How does Narcissism Influence Auditing? A Systematic Literature Review

The rise in accounting scandals in recent years has significantly increased public awareness regarding the critical nature of audit quality.High-quality audits are essential for improving the quality of financial reporting by ensuring the accuracy and transparency of financial information.Evaluations conducted by auditors can uncover errors, irregularities, and fraudulent activities, thereby enhancing the quality and credibility of financial reports.Conversely, dysfunctional behaviors exhibited by narcissistic auditors can diminish audit quality and compromise the auditing process.In audited companies, strong leadership plays a crucial role in shaping the workplace environment, establishing norms, and fostering professionalism, ethics, and accountability.In contrast, narcissistic leadership characterized by self-absorption, self-importance, and manipulation can negatively impact auditor behavior.This study reviews research on the impact of narcissistic personality on auditing.By searching the Web of Science and Scopus databases, we identified 21 relevant studies.Upon analysis and summarization, we categorized the research into two types: client narcissism and auditor narcissism.Most findings from the review indicate that client narcissism significantly influences auditor risk assessments, including fraud risk assessment and material misstatement risk assessment.Auditor narcissism is primarily related to audit quality.The impact of narcissistic characteristics on audit outcomes, should attract the attention of auditors, accounting firms, clients, and regulators.Therefore, this study can provide some inspiration for the recruitment and promotion of accounting firms, and can also help client managers find high-quality auditors.