Professional skepticism and auditors’ assessment of misstatement risks: The moderating effect of experience and time budget pressure

Sayed Alwee Hussnie Sayed Hussin, Takiah Mohd Iskandar, Norman Mohd Saleh, Romlah Jaffar

Research output: Contribution to journalArticle

3 Citations (Scopus)

Abstract

Background: This study employs a field experiment to examine the relationship between professional skepticism, experience, and time budget pressure on auditors’ assessment of risk of misstatement. In addition, the study examines the moderating effect of experience and time budget pressure on the relationship between professional skepticism and auditors’ assessment of risk from material misstatements; 2) Method: This study employs a multiple regression analysis on 248 auditors from both Big4 and non-Big4 firms; 3) The results indicate that professional skepticism and experience have positive effects while time budget pressure has a negative effect on auditors’ assessment of risk from material misstatements; and 4) The positive effect of professional skepticism on auditors’ assessment of risk from material misstatement is stronger among more experienced auditors than that among less experienced. On the other hand, the positive effect of professional skepticism on risk assessment is weaker when auditors work under high time budget pressure than that when they work under low time budget pressure. Additional analysis on the samples from the two selected areas, Kuala Lumpur and Selangor, produces consistent results indicating that the use of separate models for different samples is not necessary. Hence, the study uses a single model for the final analysis. The results provide a better understanding on whether the auditors are able to sustain professional skepticism with a given amount of relevant audit experience and under different levels of time budget pressure.

Original languageEnglish
Pages (from-to)225-250
Number of pages26
JournalEconomics and Sociology
Volume10
Issue number4
DOIs
Publication statusPublished - 1 Jan 2017

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time budget
experience
professional experience
audit
risk assessment
Auditors
Moderating effect
Professional skepticism
regression analysis
firm
experiment

Keywords

  • Experience
  • Professional skepticism
  • Risk of material misstatement
  • Time budget pressure

ASJC Scopus subject areas

  • Sociology and Political Science
  • Economics, Econometrics and Finance(all)

Cite this

Professional skepticism and auditors’ assessment of misstatement risks : The moderating effect of experience and time budget pressure. / Sayed Hussin, Sayed Alwee Hussnie; Iskandar, Takiah Mohd; Mohd Saleh, Norman; Jaffar, Romlah.

In: Economics and Sociology, Vol. 10, No. 4, 01.01.2017, p. 225-250.

Research output: Contribution to journalArticle

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