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Clarifying the decision-making mystery: drivers of professional skepticism, ego depletion and overconfidence in independent auditors’ quality of judgment

Hani Shirowzhan (Department of Accounting, Faculty of Economics and Administrative Science, University of Mazandaran, Babolsar, Iran)
Hossein Fakhari (Department of Accounting, University of Mazandaran, Babolsar, Iran)

Managerial Auditing Journal

ISSN: 0268-6902

Article publication date: 12 November 2024

Issue publication date: 18 November 2024

149

Abstract

Purpose

This study aims to investigate the influence of professional skepticism (PS) on the quality of judgment and decision-making (QJDM) among Iranian Certified Public Accountants (CPAs) while considering the moderating effects of ego depletion (ED) and overconfidence (OC).

Design/methodology/approach

Nonprobabilistic sampling was used to collect data through questionnaires and direct engagement with 950 Iranian CPA members, resulting in 300 completed responses for analysis.

Findings

The study confirms that PS significantly positively impacts QJDM among independent auditors. Therefore, a high level of trait PS could improve QJDM. In addition, a majority of auditors experience ED and suffer from OC bias due to their extensive knowledge, experience and self-efficacy. ED and OC play negative moderating roles in attenuating the effect of PS on QJDM.

Research limitations/implications

The study emphasizes that integrating PS into auditors’ codes of ethics and improving audit work systems can significantly enhance the quality of auditing practices. Furthermore, addressing existence of OC and ED among auditors will further benefit the audit process. Implementing these measures will lead to more accurate assignment and distribution of audit work among independent auditors, ultimately resulting in more reliable and objective auditing judgment and making decisions.

Originality/value

This study not only approves the vital role of PS, ED and OC in the QJDM of independent auditors but also contributes to the existing QJDM literature in auditing.

Keywords

Acknowledgements

Thank you and appreciation: The authors express the utmost gratitude and appreciation to all the esteemed scholars and contributors, including CPA.

Transparency and data accessibility: The available data is only provided for use by scientific journals and research purposes, and its distribution to individuals and organizations is illegal and against research ethics principles. The present study adheres to research transparency and has an ethical research code: https://ethics.research.ac.ir/IR.UMZ.REC.1402.011

Conflict of interest: The authors declared no conflicts of interest.

Citation

Shirowzhan, H. and Fakhari, H. (2024), "Clarifying the decision-making mystery: drivers of professional skepticism, ego depletion and overconfidence in independent auditors’ quality of judgment", Managerial Auditing Journal, Vol. 39 No. 7, pp. 821-842. https://doi.org/10.1108/MAJ-04-2024-4317

Publisher

:

Emerald Publishing Limited

Copyright © 2024, Emerald Publishing Limited

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