Impact of Informal Management of External Audit Firms to Employee Performance

Abstract

Accounting and Audit Firms are considered as one of the most trusted institutions today. Majority ofthe companies today are dealing with two firms one for audit and another for non-audit accounting services. They are trusted in terms of handling different kinds of reports related to financial aspects, including investigating or finding the probable cause of not following its own standards. Firms such this, should stand for the Good Governance should starts from them. The purpose of the study is determine what are the current issues faced by an employee in terms of exposure to informal management and also to validate and investigate the main issues. The method will use to develop this research study is qualitative research method. Study aims to determine what are the reasons of high turnover rate in the audit firms? Informal Management does there really an effect to employee’s performance? By summarizing, understanding the insights, reasons, studies, and testimonial thru current related literature and studies, will identify the reasons and solutions of the problem. According to the researcher’s experience many Audit Firms have no formal management. Employees like CPA’s and External Auditors are complaining about the rules and regulations, irregularities such as: conflict of interest, no proper distribution of equal benefits or bonuses, dealing with illegal process and also by forging the reports with the order of the management. There are many employees are really frustrated with their job because of these above mentioned instances. Example would be there’s an employee who has no interest already to work to the company because the management is not taking any actions for resolving internal issues because no one in the organization is has the knowledge to deal with certain difficult scenarios.