Enhancing auditors' critical thinking in audits of complex estimates
Authors
Published
Accounting, Organizations and Society, vol.
73, pp.
35-49,
February
2019
Website
http://
https://www.sciencedirect.com/science/article/pii/S0361368218303246?casa_token=k3YImDuCkYAAAAAA:cWN3yN-z8QibbRRroqnwDmi1-qRtoH1hxoHRbdlrKiogr_CCNZ80K13ASS2FIWPOlDh18qrM1FIm
Abstract
Audit practitioners, standards, and regulators continually emphasize the importance of professional<br>judgment in the audit of complex processes and financial estimates. Despite this increasing call for more<br>thoughtful analysis, research and inspection reports seem to suggest that auditors tend to make<br>mechanistic audit decisions in such situations. This experiment evaluates auditor participants' improved<br>application of professional judgment in the audit of complex estimates when taught a specific critical<br>thinking methodology from system dynamics. Results indicate that emphasizing the use of professional<br>judgment is not sufficient to decrease auditors' mechanistic mentality. As expected, however, auditors<br>primed to take a systems-thinking perspective are better able to evaluate the complexity of the situation<br>and to more effectively apply professional judgment. These results suggest that the goal of improving<br>professional judgment can be achieved with an underlying change to the way auditors think.
