The Impact of Authentic Leadership, Corporate Ethical Values, Employee Incentives and Workload/Task Complexity on Dysfunctional Auditor Behavior

Abstract

This study is intended to explore the effect of authentic leadership, corporate ethical values, employee incentives and workload/task complexity on dysfunctional auditor behavior. The model was extended model developed by Morris (2014). This study proposes the employee incentives as moderating variable, while workload/task complexity as control variable. The data gathered from public accounting firm in Indonesia especially senior auditor. There were 124 respondents. The data was processed using Structural Equation Model (SEM) - SmartPLS 2.0. The result of the study shows that authentic leadership has negatively non-significant effect on dysfunctional auditor behavior. But, when moderated by employee incentives, the effect was negatively significant as being hypothesized. The authentic leadership has positive significant effect on corporate ethical values. The corporate ethical values has a negative significant effect on dysfunctional auditor behavior directly or when being moderated by employee incentives. The employee’s incentive has a negative significant effect on dysfunctional auditor behavior. The authentic leadership and corporate ethical values show, negatively, bigger and more significant effect when moderated by employee incentives. For future research, supervisory during audit process can be added as moderating variable.