Analyzing the Factors That Affect Auditor’s Judgment and Decision Making in Lebanese Audit Firms

Bilal Adel Moustafa Abdallah (), Mohamed Gaber Ghanem and Wagdi Hamed Hijazi
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Bilal Adel Moustafa Abdallah: Department of Accounting, Faculty of Business Administration, Beirut Arab University, Beirut 11-5020, Lebanon
Mohamed Gaber Ghanem: Department of Accounting, Faculty of Business Administration, Beirut Arab University, Beirut 11-5020, Lebanon
Wagdi Hamed Hijazi: Department of Accounting, Faculty of Business Administration, Beirut Arab University, Beirut 11-5020, Lebanon

JRFM, 2024, vol. 17, issue 2, 1-25

Abstract: The exercise of audit judgment is essential because it is impractical to perform an audit on all types of evidence. These types of evidence are considered in forming an opinion on audited financial statements, making audit judgment a determinant of the audit’s outcome. The objective of this research is to analyze the factors that affect an auditor’s judgment and decision making (JDM) during an audit. This study used an exploratory research design, with the factor analysis approach as its methodology. However, the data were collected using the questionnaire method. The questionnaire was sent to all member auditors of the Lebanese Association of Certified Public Accountants (LACPA). A total of 310 completed questionnaires were collected and analyzed. The data analysis findings indicate that the auditor’s JDM throughout the audit process is affected by three factors: personal, task, and environmental factors. The auditor’s personal factor becomes the dominant factor because it has the largest eigenvalue of 7.949. These findings demonstrate the complex and diverse nature of auditor judgment, highlighting the significance of considering audit JDM factors. Therefore, auditors may improve their abilities to make informed and effective judgments throughout the audit process by acknowledging the importance of personal, task, and environmental factors.

Keywords: judgment and decision making; auditors; factor analysis; personal factors; task factors; environmental factors; LACPA; Lebanon (search for similar items in EconPapers)
JEL-codes: C E F2 F3 G (search for similar items in EconPapers)
Date: 2024
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