Professional Judgement and Risk Propensity in Financial Audit

Iancu Octavian Ionescu ()
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Iancu Octavian Ionescu: University of East Anglia, United Kingdom

Ovidius University Annals, Economic Sciences Series, 2012, vol. XII, issue 1, 1493-1496

Abstract: During the course of an audit mission, the quality of the auditor’s work is intrinsically linked to two main determining factors: the auditor’s professional judgement and the auditor’s risk propensity. This paper examines professional judgement and risk propensity from an audit perspective and from an academic perspective. The emphasis is on explaining the concept of professional judgement in audit and on the managerial risk behaviour in a decision making context. The research objective is to identify the extent to which theories on the determinants of risk behaviour address the critical importance of risk in business decision making and the link with the auditor’s professional judgement. It is discovered that there are two main risk behaviour theories that explain the risk propensity of business decision makers and that risk propensity can influence professional judgement.

Keywords: audit; professional judgement; risk behaviour; decision making . (search for similar items in EconPapers)
JEL-codes: M10 M41 M42 (search for similar items in EconPapers)
Date: 2012
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Persistent link: https://EconPapers.repec.org/RePEc:ovi:oviste:v:xii:y:2012:i:12:p:1493-1496

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