registered with Malaysian Institute of
Accountants, acts as a Visiting Professor in Universitas Negeri Yogyakarta, Vellore Institute of
Technology, India, and Universitas Swadaya Cirebon, Indonesia. She also serves as an Editorial
Board Member of International Business Research (IBR) Journal, Canadian Centre of Science and
IJOES Education, Journal of Public Affairs, Wiley Online Library and a fellow member of World Business
Institute (WBI), Australia. Her research area is auditing, forensic accounting, governance, accounting
ethics and education. She has published in various refereed journals and received research awards in
the international/national conferences and product innovation exhibitions. Razana Juhaida Johari is
the corresponding author and can be contacted at: razana@uitm.edu.my
Nurul Afifah Mohd Hairudin is graduated with Master in Accountancy and Bachelor’s Degree of
Accountancy from Universiti Teknologi Mara (UiTM) Malaysia. She is an Account Assistant cum
Operation Executive at Esco Micro (M) Sdn Bhd, has several years of working experiences in
preparing account for various companies in Malaysia.
Dr Ayub Khan Dawood, Professor and Dean, School of Social Sciences and Humanities, BS Abdur
Rahman Crescent Institute of Science and Technology, Chennai, has an illustrious academic career
spanning over 36 years in teaching, research and administration. He has guided 21 PhD scholars, 95
MPhil Scholars in the faculty of commerce, management and published more than 175 papers in
various refereed journals both at the national and international level. He serves as an Editorial
Member in several journals, to mention a few, International Journal of Advance Study and Research
Work, ICBE Journal of Business Studies, International Journal of Business Intelligence and
Innovations. He is a member in several professional bodies like Regional Vice President of Indian
Council for Business Education, AIMS International. Recipient of “MTC Global Award for Excellence
2019,” “Best Citizen Award for Research Excellence” by the Indus Foundations. He is a Visiting
Professor for University Negeri Indonesia and examiner for PhD thesis in several foreign universities.
His academic interests are accounting, finance and entrepreneurship.

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