The impact of auditor’s emotional intelligence and leadership style on audit quality: A study of audit team governance

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Abstract

This study aims to investigate the impact of auditors’ emotional intelligence (EI) and leadership styles in the audit team on audit quality (AQ) and explore the mediating role of team trust (TT) in this relationship. The data for this study were collected through a questionnaire with 246 responses from auditors working for independent audit firms in Vietnam. From the obtained data, we conduct processing and quantitative analysis through a Statistical Package for the Social Sciences (SPSS) v. 26 and Analysis of Moment Structures (AMOS) v. 24 software. The results of the research indicate that EI not only has a direct positive effect on AQ but also indirectly influences AQ through the mediating role of TT. Moreover, among the three leadership styles, only two, namely transformational leadership (TF) and transactional leadership (TL) have a positive impact on AQ whereas laissez-faire leadership (LL) has a negative on AQ. Additionally, TT just plays a mediating role in the relationship between TF and AQ. These results not only reinforce previous findings on the importance of EI, and leadership style to AQ (Zhao et al., 2022; Mohassel et al., 2023) but also emphasize the role of trust in the audit team in improving AQ. The findings of this research provide a foundation for audit firms to formulate appropriate policies aimed at enhancing AQ, contributing to the development of the auditing sector in Vietnam.

Keywords: Audit Quality, Emotional Intelligence, Leadership Style, Team Trust

Authors’ individual contribution: Conceptualization — T.N.D. and T.K.H.L.; Methodology — T.N.D. and T.K.H.L.; Software — T.N.D. and V.A.T.; Validation — T.T.T. and V.A.T.; Formal Analysis — T.N.D. and T.K.H.L.; Investigation — T.T.T. and V.A.T.; Resources — T.T.T. and V.A.T.; Data Curation — T.N.D. and V.A.T.; Writing — Original Draft — T.K.H.L. and V.A.T.; Writing — Review & Editing — T.N.D. and T.T.T.; Visualization — T.T.T. and V.A.T.; Project Administration — T.T.T. and T.K.H.L.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: J24, J53, M41, M42

Received: 12.03.2024
Accepted: 02.01.2025
Published online: 07.01.2025

How to cite this paper: Doan, T. N., Ta, T. T., Le, T. K. H., & Tran, V. A. (2025). The impact of auditor’s emotional intelligence and leadership style on audit quality: A study of audit team governance. Journal of Governance & Regulation, 14(1), 49–63. https://doi.org/10.22495/jgrv14i1art5