Effect of Psychological Contract between Auditor and Audit Firm on of Quality Reducing Behavior of Auditing

Document Type : Research Paper



Audit partners' expert view is based on the files created by audit team as well as auditors’ performances. Quality reducing behavior of auditing, which is the result of auditors’ practice during audit period, could be viewed important since it reduces the effectiveness of collected evidence that at the end creates bias in the partners’ view. This research is descriptive-survey study and the theoretical issues are library based. The research administrates a questionnaire for data collection and hypotheses testing, using Pearson correlation. In this research the statistical population includes senior executive auditors who are working at the private audit firms in Iran. The results show that quality reducing behavior of professional auditing is not affected by auditors’ perception of psychological contract breach or fulfillment or organizational affective commitments. However, there is a significant relationship between auditors’ perception of psychological contract breach or fulfillment and affective commitments in one hand and quality reducing behavior of non-professional auditing in the other hand that jeopardizes audit quality by reducing coalescence, efficiency and effectiveness of audit firms indirectly.


- Allen, N. and Meyer, J. (1984). Testing the side bet theory of organizational commitment: some methodological consideration, Journal of Applied Psychology, Vol. 69, pp. 372-378.
- Allen, N. and Meyer, J. (1991). A three-component conceptualization of organizational commitment, Human Resource Management Review, Vol. 1, pp. 61-89.
- Coram, P., Ng, J., Glavovic, A. and Woodliff, D.R. (2008). The Moral intensity of reduced audit quality acts, A Journal of Practice and Theory, Vol. 27(1), pp. 127-149.
- De Angelo, L. (1981). Auditor size and audit quality, Journal of Accounting and Economics, pp. 189-199.
- Herrbach, O., (2001). Audit quality, auditor behavior and the psychological contract, The European Accounting Review, Vol. 10 (4), pp. 787-802.
- Kelley, T., and Margheim, L. (1987). The effect of audit billing arrangement on underreporting of time and audit quality reduction acts, Advances in Accounting, Vol. 5, pp. 221-233.
- Kelley, T.and Seiler, R. E. (1982). Auditor stress and time budgets, The CPA Journal (December). pp. 24-34.
- Malone, C. F. and Roberts, R. W. (1996). Factors associated with the incidence of reduced audit quality behaviors, Auditing: A Journal of Theory and Practice, Vol. 15(2), pp. 49-64.
- Montes, S. D. (2005). Psychological contracts: assessing underlying assumptions and expanding understanding, Thesis Canada, Doctor of Philosophy in Psychology.
- Otley, D.T. and Pierce, B.J. (1996). Auditor time budget pressure: consequence and antecedents, Accounting, Auditing and Accountability Journal, Vol. 9, pp. 31-58.
- Robinson, L. S. (1996). Trust and breach of the psychological contract, Administrative Science Quarterly, Vol. 41, pp. 574-599.
- Robinson, L. S., and Rousseau, D. M., (1994). Violation the psychological contract: not the exception but the norm, Journal of Organizational Behavior, Vol. 15, pp. 245-259.
- Rousseau, D. M., (1989). Psychological and implied contracts in organizations, Employee Responsibilities and Rights Journal, Vol. 2, pp. 121-139.
- Rousseau, D. M., and Denise, M. (1990). New hire perceptions of their own and their employer's obligations: a study of psychological contracts, Journal of Organizational Behavior, Vol. 11, pp. 389-400.