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Impact of Organization Culture & Ethics on Internal Auditor Decision Making

Explore the influence of corporate culture and ethicality on internal auditors' decisions, analyzing how factors like leadership style, rule of conduct, and organizational artifacts affect decision-making processes.

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Impact of Organization Culture & Ethics on Internal Auditor Decision Making

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  1. ICHTS-2019 Presentation BEHAVIORAL ASPECT: THE IMPACT OF ORGANIZATION CULTURE AND ETHICALITY ON INTERNAL AUDITOR’S DECISION MAKING. Supervised by: MS : DHAMAYANTHI ARUMUGAM Lecturer, Asia Pacific University, Malaysia. MS: KAHYATHRI A/P SUPPIAHLecturer, Asia Pacific University, Malaysia. Presented by: ABDI HUSSEN ABDELAHI Bachelor (hons) in accounting and finance with specialism in internal auditing. Asia Pacific University of Technology and Innovation Tel : +601111677168 Email: abdihussen250@gmail.com

  2. Presentation overview RESEARCH METHODOLOGY DATA ANALYSIS FINDING AND DISCUSSION

  3. According to (Apriliani, Anggraini ZR and Anwar, 2014), Organizational Culture also known as Corporate Culture is referred to “a system of shared beliefs, values, and assumptions that show people what is appropriate and inappropriate behavior”. As in the research carried out by (Brown et al., 2003; Jennings, 2003; Moeller, 2004), Ethical principles are particularly important for internal auditors for two reasons. • First, internal Auditors are often faced with a difficult situation when they have to make a decision related to a particular ethical issue. • Second, with the current emphasis on corporate culture, it is becoming increasingly recognized that internal auditors can play a key role in strengthening business ethics and corporate integrity.

  4. A branch of the accountancy profession that has strived for professional status in its own is internal audit. Like other branches of the profession, the Institute of Internal Auditors (IIA) has a code of ethics which is designed to promote an ethical culture within internal auditing (IIA, 2000). The code sets out the principles governing integrity, objectivity, confidentiality and competency, together with rules of conduct with respect to these principles. (Ridley, 2004).

  5. STATEMENT OF THE PROBLEM

  6. Research objectives Objectives of the present research are as follows; • To study the level of impact of ethical culture on internal auditor’s decision making. • To identify the level of impact of rule of conducts on the decision making of internal auditors. • To find out the impact of leadership style on the internal auditor’s decision making. • To find out the relationship of organizational artifacts with internal auditor’s decision making.

  7. Research Questions The questions of the research is as follows: • Does Ethical culture in the organization has an impact on auditor’s decision making? • Does the leadership style of the organization influence internal auditor’s decision making? • Do the organizational Artifacts impact on the internal auditor’s decision making? • Do the rule of conducts in the organization helps or impacts internal auditor’s decision making ?

  8. Research framework

  9. Research hypothesis

  10. DEMOGRAPHIC PROFILING

  11. RELIABILITY ANALYSIS

  12. CORELATION ANALYSIS

  13. CONT….. The correlation test between Internal auditor's decision making and Ethical Culture has indicated that that there is positive and significant relationship between Internal auditor's decision making and Ethical Culture. The degree of association between the variables is 24.5 %. It also appears that positive relationship is existing between Internal auditor's decision making and Leadership style. The 44.7 % of Internal auditor's decision making is expressed by Leadership style. Correlation test between Internal auditor's decision making and Rule of conduct illustrates that the variable is correlated positively. And, the degree of associated between variables is 28.4 %. The correlation between Internal auditor's decision making and Artifacts shows that there is positive and significant relationship between Internal auditor's decision making and Artifacts. The degree of association between the variables is 46.8 %.

  14. MULTIPLE LINEAR REGRESSION • Generally, correlation coefficient (r) illustrates the relationship among dependent and independent variables where r2 indicates how many of dependent variable variation is explained by the variables that is included in the model. Finally, adjusted r2 is used to compare the models that have different independent variables. • However, the result of adjusted r2 does not interpret here since the output contains only one model

  15. RESEARCH OBJECTIVES vs findings

  16. Conclusion Based on the significance in both academic and practical consideration got by the organizational or corporate culture in the recent history, there has been a massive pulled arguments among mainly the researchers contributing into the literature of the topic. Recommendation The present quantitative study has a significance in the area of the organizational culture and ethical development of the corporate environment and among the different perspectives that this study could be significant to includes auditor’s and managements perspective as well as academic perspectives.

  17. Thanks for your attention

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