Can Priming a Firm’s Organizational Identity Overcome the Influences of National Culture on Auditor Judgment?

A significant challenge faced by large auditing firms is offering consistent quality
across the global network. Unfortunately, variation in judgments and decision-making,
resulting from cultural differences, can undermine the provision of a uniform level of
audit quality for these international firms. Previous research has determined that national
culture influences an auditors’ professional judgments and decisions. Relying on Social
Identity Theory, I explore whether inducing one’s organizational identification can both
enhance auditor judgment and mitigate any deleterious impact that culture may have on
the provision of a uniform level of audit quality. I also examine current cultural variations
in auditor judgment in order to ensure that the results of earlier studies still typify the
international auditing environment. National culture is assessed using two dimensions
(individualism/collectivism, power distance) included in Hofstede’s 1980 cultural values framework. Participants from the United States are used to represent an
individualistic/low power distance culture while individuals from India are used to
represent a collectivistic/high power distance culture. Firms need mechanisms to elicit
desired behaviors that may not be consistent with cultural tendencies in order to provide a
uniform level of audit quality.
Contrary to expectations, no significant differences are identified between the
judgments of auditors from India and The United States. The results, however, do provide
evidence that enhancing one’s organizational identification can impact certain
professional judgments during the audit process. An association between national culture
and auditor attitudes pertaining to client trust is also found. The implications of these
findings for the professional auditing environment and future academic research are
discussed.