The Role of Professional Skepticism in Enhancing Audit Judgment Quality

Abstract

This research investigates the underexplored cognitive and behavioral mechanisms
through which professional skepticism directly enhances audit judgment quality, moving beyond its traditional framing as a mere attitude or regulatory requirement. While
prior literature acknowledges skepticism’s importance, it often treats it as a monolithic
construct. We propose a novel, tripartite model of professional skepticism comprising
Affective, Cognitive, and Procedural dimensions (ACP Model). The Affective dimension involves the auditor’s inherent disposition towards doubt and inquiry. The Cognitive dimension encompasses the mental frameworks and knowledge structures used
to process evidence and identify anomalies. The Procedural dimension relates to the
systematic application of skeptical actions within the audit process. Our methodology employs a mixed-methods approach, uniquely combining a controlled laboratory
experiment with practicing auditors and a qualitative analysis of archival audit documentation from a specialized dataset of complex accounting estimates. The experiment
manipulates the priming of each ACP dimension independently to isolate its effect on
judgment accuracy in a simulated fraud detection task. The archival analysis uses a
text-mining protocol to identify linguistic markers of the three skeptical dimensions in
audit workpapers and correlates their presence with subsequent restatements or enforcement actions. Results indicate that the Cognitive dimension, particularly when
focused on alternative hypothesis generation, has the strongest individual effect on
improving judgment accuracy, reducing error rates by approximately 32% compared
to a control group. However, the most significant enhancements occur when all three
dimensions are activated in concert, suggesting a synergistic rather than additive relationship. Furthermore, the archival study reveals that workpapers exhibiting high
levels of Procedural skepticism documentation are 40% less likely to be associated with
flawed audits, even controlling for client risk. This research contributes originality by
deconstructing professional skepticism into testable components, demonstrating their
differential impacts, and providing empirical evidence for a multi-faceted implementation strategy. The findings offer a novel, evidence-based roadmap for audit firms to
design training, performance metrics, and review processes that systematically cultivate the specific dimensions of skepticism most critical for judgment quality.