Projection or Reflection? The Effect of Social Projection, Dark Triad, and Moral Identity on Auditor Risk Assessments and Ethical Action-Taking

• In Event: Managing the Auditor-Client Relationship

Abstract

Using two distinct scenarios, we investigate how auditors’ personality traits influence their risk assessments and ethical action-taking. First, we draw upon social projection theory (i.e., assigning a state of one’s own to someone else) to determine whether auditors’ use of their own ethical predispositions (i.e., Dark Triad) as a proxy for their clients’ predispositions affects risk assessments. We find a significant interaction between social projection and Dark Triad traits, suggesting that higher Dark Triad auditors assess client risk to be as high, or higher, than lower Dark Triad auditors, depending on whether they exhibit social projection. Second, we extend prior ethical action-taking literature in accounting by finding that while an auditors’ level of Dark Triad personality has historically been directly linked to ethical action-taking, it is ultimately auditors’ moral identities (i.e., the degree to which morality is important to a person’s self-concept) that significantly influences their ethical actions. Our findings support our prediction that auditors’ moral identity is the predominate self-regulatory mechanism restricting unethical actions.

Authors

• Kristen Steury, University of South Carolina

• Chad Matthew Stefaniak, University of South Carolina