Abstract
The purpose of this study was to examine the factors influencing professional judgment of Malaysian auditors. A questionnaire was used to measure the level of professional judgment and factors influencing the judgment such as gender, knowledge, position level, experience and also firm size. The multiple regression results showed that the position level and experience to be statistically significant in determining the level of professional judgment of auditors. Gender, knowledge and firm size have no significant relationship with professional judgment. As for gender, past research has shown mixed results and this study proves that there is no gender differences among Malaysian auditors in terms of their professional judgment. Even though past research has shown that knowledge has a positive relationship with professional judgment, this study finds no significant relationship between the two variables. With regard to firm size, this study finds similar results of prior study that there is no significant relationship between firm size and judgment. In terms of the practical implications, this study provides insights into significant factors that influence professional judgment of Malaysian auditors. Besides, the management of audit firms can place emphasis on establishing training to their employees especially for the junior staff. Exposing junior auditors at the early stage might improve their professional judgment when facing with complexities of assignments.
Highlights
Professional judgment among accounting professionals has always been a subject to scrutiny both in practice and literature
25% of the respondents are from Big Four firms and the remaining are from Non-Big-Four firms. 3.1 Mean Value of Professional Judgment Section C has eight statements that measure the level of professional judgement of the respondents
H1 related to the influence of gender on the level of professional judgment of Malaysian auditors
Summary
Professional judgment among accounting professionals has always been a subject to scrutiny both in practice and literature. Professional judgement is about practising related knowledge and experience in auditing based on the accounting and auditing standards and professional code of ethics to make a sound decision-making. Besides financial reporting, which are influenced by factors such as accounting standards, economic factors and professional ethics and responsibilities, auditing involved a critical professional judgement. There is the International Ethics Standards Board for Accountants (By-Laws on Code of Ethics) that issues ethical standards and guidance for use by professional accountants. In Malaysia, the Malaysian Institute of Accountants (MIA) has adopted this standard and renamed the code as MIA By-Laws (Eilisfsen et al, 2014) and this code provides guidelines for professional accountants with regard to fundamental ethical principles
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