Professional Judgment Research Articles

Artificial Intelligence and Philosophy of Humanism in Auditor Perceptions

This study aims to interpret the humanistic thinking of Chinese philosopher Confucius on the activity of integrating Artificial Intelligence (AI) into the process of auditing financial statements. The qualitative-interpretive method was used for research purposes through in-depth interview techniques which were addressed to informants from audit firms that had used AI. The validity of the information was tested using triangulation of data sources from different audit firm informants. The main findings show that as humans who have cognitive, moral and ethical abilities, auditors can collaborate with AI without worrying that the existence of this profession will be completely replaced by AI. However, excessive integration and tend to rely on auditors should be aware of so that high-tech assisted audit objectives such as AI work in harmony without eliminating the auditor's humanism such as skepticism and professional judgment that AI does not have. Social and ethical issues are challenges in the use of AI and solutions will continue to be sought. Therefore, the auditor always maintains critical thinking, especially on the elements contained in AI technology, namely system predictability, dependability, reliability, robustness, understanding, explanation of intent, usability, and user familiarity with AI technology.

The informal way to success or failure? Findings from a comparative case study on video consultation training and implementation in two Danish hospitals

BackgroundThis study evaluated an attempt to implement video consultations through a novel education intervention in telehealth training and implementation in two middle-sized hospitals in Denmark. Three units tested the education intervention along with a regional decision to strengthen multidisciplinary and cross-sectoral collaboration through technology to improve service delivery by making the process more coherent and saving time and resources. This study aims to identify what contextual factors enable workplace learning, skills acquisition, and utilization of new digital skills to use and routinize video consultations in workplace practice.MethodsThis qualitative case study draws on the principles of the realist evaluation framework using cross-case comparisons to test and refine program theories by exploring the complex and dynamic interaction among context, mechanism, and outcome. The methods in this study include participant observations, document analysis, semi-structured individual interviews, and focus groups. We performed an interpretive cross-case analysis, which explored the context-mechanism-outcome relationship using the guiding question, “What works, for whom, under what circumstances, and why?”.ResultsTwo broad mechanisms appeared to enable skills acquisition and routinization of video consultations: informal workplace learning and adjusting video consultations to professional judgment. The three units had different approaches to the implementation and training and, as such, had different outcomes. First, the skills acquired in the units differed; therefore, how and with whom they used video consultations varied. Second, video consultation use was more likely to be adjusted to workflows if unit managers were responsive to staff’s professional judgments regarding patients, as was evident in all three units.ConclusionOur study shows that a formal training course alone is insufficient to provide healthcare professionals with the skills needed to use video consultations in workplace practice. Informal workplace learning with support on the spot and continuous follow-up seems to equip healthcare professionals with the skills to use video consultations. Video consultations are more likely to be used confidently if novel workflows are adjusted to health care professionals' knowledge, skills, and judgment and their concerns regarding patient soundness.

Misuse of Emphasis of Matter Paragraphs in Unqualified Audit Opinions

Audit opinion helps investors and creditors to understand the real financial situation of the enterprise, so that they can make smarter investment and credit decisions and protect their own interests. However, in auditing practice, the definition of an audit opinion is not very clear, and sometimes there is some ambiguity. Moreover, the auditing standards for the part of the emphasis of matter can be increased only provide some principal guidance, but not detailed list of specific application, which could lead to misunderstanding and misuse of the paragraph. In order to improve audit quality, the professional judgment and ethics of certified public accountants in issuing audit reports should be further emphasized.

Higher Education Accommodation Decision-Making and Positionality: A Survey of Disability Resource Professionals

In higher education settings, the central function of a disability resource professional (DRP) is determining accommodations in collaboration with disabled college students, making their role in the outcomes of students with disabilities paramount. Despite this importance, research on the process of determining accommodations is minimal, and professional guidance on the matter can be interpreted in varied ways, leading DRPs to rely on their professional judgment to reach final decisions. What subtly informs this professional judgment, particularly concerning DRPs’ positionalities and student identities, is largely unexplored. The purpose of this study was to explore the perspectives of U.S. DRPs related to their accommodation decision-making processes, experiences, and perceptions. Based on the results of this exploratory national survey of DRPs, accommodation decision-making processes described by participants can be divided into four components: (a) forming initial opinions, (b) engaging with students, (c) consulting with others, and (d) making final decisions. Notably, participants’ perceptions of positionality and identities in the accommodations process situated those of students to be more heavily considered than their own. Following a presentation of findings, the authors conclude with implications for the field and recommendations for future research.

Factors Related to Nurses’ Professional Autonomy When Caring for Patients with COVID-19 in a University Hospital: A Cross-Sectional Study

Although individual factors play a vital role in determining professional autonomy, their specific impact during the coronavirus disease 2019 (COVID-19) pandemic has not been studied. This study aimed to compare nurses’ professional autonomy when caring for patients with COVID-19 and for other patients and explore factors related to autonomy when caring for these patients. A paper-based questionnaire survey was conducted from June to August 2022 among nurses working at a university hospital in Japan. The survey included demographic factors (10 items, including, age, section, years of nursing experience, position, educational background, ladder level, and having certified nurse specialists or certified nurse qualifications) and individual experience factors (4 items: number of COVID-19 patients experienced, frequency and contents of searching for the latest information about COVID-19, frequency of using scientific sources, and frequency of training/study sessions on COVID-19 attended at the hospital). Additionally, basic knowledge of COVID-19 was evaluated. The scale for nurses’ professional autonomy was developed based on a previous study. A paired t-test and stepwise multiple linear regression were used for the analyses. Overall, 241 nurses participated in the survey. The average length of nursing experience was 10.3 ± 9.2 years. The total scores for nurses’ professional autonomy in all 5 factors 27 items were significantly lower (t = −12.1, p < 0.001 ) when caring for COVID-19 patients than when caring for other patients. Specifically, Factor 1 (Cognition) exhibited the most decreased scores when caring for COVID-19 patients than when caring for other patients. Factor 4 (Abstract judgment) differed the least between caring for COVID-19 and for other patients, but the average score was the lowest. More years of nursing experience (β = 0.208, p = 0.001 ) and a higher number of patients with COVID-19 cared for (β = 0.140, p = 0.026 ) were associated with higher autonomy scores. In conclusion, to enhance professional autonomy during an unprecedented pandemic, nurses must enhance cognition and abstract judgment. In the event of a future pandemic, nurses need to create an environment in which they routinely access and utilize the latest information and scientific evidence to provide high-quality nursing care based on their professional judgment and competence.

A proof of concept study of promotive, mixed, and risk effects using the SAVRY assessment tool items with youth with sexual offenses.

There is currently a lack of consensus about the nature of strengths in forensic assessments. With 273 justice-involved male youth and a fixed 3-year follow-up, this study adopted the approach of Farrington and colleagues to investigating the nature of associations between trichotomized variables, representing risks and strengths, and outcomes using pairs of odds ratios (ORs) and percentage point changes from base rates. Items from the Structured Assessment of Violence Risk in Youth (SAVRY), a structured professional judgment tool used to assess risk and protective factors in justice-involved youth, were employed for this purpose. In the literature, the accuracy of SAVRY summed totals for its Risk Factor item sets (each item rated using a trichotomy) has been generally in the moderate range in predicting future violence. But the total for its summed Protective Factor items (each rated using a dichotomy) has been less consistently encouraging. In this study, contrary to their labels, the majority of SAVRY Risk and Protective Factors (rated using trichotomies) exerted a risk effect at one end of their trichotomy (risk item ratings of 2, protective item ratings of 0) and a promotive effect at the other end (risk item ratings of 0, protective factor ratings of 2) for a new violent (including sexual) offense and any new offense. Subsets of items conservatively weighted using ORs (capturing risk and strength) were statistically significantly more accurate in predicting outcomes than their originally rated counterpart subsets. Implications for understanding the nature of strengths and for applied assessment practices are discussed. (PsycInfo Database Record (c) 2023 APA, all rights reserved).

MONEY LAUNDERING FRAMEWORK FOR PROFESSIONAL ACCOUNTANTS: POST COVID-19

Background and Purpose: The Covid-19 pandemic has sparked global challenges, economic disruption, and an increase in related crimes, such as scams, fraud, and cybercrime. It has also changed the routines of individuals, businesses, and governments in combating financial crimes, especially professional accountants. As front-liners in the anti-money laundering (AML) regime, professional accountants play a vital role in combating financial crime, including money laundering activities that have risen during the pandemic. However, limited study has investigated the money laundering reporting framework for the professional accountants. Hence, this study aims to investigate the money laundering framework for professional accountants that suits the post-pandemic period.
 
 Methodology: This study conducted a content analysis, focussing on the current red flags for money laundering activities specifically for the professional accountants mentioned in prior literature and publicly available reports such as Financial Action Task Force (FATF), ICAEW and ACCA Global. Since this study focuses on the money laundering framework for the professional accountants, this study also referred to the MIA Competency Framework that highlights the importance of professional scepticism and professional judgement.
 
 Findings: Findings showed that professional accountants must exercise high professional scepticism and judgement when dealing with money laundering risk indicators related to related party transactions, beneficial ownership and e-commerce activities. This is to provide quality reporting to the authorities and to proceed with money laundering investigations.
 
 Contributions: This study will contribute to the regulators and professional accountant by proposing a money laundering framework for the professional accountants that would assist them in fulfilling their role as money laundering reporting entity.
 
 Keywords: Money laundering, professional accountants, professional scepticism, professional judgment, Covid-19 endemic.
 
 Cite as: Zolkaflil, S., Syed Mustapha Nazri, S. N. F., Mohd Razali, F., Ahmad Tarmizi, M., & Masum, M. H. (2023). Money laundering framework for professional accountants: Post Covid-19. Journal of Nusantara Studies, 8(TI), 235-256. http://dx.doi.org/10.24200/jonus.vol8issTIpp235-256

Enhancing Decision Making through Professional Judgment and Comprehensive Information Analyses

Enhancing Decision Making through Professional Judgment and Comprehensive Information Analyses

Interrater and intra-rater reliability of the VERA-2R tool.

The Violent Extremism Risk Assessment - Version 2 Revised (VERA-2R) is an evidence-based structured professional judgement (SPJ) tool for ideologically motivated violence. Use of the tool can help professionals in risk assessment and risk management of suspected and convicted terrorists and violent extremists at different stages within the criminal process. It is important that the tool leads to reliable and valid risk assessments. The present study aimed to establish the reliability of the VERA-2R, focusing on the interrater- and intrarater reliability. Trained researchers assessed the interrater- and intrarater reliability, respectively in 30 and 33 cases of Dutch convicted terrorist offenders, on the basis of extensive judicial files. In general, the average amount of agreement on the indicators and structured risk judgements can be classified as good to excellent, for both the interrater- and intra-rater reliability. However, six indicators were found to have low reliability. Above clarifying the reliability of the VERA-2R, this study also showed how the interrater- and intrarater reliability of a SPJ tool can be investigated with trained assessors based on judicial files. This can be of added value, because existing reliability studies often use case vignettes, have a small sample size and/or do not include a stringent training program. With this research, we can make more substantiated recommendations on how the VERA-2R can be improved. This could lead to more accurate risk assessments and risk management strategies. However, in order to develop a more reliable and valid VERA-2R instrument, the remaining psychometric properties must also be investigated and published. That will be discussed in a future article.

Authoring professional identity: Pre-service teachers and ways of knowing

<p>Education programs increasingly emphasize the development of strong core beliefs and values to support professional judgment for pre-service teacher practice. The ability to critically integrate multiple perspectives is an expected foundation for the pedagogical decisions and professional responsibilities preservice teachers carry out. This article details research undertaken to investigate pre-service teachers’ ways of knowing as they progress through a Bachelor of Education program. Findings from semi-structured interviews are discussed in terms of supporting pre-service teacher intellectual development in teacher education programs so that a professional teacher identity is encouraged.</p>

National Hospital and Health-System Controlled Substances Drug Diversion Prevention & Surveillance Program Assessment Survey - 2021.

To present and discuss the results of the National Hospital and Health-System Controlled Substances Drug Diversion Prevention & Surveillance Program Assessment Survey. The survey was emailed to 1,529 chief pharmacy officers utilizing the list of directors of pharmacy from the American Society of Health-System Pharmacists. The survey opened September 15, 2021, and closed October 4, 2021. Forty-nine questions were included in 5 different sections, and participants were also given the option to respond to 39 additional questions. The survey response rate was 12.75%, with the results showing consistencies in practice around drug security and human resource management. Sixty-two percent of sites had a formalized drug diversion committee, half of which had been implemented since 2018. Adoption of electronic controlled substance systems continues to increase, with 50% of sites having implemented such a system in the previous 3 years. At the time of the survey, 18% of organizations did not have an electronic system, but 90% of sites had implemented or intended to implement one by 2023. Over 40% of sites that utilized an electronic system were looking to upgrade to a next-generation system. Most organizations had 0.5 to 1 full-time equivalent dedicated to diversion prevention, and two-thirds of sites had a formalized diversion committee. The majority of sites defined "significant loss" by utilizing professional judgement, based on the scenario, as a percentage of inventory or as a range of units. Community practice consensus is needed around auditing adjustments to controlled substance inventory and for perpetual inventory processes. Respondents reported 1 to 2 (29%), 3 to 5 (26%), and more than 10 (26%) formal drug diversion investigations annually. This first-time survey provided significant insight into the realities of drug diversion prevention practices in hospitals and health systems nationally.

Improving the reliability of the financial statements of the tenant enterprise

Improving the reliability of financial statements in the interests of external users is the main task to be solved in the process of its preparation. The ongoing reform of the accounting system in connection with the updating of federal standards causes changes in the procedure for the formation of financial reporting indicators. The article examines the impact of the federal lease accounting standard on the reliability of information presented in the financial statements of the tenant enterprise. The difference in approaches to the definition of reliable reporting in the Russian accounting system and international standards is analyzed.The authors consider the consequences of applying the standard in three main areas: the emergence of a new object of the balance sheet asset, the reflection of lease liabilities as part of accounts payable of the balance sheet liability, and the disclosure of other information about lease transactions in the explanatory notes to the statements. The procedure for determining the right to use the leased object using discounting rules is described. The concept of the fair value of the leased object and its difference from the market value is given.Special attention is paid to the importance of the professional judgment of an accountant for the formation of reliable reporting indicators.

Application of accounting for the assessment of war losses for agribusiness enterprises of Ukraine

Purpose. The military aggression of the russian federation against Ukraine led to the disruption of logistics processes and the destruction of the production capacity of the agribusiness. This study aims to describe an accounting toolkit to determine and evaluate the direct losses of agricultural enterprises due to the war.
 Methodology / approach. This study is based on the use of Ukrainian regulatory documents. The authors of this study applied synthesis methods when summarizing information on estimates of war damage. They used analytical methods in monitoring the world and national experience of such assessment. The cost method was used during the approbation. It provided for the use of the estimate program “Building technologies: Estimate 8”. Determining the volumes of repair and construction works was carried out in accordance with the State Construction Standards and Resource Elemental Estimate Standards of Ukraine. In addition, modelling, analogy and comparison methods were also used.
 Results. In this study, the authors proposed a simple algorithm of actions, which allows for detecting direct damage by enterprises in a short time. The algorithm is based on the use of five accounting methods: (1) Inventory method, (2) Documentation method, (3) Evaluation method, (4) Accounts and balance method, (5) Reporting method. The specifics of the application of each method are described in detail, taking into account the requirements of accounting legislation for the recognition and assessment, and inventory of assets of agribusiness enterprises. Experimental calculations (using the example of damage to real estate as a result of hostilities) allowed us to conclude that the damage calculated by the individual (object-by-object) approach (USD 63.88 billion) is 30 % higher than the quick estimate of the World Bank (USD 50.4 billion) and 20 % higher than expert estimates made in Ukraine (USD 50.4 billion).
 Originality / scientific novelty. According to the research results, a methodical algorithm to estimate direct war losses for Ukrainian agribusiness enterprises based on accounting methods has been proposed. Using accounting tools to evaluate the direct losses is essential for the following reason. Let’s suppose that the accounting system does not confirm the data on direct losses. In this case, misunderstandings may arise between the participants of socio-economic relations, who operate with general (forecasted) figures. At the same time, verified accounting data on direct losses can be evidence in court and are the basis for receiving compensation or financial assistance.
 Practical value / implications. The practical significance of the proposed methodical algorithm lies in the ability to systematically recognize and assess direct losses of agribusiness enterprises, taking into account the specifics of their assets, based on the accountant's professional judgment, without the involvement of outside experts.

Application of Technical Rationality and Reflective Practice in Managing Intricate Construction Claims: A Case Study in Qatar

The propensity towards the increased number of court cases, gaps between theory and practice and the intricacy associated with construction claims tend to pose messy and indeterminate situations where the traditional instrumental approaches are criticised for sub-optimal outcomes. This essentially warrants some kind of a reflection in action merged with technical rationality in making professional judgments. There is little to no literature on how construction practitioners synthesize both paradigms within a single project, reinforcing the apparent divide between them. This study therefore explores the potential of implementing reflective practice into construction claim analysis by using a case study. The project selected was a 12 km bypass in Doha Qatar consisting of a 10-lane section which provided qualitative data related to 19 contractual heads that are recognized as being effectively and amicably settled. The literature shows 17 characteristics of each domain. The study emphasized that two paradigms (technical rationality and reflective practice) are not remote, but concomitant with several discrete relationships. Recommendations were given for construction practitioners to use reflective practice, along with technical rationality to submit sensible claims and frame out solutions for future applications. It is apparent that the use of algorithms, industrial knowhow and thumb rules provide stimuli in claims analysis combining both the paradigms fostering a culture of sensible claims.

Teachers’ assessment of self-regulated learning: Linking professional competences, assessment practices, and judgment accuracy

Self-regulated learning (SRL) is crucial for successful lifelong learning and an important educational goal. For students to develop SRL skills, they need appropriate SRL support from teachers in the classroom. Teachers, who are aware of their students’ strengths and weaknesses in SRL, can promote SRL more adaptively. This requires teachers to assess students’ SRL skills accurately. However, there is little research on teachers’ diagnostic competences in SRL. To address this research gap, the present exploratory study investigates teachers’ content knowledge about SRL, assessment activities, and accuracy in judging their students’ SRL. Furthermore, the study examines whether teachers’ characteristics and competences in SRL are associated with the accuracy of their judgments. The study included 41 lower secondary school teachers and their 173 students. The students completed metacognitive knowledge tests on several SRL skills while the teachers made predictions about the students’ metacognitive knowledge of those SRL skills. The results indicate that not all teachers were familiar with the assessment of SRL. Moreover, teachers exhibited greater familiarity with offline assessments of SRL than online assessments and a noteworthy proportion of teachers employed assessment activities that were not diagnostic of SRL. Low correlations between students’ actual test scores and teachers’ judgments generally revealed low accuracy for teachers in assessing their students’ metacognitive knowledge of various SRL skills. Teachers’ characteristics and competences in SRL were mainly uncorrelated with their judgment accuracy. Overall, these results highlight the need for further attention and support for teachers in developing their diagnostic competences in SRL.

The legal nature of cryptocurrency as property: Accounting and taxation implications

This Article takes an interdisciplinary approach to examining the legal nature of cryptocurrency as property and its accounting and taxation implications for companies holding cryptocurrencies. Nowadays an increasing number of companies accept cryptocurrencies as payment and investment methods, but it is still unclear how to classify them as property, which results in uncertainties relating to their treatment for accounting and taxation purposes. This is a significant issue because it may affect the available legal remedies, presentation of companies’ financial statements and taxation outcomes. Although the legal status of cryptocurrency as property has now been well explored, little research has been conducted to think about the property, accounting and taxation aspects together.While cryptocurrencies are likely to be treated as either things in action or general intangible properties in law, in accounting they are often treated as inventories or intangible assets. Yet neither of them can satisfactorily represent the true nature of cryptocurrencies as property, because they fail to take into account the unique features of cryptocurrencies. We make several suggestions for improvement, including enhancing disclosure and making better use of contractual arrangements in the short run. In the long run, new legal provisions and accounting standards should be developed specifically for cryptocurrencies to better reflect their unique nature and features as property. But most importantly, professional judgement should always be exercised to ensure a true and fair view about cryptocurrencies is presented.

How auditors identify and report key audit matters - An organizational routines perspective

Despite the volume of auditing research over the last decade, relatively little is known about how auditors apply specific codified requirements. We use organisational routines as a schematic and Power's (2003) distinction between the front and backstage of an audit to explore the link between the broad prescriptions in ISA 701 and the micro-level performances of individual auditors to report key audit matters (KAMs). Interviews with 42 senior staff from large and mid-tier audit firms reveal how the ostensive elements of auditing routines result in coercive, normative and mimetic forces. These forces regulate and coordinate how audit procedures are executed to yield a frontstage representation of technical and procedural rigour. Yet, at the performative level experience, professional judgement and dynamic operating environments counter isomorphic forces. The messier backstage of activities provides an opportunity for minor modifications to audit procedures which can accumulate and impact the routine at the ostensive level. That the responsibility for the reporting KAMs vests with engagement leaders increases the opportunity for variability as they exercise professional judgement to modify the routine. Overall, our paper adds to the literature on how auditing is socially constructed and reveals how technical concepts are “transmitted” among individual practitioners to illuminate an understudied aspect of auditing. The study provides an original action-orientated perspective of how routines work in professional settings. It complements the largely inferential work on KAM determinants and should be relevant for standard-setters conducting a post-implementation review of ISA 701 and regulators monitoring KAM reporting.

The Impact of Ethics on the Audit Quality of Firms in Sub-Sahara Africa

Sub-Saharan Africa (SSA) is a region characterised by unique challenges related to weak governance structures, inadequate regulatory frameworks, and limited resources. These challenges pose significant risks to audit quality, as they can compromise the independence, objectivity, and professional judgment of auditors. Moreover, the ethical values of the region can also have a significant impact on audit quality, as they shape the behaviour and attitudes of auditors and the firms they audit. The aim of this study was to investigate the impact of ethics on audit quality among firms in SSA. The study uses a sample of 323 firms from 12 sub-Saharan African countries, covering the period from 2012 to 2021. The research design is quantitative, employing a panel data approach and regression analysis. The econometric model used to estimate the impact of ethics on audit quality was based on variables such as audit quality, ethical values, tenure, audit size, auditor reputation, firm size, return on assets, ownership structure and board independence. The data was collected from the World Economic Forum, Bloomberg Database and other sources. Regression results demonstrated a negative and insignificant impact of ethical values on audit quality. However, the tenure of auditors had a positive impact on audit quality. The results of this study suggest the importance of promoting ethical behaboiur and strengthening ethial standards in auditing profession in SSA.

The effects of auditors’ knowledge, professional skepticism, and perceived adequacy of accounting standards on their intention to use blockchain

This study examines factors that influence auditors’ intention to use blockchain. From the dual-factor perspective, it argues that auditors’ knowledge about the implications of blockchain for auditing enables their intention to use the technology. However, professional skepticism and perceived adequacy of accounting standards present barriers to the use, which reduce the effect of knowledge on use intention. These claims are tested with a survey of 118 auditors in the U.S. The results show that auditors’ knowledge about blockchain is positively associated with their use intention, indicating their optimism about this technology. Their professional skepticism has no effect on intention, but perceived adequacy of accounting standards has a negative effect, which also weakens the effect of blockchain knowledge on intention, revealing the status quo bias in blockchain use. This study extends the literature on the acceptance of blockchain technology by accounting and auditing professionals by showing how the need to improve accounting standards, which are important attributes of their professional judgments, may influence their blockchain use. It has implications for promoting blockchain among auditors.

Auditor's professional judgment, audit efficiency and interplay between legal liability and regulatory oversight

This paper analyzes the impact of two enforcement mechanisms – regulatory oversight (inspection by the Public Accounting Oversight Board – PCAOB) and legal liability – on audit effectiveness and audit efficiency, when auditor's professional judgment is at stake. Professional judgment is a double-edged sword: used wisely, it enables efficient audit performance, but can also be used as an excuse to put in an insufficient effort, leading to an ineffective audit. The model shows that regulatory oversight is better at enforcing audit effectiveness, while legal liability is better at inducing efficiency. Moreover, switching from a pure legal liability regime to a joint regime that includes both enforcement mechanisms is found to improve audit effectiveness, limit auditor's professional judgment, and worsen efficiency. The study provides insights into the effects of the creation of the PCAOB and offers policy implications for regulators.