International Journal of Finance & Managerial Accounting

International Journal of Finance & Managerial Accounting

Pygmalion Effect and Behavioral Bias of Independent Auditors: Grounded upon the Concept of Golem through Structural Equations

Document Type : Original Article

Authors
Masoud Khoshro 1
Mohsen Hamidian 2
Ramzan ali Royai 3
1 Doctoral student of Accounting Department, Islamic Azad University, Science and Research Unit, Tehran, Iran
2 Associate Professor, Department of Accounting, Islamic Azad University, South Tehran Branch, Tehran, Iran
3 Assistant Professor, Department of Accounting, Islamic Azad University, Science and Research Unit, Tehran, Iran
10.30495/ijfma.2023.74126.2036
Abstract
Abstract

In the auditing profession, independence is in fact an abstract concept which cannot be directly observed, and it is often described as a state of mind which is related to concepts such as impartiality, honesty, trustworthiness, and personality. There are two dimensions for independence in most of the existing definitions in the auditing profession. One is true independence (intrinsic) and the other is apparent independence. It should be stated that true (intrinsic) independence is considered "lack of mental inclination in the implementation of audit operations" and apparent independence is "avoidance of conditions that depict the auditor in conflict with the employer's obvious interests". The aim of this study is to investigate the Pygmalion effect on auditors' behavioral bias based on the concept of Golem. The research data collection tool was a questionnaire which was used to analyze the collected data using partial least squares analysis. The target population of the research was the auditors who are members of the audit organization and private sector audit institutions, who were selected through random sampling and examined in a period of 6 months. Based on the obtained results, research shows that the existence of positive expectations in the context of the society and the professional environment creates more dynamics in the effective and independent functions of auditors, because the motivations can increase the professional philosophy of auditors in the way of work and make them have professional opinions and judgments, regardless of any influence and possible dependencies, when making decisions.
Keywords
Keywords: The Pygmalion Effect
Auditors’ Behavioral Bias
Golem Theory
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