The role of emotional intelligence and personality on the overall internal control effectiveness: applied on internal audit team member's behavior in Lebanese companies. Issue 2 (3rd December 2021)

• Record Type: Journal Article
• Authors: Abdo, Manale; Feghali, Khalil; Zgheib, Mona Akram
• Is Part Of: Asian journal of accounting research. Volume 7:Issue 2(2022)
• Page Start: 195
• Page End: 207
• Publication Date: 2021-12-03
• Subjects: Emotional intelligence -- Emotional wellbeing -- Five-factor model of personality -- Internal control -- COSO; D23 -- L21 -- L22 -- M10 -- M12 -- M49 -- O19; Accounting -- Asia -- Periodicals; Finance -- Asia -- Periodicals; 657
• DOI: 10.1108/AJAR-04-2021-0048
• Languages: English
• ISSNs: 2459-9700

Abstract

Abstract : Purpose: This paper aims to assess the influence of emotional intelligence (EI) on the perceived internal control performance in the Lebanese companies. Design/methodology/approach: The goal of this study is to decide whether there is a connection between "emotional intelligence" and perceived efficacy of "internal control" in Lebanese organizations. For the benefit and purpose of this research, a quantitative methodology will be applied. The data was collected by the use of self-directed and pre-coded questionnaires to test hypotheses made, making it a deductive research. Findings: The findings showed that the personality traits of the members of the audit team play a key role in cultivating a control climate that is more conducive to effective control. Moreover, personality traits were key in boosting trust and openness in communication that can be seen as antecedents to having a system where all key auditing professionals within the organization can cooperate to boost the effectiveness of the internal control framework. These personality traits amplified the impact of the EI of audit manager on the overall effectiveness of the COSO framework, thus leading to improved efficiency of internal controls. Research limitations/implications: The exploratory aspect of this study have shown results that are general but create a basis for future comprehensive researches. This study was limited to a relatively small sample, due to the small size of Lebanon and due to the Pandemic that has limited our access to more data. This research did not regulate other relevant variables such as gender, experience, educational level and age. Nevertheless, the importance of the findings is they ascertain that internal control is not a rigid technical function that is primarily concerned with accounting and financial disciplines, rather it extends to organizational psychology and behavior. Practical implications: The practical implication of studying EM and personality in Lebanese organizations is to describe and understand how it affects the effectiveness of the internal control and thus the survival of the organization. When organizations are aware of such a strong impact, they will try to increase their maturity level in this regard and further seeks more efforts in tackling the EI aspect. As a summary, the practical implication of this paper is to understand how all those variables affect the effectiveness of the internal control and thus the survival of the organization. Social implications: The subject of this study consists of many human-related aspects such as personality and human behavior. Once these elements are combined with the internal control framework, it will have an added value at the social level by enhancing the behavior of people and their perception of others' emotions and oneself emotions, in addition to improving their performance which reflects on enhancing the overall organizational performance. Studying EI allows to understand and manage emotions in order to create positive social interactions. The benefits of EI are vast in terms of personal, academic and professional success. Originality/value: Due to the lack of research on this topic, this research will contribute to explore the field. Future studies will benefit from this analysis while using a larger sample. Future work should aim to include not only auditors but all staff of the company. Further research is required to decide whether the results of this analysis are generalized across various positions and industries and to determine whether EI is the only influential aspect involving a significant number of social interactions. In addition, this article can be used as a basis for the implementation of internal control with a COSO framework that involves the EQ of everyone in the organization.