Potential independent variable iv self certification

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Potential Independent Variable (IV): Self-certification (present, absent), prior dysfunctional behavior (present,
absent)
Motivation/Pressure
Misreporting of Accounting Information
±
Informal communication of management goals and preferences can have significant impact on employee behavior, even
when nonbinding. Thus, how important is it for auditors to understand the more informal goals and objectives of
management to understand the motivation of employees to engage in (or not engage in) dysfunctional behaviors?
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Potential Independent Variable (IV): informal managerial goals communicated to employees (present, absent),
formal organizational goals (present, absent)
± Scarcity of resources leading to high levels of competition between managers to access these resources tends to reduce
their tendency to request more resources than they need. Thus, should audit risk be evaluated as higher in settings where
competition for scarce resources is low rather than high?
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Potential Independent Variable (IV): level of internal organizational competition for scarce resources (low,
moderate, high)
± About half of subordinates who are pressured by their superiors to misreport will do so. Thus, to what degree do auditors
need to understand the nature of the relationship between superiors and subordinates in the organization in terms of
power and pressure to comply? Does this increased knowledge allow auditors to better understand the likelihood that
misreporting has occurred?
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Potential Independent Variable (IV): level of employee commitment to manager (low, moderate, high), level of
employee engagement with governance body (low, moderate, high)
± To what extent do non-profit organizations face similar pressures as for-profit managers to achieve financial targets and
goals? If pressure is high, to what extent does this impact the auditor’s evaluation of inherent risk assessment?
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Potential Independent Variable (IV): number of external stakeholders for the non-profit (low, moderate, high),
Dysfunctional Behavior in Organizations: Insights from the Management Control Literature 139
Auditing: A Journal of Practice & Theory
Volume 37, Number 4, 2018

importance of external stakeholders to funding level for the non-profit (low, moderate, high), significance of
governmental funding to the non-profit (low, moderate, high)
Being Complicit in Accounting Manipulation
±
How is the risk of material misstatement impacted by the potential that a superior pressures subordinates to engage in
dysfunctional behavior? For example, individual personality traits may impact the way in which superiors and
subordinates interact.
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Potential Independent Variable (IV): level of narcissism displayed by manager (low, high), gender of the manager,
leadership style of the manager
±
It is important to understand the relationships between C-Suite managers in organizations because CEOs pressuring
CFOs to meet targets or benchmark expectations is an important predictor of accounting manipulation.