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Factors Influencing Professional Judgment of Auditors in Malaysia

Author

Listed:
  • Hazianti Abdul Halim
  • Hartini Jaafar
  • Sharul Effendy Janudin

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.

Suggested Citation

  • Hazianti Abdul Halim & Hartini Jaafar & Sharul Effendy Janudin, 2018. "Factors Influencing Professional Judgment of Auditors in Malaysia," International Business Research, Canadian Center of Science and Education, vol. 11(11), pages 119-127, November.
    • Handle: RePEc:ibn:ibrjnl:v:11:y:2018:i:11:p:119-127
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    References listed on IDEAS

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    1. Rajni Mala & Parmod Chand, 2015. "Judgment and Decision‐Making Research in Auditing and Accounting: Future Research Implications of Person, Task, and Environment Perspective," Accounting Perspectives, John Wiley & Sons, vol. 14(1), pages 1-50, March.
    2. Jim Psaros & Ken T. Trotman, 2004. "The Impact of the Type of Accounting Standards on Preparers’ Judgments," Abacus, Accounting Foundation, University of Sydney, vol. 40(1), pages 76-93, February.
    3. Wally Smieliauskas, 2012. "Principles‐Based Reasoning about Accounting Estimates," Accounting Perspectives, John Wiley & Sons, vol. 11(4), pages 259-296, December.
    4. Mala, Rajni & Chand, Parmod, 2014. "Impacts of Additional Guidance Provided on International Financial Reporting Standards on the Judgments of Accountants," The International Journal of Accounting, Elsevier, vol. 49(2), pages 263-288.
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    More about this item

    Keywords

    auditors; Malaysia; professional judgment;
    All these keywords.

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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