Influencing Factors Of External Auditor Performance Via Islamic Work Ethics In Libya: A Conceptual Framework

Khayri Abdullah Miftah Nasr; Murni Yusoff; Shahir   Hassan

Authors

Khayri Abdullah Miftah Nasr PhD Candidate
Murni Yusoff Senior Lecturer
Shahir Hassan Associate Professor

Keywords:

External Auditor, Determinants, Performance, Islamic Work Ethics, Libya

Abstract

The study aimed to identify the role played by external auditor determinants in the performance of the external auditor through Islamic work ethics in Libya. A review of several literatures related to the study variables was conducted. The current study was primarily based on agency theory and Islamic management theory to develop performance determinants. The study discussed several previous studies, and based on this discussion, a proposed conceptual framework model was presented for application. The methodology adopted in the paper involves developing a conceptual framework aimed at assessing the impact of various determinants on the performance of the external auditor, with a particular focus on Islamic motivation as a factor that can affect the relationship between these determinants and the quality of the external auditor's performance. The proposed conceptual framework includes five main determinants of the external auditor's performance, which are: experience, commitment to standards, fees, training, and Islamic motivation. In addition, Islamic work ethics are included as an influencing factor in the relationship between the determinants and the dependent variable, which is the performance of the external auditor. The results obtained through this framework highlight the significant importance of experience, commitment to standards, fees, and training in enhancing the quality of the external auditor's performance. However, the study considers Islamic motivation as a new and important factor that must be taken into account, as it has the potential to improve performance quality by enhancing productivity and quality in auditing process outputs. It was emphasised that adopting Islamic work ethics can inspire employees with confidence in the workplace and enhance social business responsibilities through hard work, commitment, dedication, and creative work and collaboration, contributing to achieving high quality for the auditing process outputs. The paper seeks to fill a gap in the existing literature by focusing on Islamic motivation as an influencing factor in the external auditor's performance, providing insightful perspectives on how this factor can enhance performance quality in the field of external auditing.

Downloads

Download data is not yet available.

Author Biographies

Khayri Abdullah Miftah Nasr, PhD Candidate

Center for Islamic Development Management Studies, Universiti Sains Malaysia.

Murni Yusoff, Senior Lecturer

Center for Islamic Development Management Studies, Universiti Sains Malaysia.

Shahir Hassan , Associate Professor

Center for Islamic Development Management Studies, Universiti Sains Malaysia.

References

Journal

Ab. Wahab, M., & Masron, T. A. (2020). Towards a core Islamic work value. Journal of Islamic Accounting and Business Research, 11(1), 179-200.

Adam, S. B., Al-Aidaros, A.-H., & Ishak, S. B. (2019). The Relationship between Islamic Work Ethics and the Performance of Nigerian Islamic Financial Institutions. International Journal of Research in Business, Economics and Management, 3(1), 1-14.

Ahmed, A., Arshad, M. A., Mahmood, A., & Barkat, W. (2021). The impact of spiritual values on employees loyalty: the moderating role of Islamic work ethic. International Journal of Ethics and Systems, 37(3), 341-355.

Al Delawi, A. S. (2019). Role of ethics in Islamic Thinking in the activation of accounting information quality. Utopía y praxis latinoamericana: revista internacional de filosofía iberoamericana y teoría social, 4(6), 179-187.

Al-Naami, & Suleiman, A. (2018). Areas of contribution of general professional standards for auditing to the quality and improvement of the professional performance of the external auditor, “A field study on auditors in the governorates of Gaza - Palestine.” Al-Quds Open University Journal for Administrative and Economic Research and Studies, 2(6).

Al-Shamali, A., Irani, Z., Haffar, M., Al-Shamali, S., & Al-Shamali, F. (2021). The influence of Islamic Work Ethic on employees’ responses to change in Kuwaiti Islamic banks. International Business Review, 30(5), 101817.

Alsughayer, S. A. (2021). Impact of Auditor Competence, Integrity, and Ethics on Audit Quality in Saudi Arabia. Open Journal of Accounting, 10(4), 125-140.

Al-Sukker, A., Ross, D., Abdel-Qader, W., & Al-Akra, M. (2018). External auditor reliance on the work of the internal audit function in Jordanian listed companies. International Journal of Auditing, 22(2), 317-328.

Al-Taher, M., & Fatih, G. (2020). Work ethics and its role in combating financial and administrative corruption in government institutions: an applied study in the Tax Directorate in M’sila. Journal of the Islamic University for Economic and Administrative Studies, 28(4), 191-207.

AlTheebeh, Z. A., & Qobu, M. A. H. Y. A. (2017). Some Influential Elements in Improving Effectiveness of External Audit in Jordanian Audit Offices Field Study from the Point of View of External Auditors. Accounting and Finance Research, 6(4), 31-41.

Alzeban, A., & Sawan, N. (2016). The relationship between adherence of internal audit with standards and audit fees. Journal of Financial Reporting and Accounting, 14(1), 72-85.

Aminnuddin, N. A. (2020). Dataset on Islamic ethical work behavior among Bruneian Malay Muslim teachers with measures concerning religiosity and theory of planned behavior. Data in Brief, 29, 105157.

Armstrong, E. A., & Gyimah, P., (2019). The Impact of Audit Committees‟ Meetings and Audit Fees on the Financial Performance of Listed Banks in Ghana. International Journal of Research and Innovation in Social Science, 3(5), 341-346.

Awinbugri, A. E., & Prince, G. (2019). The impact of audit committees’ meetings and audit fees on the financial performance of listed banks in Ghana. International Journal of Research and Innovation in Social Science (IJRISS) |Volume III, Issue V, 341-346.

Buallay, A., Al Hawaj, A. A., & Hamdan, A. (2021). Integrated reporting and performance: a cross-country comparison of GCC Islamic and conventional banks. Journal of Islamic Marketing, 12(8), 1619-1636.

Chen, Y.-S., Yang, C.-C., & Yang, Y.-F. (2020). Higher Academic Qualifications, Professional Training and Operating Performance of Audit Firms. Sustainability, 12(3), 1254.

De Clercq, D., Haq, I. U., Raja, U., Azeem, M. U., & Mahmud, N. (2018). When is an Islamic work ethic more likely to spur helping behavior? The roles of despotic leadership and gender. Personnel Review, 47(3), 630-650.

Drozd, I., & Pysmenna, M. (2020). The concept of public audit in accordance with INTOSAI professional statements (IFPP). Economics. Ecology. Socium, 4(3), 42-48.

Düşmezkalender, E., Secilmis, C., & Yilmaz, V. (2021). The effect of Islamic work ethic on person-organization fit and workplace deviance in hotels. International Journal of Islamic and Middle Eastern Finance and Management, 14(1), 164-182.

Ferine, K. F., Aditia, R., Rahmadana, M. F., & Indri. (2021). An empirical study of leadership, organizational culture, conflict, and work ethic in determining work performance in Indonesia's education authority. Heliyon, 7(7), e07698.

Haeridistia, N., & Fadjarenie, A. (2019). The effect of independence, professional ethics & auditor experience on audit quality. International Journal of Scientific Technology Research, 8, 1-12.

Hameed, I., Bhatti, Z. A., Khan, M. A., & Syed, S. (2020). How and when Islamic work ethic (IWE) leads to employee promotive and prohibitive voice? The interplay of employee moral identity and perceived voice opportunity. International Journal of Islamic and Middle Eastern Finance and Management, 13(4), 593-612.

Hassan, M. K. (1994). The Malay community facing the 21st century: Socio-cultural hindrances to overall progress. Intellectual Discourse, 2(2), 177-208.

Hassi, A., Balambo, M. A., & Aboramadan, M. (2021). Impacts of spirituality, intrinsic religiosity and Islamic work ethics on employee performance in Morocco: the mediating role of intrinsic motivation. Journal of Islamic Accounting and Business Research, 12(3), 439-456.

Henrizi, P., Himmelsbach, D., & Hunziker, S. (2021). Anchoring and adjustment effects on audit judgments: experimental evidence from Switzerland. Journal of Applied Accounting Research, 22(4), 598-621.

Islam, T., Ahmad, S., Kaleem, A., & Mahmood, K. (2021). Abusive supervision and knowledge sharing: moderating roles of Islamic work ethic and learning goal orientation. Management Decision, 59(2), 205-222.

Islam, T., Ahmed, I., Usman, A., & Ali, M. (2021). Abusive supervision and knowledge hiding: the moderating roles of future orientation and Islamic work ethics. Management Research Review, 44(12), 1565-1582.

Javed, S., Malik, A., & Alharbi, M. M. H. (2020). The relevance of leadership styles and Islamic work ethics in managerial effectiveness. PSU Research Review, 4(3), 189-207.

Kamaruddin, M. I. H., Auzair, S. M., Rahmat, M. M., & Muhamed, N. A. (2021). The mediating role of financial governance on the relationship between financial management, Islamic work ethic and accountability in Islamic social enterprise (ISE). Social Enterprise Journal, 17(3), 427-449.

Kertarajasa, A. Y., Marwa, T., & Wahyudi, T. (2019). The effect of competence, experience, independence, due professional care, and auditor integrity on audit quality with auditor ethics as moderating variable. Journal of Accounting, Finance and Auditing Studies, 5(1), 80-99.

Khaksar, J., Salehi, M., & Lari DashtBayaz, M. (2021). The relationship between political connections, auditor characteristics and auditor narcissism. Journal of Facilities Management, ahead-of-print(ahead-of-print)

Khalfaoui, H., & Guenichi, H. (2022). Does Islam promote growth: evidence from Arab Muslim countries and non-Arab Muslim countries. International Journal of Law and Management, 64(2), 206-224.

Khalil, S., & Nehme, R. (2021). Performance evaluations and junior auditors’ attitude to audit behavior: a gender and culture comparative study. Meditari Accountancy Research, ahead-of-print(ahead-of-print).

Khalili, and Ahmed. (2019). Work ethics in economic organizations: a comparative study between positivist thought and Islamic thought. Development and Applied Economics, 3(1), 187-201.

Kuntari, Y., Chariri, A., & Nurdhiana, N. (2017). The effect of auditor ethics, auditor experience, audit fees and auditor motivation on audit quality. Sriwijaya International Journal of Dynamic Economics Business, 1(2), 203-218.

Lamboglia, R., Lavorato, D., Scornavacca, E., & Za, S. (2021). Exploring the relationship between audit and technology. A bibliometric analysis. Meditari Accountancy Research, 29(5), 1233-1260.

Marwa, T. (2021). The effect of competence, experience, independence, due professional care, and auditor integrity on audit quality with auditor ethics as moderating variable (Similarity). N.J., V., P.

Meidawati, N., & Assidiqi, A. (2019). The influences of audit fees, competence, independence, auditor ethics, and time budget pressure on audit quality. Jurnal Akuntansi dan Auditing Indonesia, 23(2), 117-128.

Mohammad, J., Quoquab, F., Idris, F., Al-Jabari, M., Hussin, N., & Wishah, R. (2018). The relationship between Islamic work ethic and workplace outcome. Personnel Review, 47(7), 1286-1308.

Musa, M. A., Sukor, M. E. A., Ismail, M. N., & Elias, M. R. F. (2020). Islamic business ethics and practices of Islamic banks. Journal of Islamic Accounting and Business Research, 11(5), 1009-1031.

Nasution, F. N., & Rafiki, A. (2020). Islamic work ethics, organizational commitment and job satisfaction of Islamic banks in Indonesia. RAUSP Management Journal, 55(2), 195-205.

Nawaz, T. (2019). Exploring the Nexus Between Human Capital, Corporate Governance and Performance: Evidence from Islamic Banks. Journal of Business Ethics, 157(2), 567-587.

Noura, M., & Mufida, B. A. (2021). Determinants of external audit quality from the point of view of external auditors in the Ouargla region. Algerian Institutions Performance Journal, 10(02), 135-152.

Rashid, A., & Ghazi, M. S. (2021). Factors affecting Sharīʿah audit quality in Islamic banking institutions of Pakistan: a theoretical framework. Islamic Economic Studies, 28(2), 124-140.

Rawwas, M. Y. A., Javed, B., & Iqbal, M. N. (2018). Perception of politics and job outcomes: moderating role of Islamic work ethic. Personnel Review, 47(1), 74-94.

Salemi, Dinori, M., & Allaq. (2017). The role of the external auditor in reducing the manifestations of creative accounting in the financial statements: A study of a sample of auditors for the state of El Oued. Journal of Financial and Accounting Studies, 8(8).

Sani, A., & Ekowati, V. M. (2021). Spirituality to organizational citizenship behavior from Islamic perspective: mediating role of spirituality at work and organizational commitment. Journal of Islamic Marketing, ahead-of-print(ahead-of-print).

Suryani, S., Sudrajat, B., Hendryadi, H., Oktrivina, A., Hafifuddin, H., & Ali Buto, Z. (2021). Can Islamic work ethics encourage knowledge-sharing behaviors? The role of job embeddedness and organizational identification. Journal of Islamic Accounting and Business Research, 12(8), 1181-1199.

Suyanto, S. (2018). Competence and discipline on work motivation and the implication on working performance. Jurnal Akuntansi, Keuangan, dan Manajemen, 1(3), 195-212.

Zahmatkesh, S., & Rezazadeh, J. (2017). The effect of auditor features on audit quality. Tékhne, 15(2), 79-87.

Zia, M. Q., Naveed, M., Fasih, S. T., Aleem, M. U., & Ramish, M. S. (2022). The interactive effect of Islamic work ethics and leader-member exchange on workplace deviance behaviour and adaptive performance. International Journal of Ethics and Systems, ahead-of-print(ahead-of-print).

Proceeding

Ittonen, K. (2010). A theoretical examination of the role of auditing and the relevance of audit reports. Vaasan Yliopisto. Proceeding of the University of Vaasa. Teaching Aid Series.

Mushrif Rashid, A., Jasim, S. R., & Fadhil Saleh, A. (2021). An auditing quality determinants and their impact on Iraqi commercial banks financial performance (an applied study on a sample of nine banks from 2012 to 2018). Materials Today: Proceedings.