International Journal of Finance and Managerial Accounting, Vol.8, No.

30, Summer 2023

Develop a qualitative model of professional skepticism

in auditing financial statements

Razie Rahimi
Ph.D. Candidate, Department of Accounting, Kermanshah Branch, Islamic Azad University, Kermanshah, Iran. E-mail:
[email protected]

Mehrdad Ghanbary
Corresponding Author, Assistant Prof., Department of Accounting, Kermanshah Branch, Islamic Azad University,
Kermanshah, Iran.
[email protected]

Babak Jamshidinavid
Assistant Prof., Department of Accounting, Kermanshah Branch, Islamic Azad University, Kermanshah, Iran. E-mail:
[email protected]

Rohollah Jamshidpor
Assistant Prof., Department of Accounting, Kermanshah Branch, Islamic Azad University, Kermanshah, Iran E-mail:
[email protected]
Submit: 27/06/2022 Accept: 18/10/2022

ABSTRACT
Professional skepticism is one of the main aspects of auditing that can lead to risky occasions for auditors. It is
also one of the most delicate and controversial issues which is discussed in practice and standards of auditing.
The purpose of this study is to identify and investigate the factors affecting professional skepticism and to
develop a qualitative model of professional skepticism in auditing financial statements. In order to do so, among
the qualitative research methods, the meta-synthesis method, which includes septet steps, has reviewed and
analyzed 247 cases of previous research findings in recent years (from 1981 to 2021 and 1370 to 1400 solar
calendar). After compositing the model, the opinions of 20 experts and professors have been collected by a
questionnaire in 2021 in order to ensure the validity of the findings. Finally, the factors that have affected the
most on professional skepticism were analyzed and categorized into 4 main categories and 16 axial codes. The
CASP Critical Appraisal Skills Program was used to assess validity and the Kappa coefficient was used to assess
reliability. The components had appropriate validity and reliability. Findings derived from the meta-combination
steps show that four main factors were identified for the professional skepticism of auditing. These factors
include: (1) individual factors, (2) environmental factors, (3) factors related to the auditee, and (4) factors related
to the audit firm. Factors had appropriate validity and reliability. Finally, the research findings were ranked and
provided in form of a qualitative model.
Keywords: Audit Professional skepticism, Meta-synthesis, Shannon entropy.

With Cooperation of Islamic Azad University – UAE Branch 325

326 / Develop a qualitative model of professional skepticism in auditing financial statements

1. Introduction action has been taken to auditors by US Securities and

Auditing has become a key and effective tool whose Exchange Commission, 60 Percentage of auditors'
role is undeniable in the current challenging economy failures during 1998 to 2010 is due to using
space, but over last two decades the position of insufficient level of professional skepticism in auditing
auditing has declined internationally because there are and professional skepticism is one of the three main
several bankruptcies, such as Enron, Wordcom, and reasons for these failures (Mehrani Et al., 1398).
Sanbim, which bankruptcies had international Because auditing is a process that is always
dimensions. By analyzing these bankruptcies carefully, accompanied by professional skepticism, and this can
it becomes clear that the main origin of these be risky for auditors, as well as professional
economical lost derived from accounting and auditing skepticism is one of the most delicate and
(Ahmadi et al., 1398). Misstatements of financial controversial issues which is discussed in practice and
statements due to fraud in listed companies of Tehran in standards of auditing and it is one of the main
Stock Exchange and Iran Fara Bourse Co. (IFB) have aspects of auditing that has a two-way communication
resulted in capital market volatility and pecuniary loss with other auditing subjects, so in a society that deals
for shareholders, and regulatory bodies such as with the auditing profession, research on auditing
Securities and Exchange Organization, The Central subjects, especially professional skepticism is
Bank of Iran (CBI) and Iranian Association of necessary. In this study, by studying and assessing the
Certified Public Accountants have faced a serious specialized theoretical concepts of auditing, new
challenge. This study can answer to the concerns of dimensions of professional skepticism are identified
regulatory bodies about the inadequacy of auditors' and they attempt to design a model for professional
professional skepticism about the identified distortions skepticism in financial statements. In terms of
(Bolo et al., 1399). methodology, most of auditing research is empirical,
According to International Standard 200, review, archival and less attention is paid to qualitative
professional skepticism is a method that involves a research. In this study, we try to design a model for
questioning mind and critical appraisal of situations professional skepticism with a meta-synthesis
that may indicate possible distortions as a result of qualitative method, which discusses the model at
mistake or fraud, as well as a critical appraisal to audit different levels and dimensions, and finally is
evidence. The International Forum of Independent examined and will be confirmed based on auditing
Audit Regulators has suggested that auditors with experts point of view. According to this fact that the
increasing professional skepticism can significantly meta-synthesis qualitative method has rarely been used
improve auditing quality, and that institutions should in auditing research, a qualitative method and a meta-
prioritize their efforts in this area (Nolder and Kadous, synthesis tool have been selected for methodology in
2018). this research. The most important achievement of this
Professional skepticism is essential in all aspects research is to obtain a professional skepticism model
of auditing, from planning and risk assessment to the of financial statements.
critical appraisal of audit evidence in shaping the
auditor's conclusions. That's why both researchers 2. Literature Review
(e.g., Nelson) and legislators (e.g., PCAOB: Public Professional skepticism is a fundamental concept in
Company Accounting Oversight Board) have always auditing that has been prominently demonstrated
emphasized the importance of using an appropriate throughout auditing standards and academic literature.
level of professional skepticism while auditing, The vital importance of professional skepticism
because one of the reasons of auditing profession's derives from this fact that this concept simultaneously
failure in detecting and reporting fraud and financial affects both the costs and the quality of auditing
crisis is stated in current literature as "lack of an process. Despite the great importance of this issue and
appropriate level of professional skepticism" and the relatively high volume of studies that have been
ignoring the factors influencing it and as Beesly et al. done in this field, still there is no obvious framework
(2013) stated in studying the causes of independent related to the definition, concept and practical and
auditors' negligence detected fraud in US Securities operational purpose of professional skepticism
and Exchange, among 81 cases in which auditors legal (Ahangari 1397). According to Auditing Standard

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No. 200 of Iran, entitled "General Objectives of the that judgments are made slowly in a suspicious case.
Independent Auditor and Auditing in accordance with Because making judgments requires consideration and
Auditing Standards", professional skepticism and audit gathering additional supporting information. Search
risk are defined as follows: Clause 13: Professional for knowledge: it is the same as curiosity. Which
skepticism, an attitude which involves a questioning means the auditor has a curious mindset with an
mind (awareness of circumstances that can be a sign of interest to seek evidence. Interpersonal
fraud or mistake) and critical appraisal of audit Understanding: The auditor should be passionate
evidence. Clause 15: The auditor should plan and audit about human attitudes, intentions, and behaviors.
with professional skepticism and be aware of any Interpersonal understanding is one of the
circumstances that may result in material misstatement characteristics of professional skepticism that requires
of financial statements. Clause 16: It is necessary to understanding the reason or motives why the employer
consider professional skepticism at all stages of behaves in a certain way. Self-confidence: Self-
auditing. Clause 17: Professional skepticism is confidence means we are professionally confident
essential for the critical appraisal of audit evidence. enough to be able to claim that our judgment is based
Professional skepticism includes the critical appraisal on the evidence that has been gathered. Self-
of evidence and the reliability of documents and the opinionated: The auditor makes decision
results of inquiries and other information obtained courageously to evaluate, present, and consistently
from executive managers and the governing bodies of auditing statements. Self-opinionated means the
business unit. conclusions of individuals have been made by
The auditor's professional skepticism also includes considering the adequacy of evidence (Ghasemi Nejad
assessing the adequacy and appropriateness of the et al., 1400).
audit evidence obtained from existing circumstances. Professional skepticism arises from the auditor's
For example, in cases where there are risk factors for judgment and is identified by skeptical behavior and
fraud and evidence that is inherently vulnerable to affects the auditor's performance. Professional
fraud, only the evidences support a significant amount skepticism affects the initial planning of auditing and
in financial statements. The auditor may accept the planning affects the type of evidence, and therefore
documents as valid documents unless proved professional skepticism also affects the auditor's
otherwise. However, the auditor should consider the statements. The determinants of professional
reliability of information used as audit evidence. Audit skepticism in auditing performance include:
standards in cases where there is skepticism about the evidence of input and output, skeptical action and
reliability of information or existing signs of fraud (for judgment, motivations, characteristics, knowledge,
example, if circumstances arise during auditing which training, and auditing experience. The relationship of
convince the auditor that a document may not be valid the above components is such that output evidence
or its contents may be distorted) bind him to conduct affects audit training and experience, and audit training
further investigations and make necessary adjustments and experience affects input evidence. Skeptical
to the anticipated auditing procedures or to design and judgment and action are also affected by input
implement other audit procedures to resolve the evidence and also affect output evidence. All of these
problem. The auditor should closely monitor the are influenced by the auditor's motivations,
auditee and management behaviors. Achieve sufficient characteristics and knowledge. These relationships
knowledge of the under study industry and do not indicate that professional skeptical is influenced by
judge without investigation (Griffith et al., 2012; Rose, many factors (Royaei and Mohammadi, 2015).
2007). Skepticism has six characteristics as follows: Professional skepticism is one of the most
Questioning Mind: Professional skepticism important audit priorities that should be considered at
requires a constant questioning, whether obtained all stages of auditing. The human mind is so that it
information and evidence indicate false statements becomes more active when it doubts something.
derived from fraud. Delay in Judgment: The auditor Therefore, auditors should always consider
should be open-minded until he has gathered sufficient professional skepticism at the stage of planning
evidence. One should not be convinced with evidence auditing, gathering evidence, and commenting. This is
that is less convincing. Delay in judgment indicates

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328 / Develop a qualitative model of professional skepticism in auditing financial statements

also important for auditors while assessing audit risk et al. (2013) showed the need for future research about
(Agustin, 2020; Hamshari et al., 2021). professional skepticism by considering the impact of
experience and time budget pressure on auditors'
Research background professional skepticism in a study entitled " Research
on Auditors' Professional Skepticism: Opportunities
Foreign researches
and Analysis for Future Research". His model is an
Hamshari et al. (2021) conducted a study on the
extended model of Nelson (2009) model in which
relationship between professional skepticism and audit
influential factors and prerequisites of professional
risk and internal control and the detection of mistakes
skepticism (i.e. auditor characteristics, knowledge,
and fraud in the Jordanian financial statements. The
ability and motivation) have been replaced by more
findings showed that professional skepticism leads to
extensive classifications such as auditor, evidence,
detect more mistakes and frauds. Agustin (2020)
client, and external environment characteristics.
conducted a study entitled Professional Skepticism and
Therefore, the characteristics of the auditor include the
The Ability of Auditor to Assess Audit Risk. Findings
auditor's behavioral and ethical characteristics, the
showed that professional skepticism affects the
auditor's experience, the auditor's professional and
appropriate assessment of audit risk. Rodgers et al.
academic competence, the auditor's motivation, and
(2017) showed in their study entitled The Impact of
the validity or otherwise of the evidence of the auditee
Knowledge Transfer on Professional Skepticism that
and the external environment were identified as three
knowledge transfer plays an important role in
important factors affecting Professional skepticism.
improving professional skepticism as well as planning
Nelson (2009) conducted a study entitled A Model and
the auditors' auditing process and leading the auditor's
Literature Review of Professional Skepticism in
judgments to accuracy and authenticity. Knowledge
Auditing, which provided a summarized model for
transfer and work experience were also identified as
professional skepticism. A distinction between
two important factors affecting professional
skepticism judgment and skepticism action is
skepticism. Arumega et al. (2016) conducted a study
considered in the center of his model. Input evidence
entitled The Influence of Ethics, Experience and
(including information collected and considered in
Competency Toward the Quality of Auditing with
auditing process) is also an important part of the
Professional Auditor Skepticism as a Moderating
judgment process in his model. In the other part of the
Variable. Ethics affects the quality of auditing results
model, the judgment process is influenced by the
by professional skepticism as a moderating variable.
knowledge factor and it means the auditor's awareness
Finally, auditing ethics, experience and skills were
and knowledge about the limitations created by
identified as factors influencing professional
accounting and auditing standards. Also other non-
skepticism. Alwee Hussnie et al. (2015) conducted a
scientific components, which are intelligence, the
study entitled Evaluation of Indicators and Factors
degree of skepticism of auditor, the level of his
Related to Professional Skepticism in Malaysia. After
confidence; and the auditor's motives have been
the analysis, it was concluded that except delay in
introduced as other factors affecting skepticism.
judgment, five other indicators are applicable in the
Therefore, the characteristics of auditor including the
audit environment of Malaysia. The results showed
auditor's behavioral and ethical characteristics, the
that the type of culture in each country is the most
auditor's experience, and professional competencies
important factor influencing the auditor's professional
were identified as two important factors affecting
skepticism. Coppage & Shastri (2014) had a study
professional skepticism.
entitled " Effectively Applying Professional
Skepticism to improve Audit Quality." The ethical
characteristics of the auditor, the auditor's experience,
Iranian's research
the auditor's professional and academic qualifications, Ghasemi Nejad et al. (2021) conducted a study as The
and the auditor's motivation affect professional Effect of Behavioral Characteristics of Being
skepticism. On the other hand, auditing standards and Opportunistic on the Independent Professional
rules in the country about auditor responsibilities Skepticism of Auditors, which was assessed the theory
affect professional skepticism as external factors. Hurt of personality psychology. Findings show that
behavioral characteristics of being opportunistic have

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 International Journal of Finance and Managerial Accounting / 329

negative and meaningful relationship with the a study entitled Providing a Model for Understanding
professional skepticism of independent auditors and its the Professional Skepticism of Auditors with a Content
components including questioning mind, delay in Analysis Approach. According to the results of this
judgment, search for knowledge, interpersonal research in the qualitative dimension, four main
understanding, self-confidence and Self-opinionated. components and 13 sub-components were determined
Abedini Naeini (2020) conducted a study entitled as the components of intended model. In the
"Developing a Framework to Measure the Professional quantitative part, the results of regression model test
Skepticism of Auditors Using Multi-criteria Decision- showed that psychological characteristics, personality
making Methods." The results show that the index of characteristics, professional skills and environmental
analytical and decision-making power, auditing and factors have a positive and meaningful effect on the
trusteeship history were identified as the most professional skepticism of auditors. Gholamrezaei and
important criteria and personal oversight, increasing Hassani (2017) conducted a study entitled The Role of
stakeholder awareness and power-seeking were Mindset, Ethical Values and Behavioral Deviations in
recognized as the least important criteria. Rahnamania Auditors' Professional Skepticism. The results show
(2020) conducted a study as The Effect of Social that as thinking phase becomes longer, the auditors'
Adjustment on The Auditor's Professional Skepticism level of professional skepticism increases; Also, as the
with The Moderating Effect of postgraduate education level of ethical values among auditors increases and
and work experience. The results of assessing the their behavioral deviations decrease, their level of
hypotheses showed that social adjustment has a professional skepticism increases. Valian et al. (2017)
positive effect on professional skepticism and the conducted a study entitled Designing an Interpretive-
auditor's postgraduate education and work experience Structural Analysis Model for Factors Affecting
have a moderating role in this effect. Birjandi et al. Auditors' Professional Skepticism. Based on the
(2019) conducted a study entitled The Study of the designed model, the results show that the most
Effect of Professional Ethics on The Auditor's important factors of professional skepticism are
Professional Skepticism. The results showed that five auditor neutrality, adherence to auditing standards,
components of professional ethics have a positive and adherence to auditing skills and adherence to the rules
significant effect on the professional skepticism of and regulations of stock exchange trading which were
auditor; but the greatest impact is related to the indicators of the auditor's independence and expertise
component of professional competence and care. in Delphi results. Also, at the highest level and in fact
Kargozar et al. (2019) conducted a study entitled the least effective factor on auditors' professional
"Studying The Relationship Between Temperament skepticism, the dimension of authority explanation is
and Professional Skepticism of Auditors". Overall, the one of the indicators of responsibility as a
findings showed a significant relationship between psychological characteristic. Tahriri and Piri Saqerloo
participants' temperament and their level of (2016) conducted a study entitled Auditors' Perception
professional skepticism. So that people with hot and on the Concept of Professional Skepticism in Auditing.
dry temperaments had more professional skepticism The results indicate that auditors with different
and people with cold and wet temperaments had less characteristics have different perceptions on the
professional skepticism. Mehrani et al. (2019) fundamental and key concept of professional
conducted a study entitled Designing a Professional skepticism, and this can be a challenge for auditing
Audit Skepticism Model Based on Grounded Theory. profession and requires more attention in the field of
The most important result of this research can be training and standardization. Hosseini et al. (2015)
considered as achieving a paradigm model of auditor's conducted a study entitled Explaining the Components
professional skepticism and the components of Affecting Auditors' Professional Skepticism Based on
paradigm model extracted from the present study Individual Dimensions. The results on the effect of
include 25 categories, 80 concepts of relative integrity search for knowledge, self-confidence and
and comprehensiveness. According to the research interpersonal understanding on auditing professional
findings, having "suspicion-based skepticism" as the skepticism support research hypotheses and other
core of professional skepticism in auditing is the most factors do not explain professional skepticism.
important finding. Valian and Safari (2018) conducted

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330 / Develop a qualitative model of professional skepticism in auditing financial statements

Research methodology
This research is an applied research in terms of Step 2: Systematic search of texts, in this step, the
purpose. The research methodology is a qualitative researcher systematically searches for articles
method and a Meta-Synthesis tool. A meta-study is an published in various and valid Iranian and foreign
in-depth analysis of research work done in a specific scientific journals and using related keywords.
field. The meta-study is different from terms such as Selecting the keywords for search first take place in
meta-analysis, meta-synthesis, meta-theory, and meta- general and then more detailed. In order to do so, the
method. The meta-study includes all of these concepts. words of following table were examined individually
Meta-study is known as meta-synthesis if it is worked or in combination in Persian and English, and finally
as qualitative one on the concepts used in previous 116 English articles and 131 Persian articles were
studies. In fact, meta-synthesis is the composition, found.
analysis and interpretation of the main findings of Step 3: Search and select appropriate texts, in this
previous research (Dayanti Dilmi, Zahra., 2018). To step, the researcher, after studying and filtering
identify the factors affecting professional skepticism, scientific research articles several times, considers
the meta-synthesis method has been used, which is an various parameters such as title, abstract, content,
appropriate way to obtain a comprehensive details of the article (author name, year) and ...
combination of this issue based on the findings of removes articles that is not appropriate for the research
Iranian and foreign articles. In this research, the seven- question and purpose and are not considered in the
step model of Sandlowski and Barso (2007) is used to meta-Synthesis process.
design the model, which includes the following steps:
Step 4: extracting the information of texts, the
researcher has studied selected and finalized articles
Step 1: Setting up a research question is the first step
several times in order to obtain the findings in the
in setting up research questions.
separate contents in which the main and primary
studies were conducted. From sites: The Scientific
Table 1: Research questions to start the meta-synthesis
Information of The Academic Center for Education,
method
meta-synthesis qualitative research Culture and Research Database
Component (https://www.sid.ir/fa/journal/), Institute for
questions
Identifying the elements, dimensions Humanities and Cultural Studies (http://ensani.ir/fa),
Research and indicators related to professional Noor Specialized Magazines (Noormags)
Objective (What) skepticism and designing the (https://www.noormags.ir/), Publisher of Iranian
professional skepticism model Journals and Conference Proceedings (Specialized
All books, dissertations and articles Publisher of Iranian Conferences) (
Previously studied published in various reputable Iranian
https://civilica.com/), Elmnet Scientific Information
sources by various and foreign scientific journals that have
researchers (Who) paid attention to the factors affecting
Database (https://elmnet.ir), Iranian Research Institute
professional skepticism. for Information Science and Technology (IranDoc)(
Reviewing sources, identification and https://ganj.irandoc.ac.ir) , and Journal of Accounting
How to conduct prioritization of effective factors and and Auditing Studies 131 articles were found, of
research (How) indicators, analyzing and classifying which 61 were rejected due to their titles, 22 were
identified concepts and indicators rejected by studying their abstracts, and 9 were
All existing and available articles rejected by studying the text of research. Finally, 39
Research time
between 1981 and 2021 - All available sources were considered to identify the factors
frame (When)
articles in Iran from 1991 to 2021
affecting professional skepticism in auditing. The final
articles were also selected based on found references
According to the table above, research questions
(author's name and surname, year, article name) to
include:
implement the next steps of the meta- synthesis
1) What are the components affecting auditors'
approach. In relevant tables, CASP is used to
professional skepticism?
determine the validity of research tools that are studied
2) What is the qualitative model of professional
articles and texts. By using the CASP method with 10
skepticism of financial statements?

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qualitative conditions, each article should be evaluated conditions. The articles with a total score of 25 and
in terms of quality. A score between 1 and 5 is upper will be confirmed in terms of quality and the rest
assigned to each of the articles based on each of these of the articles will be deleted.

Figure 1: The process and the number of sources reviewed in meta-synthesis (researcher's findings)

Table 2: the components of professional skepticism in Persian articles along with CASP scoring
CASP
Title Author (year) Identified factors
score
The effect of opportunistic behavior on the
Ghasmi Nejad et
professional skepticism of independent auditors: a Behavioral characteristics, moralism, regulatory rules 40
al. (2021)
test of personality psychology theory
Professional socialization and professional
Shirzad et al.
skepticism in auditing: A test of social identity Socialization 30
(2020)
theory
developing the professional skepticism evaluation
framework of certified auditors using multi-criteria Analysis and decision-making power index, Audit
Abedini Naeini
decision-making methods (case study: official history, trustworthiness Personal supervision of affairs 50
(2020)
auditors of Justice Administration of Kerman Increase of beneficiaries and power seeking
province)
Studying the impact of auditor's professional
skepticism on assessing fraud risk, considering the Hosseini et al. Social undermining, social support, experience, skill
30
interfering effect of communication skills and (2020) and knowledge of auditors, behavioral characteristics
social undermining.
Morality, individual characteristics, characteristics
The role of auditors' narcissistic personality on their Mafi Balaei
including authority, ostentation, dominance, 30
professional skepticism (2020)
exploitation, entitlement, sufficiency and egoism
The effect of gender, education and conspiracy
Ghasmi Nejad et
mentality on auditor's professional skepticism: a Gender, education and behavioral characteristics 40
al. (2020)
test of attitude theory
The role of contingent risk-taking in managers'
decisions in relation to organizational skepticism Naji (2020) contingent risk-taking in managers' decisions 29
and professional skepticism in auditing firms.
The effect of social adjustment on the auditor's
Rahnamania postgraduate education of auditor, social adjustment,
professional skepticism with the moderating effect 45
(2020) work experience
of postgraduate education and work experience
Professional ethics, professional principles and
studying the effect of professional ethics on the Birjandi et al. regulations, independence and impartiality,
40
auditor's professional skepticism (2020) confidentiality, integrity and honesty and competence,
professional care.
The impact of auditor quality on auditing quality Abdolrahimi
auditor quality 35
with the mediating role of professional skepticism (2018)

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 332 / Develop a qualitative model of professional skepticism in auditing financial statements

CASP
Title Author (year) Identified factors
score
Gholamrezae&
The effect of personality disturbance on
Hasani personality disturbance, individual characteristics 35
professional skepticism of independent auditors
(2019)
Studying the effect of auditor's partner's perceived
support on attitudes based on neutrality and Bameri et al. Auditing planning
28
skepticism in professional skepticism and auditor's (2019) Auditing methods
behavioral consequences.
Studying the relationship between auditors' Kargozar et al.
The type of individual's temperament 29
temperament and professional skepticism (2019)
The effect of goal orientation and self-efficacy on Hosseini Managerial style of auditing firm, individual
28
auditor's professional skepticism Khomak (2018) characteristics
The role of auditor's personality on auditing quality Moghimi
using the mediating component of professional Kandeloosi Personality characteristics of auditor 30
skepticism (2019)
Among the auditor's quality dimensions, the auditor's
Studying the effect of auditor's work quality on Sorkhan experience dimension had the greatest impact on
his/her professional skepticism and its relationship Beigipour professional skepticism in the auditor's work and was in 35
with the quality of auditing (2019) the first place. Then competence, commitment,
independence and ethics of auditor are in the next levels
Independence and impartiality, auditing and transactions
complexities, auditor's personal characteristics, audit
evidence characteristics, auditing firm's characteristics,
employer's motivations, auditor's business risk, audit
risk, information asymmetry, judgmental nature of
Designing the audit professional skepticism model Mehrani et al. auditing , using alternative solutions, validation of
50
based on grounded theory (2020) evidence, planning and adjustment of investigation
programs, composition of auditing team, supervision
and monitoring the work, knowing employer, society
culture, external audit environment, social responsibility
of auditor, public interests of society, characteristics of
Employers, events during the auditing
Thinking styles and professional skepticism in Heidar &
auditing (testing Theory of Mental Self- Nikoomaram Thinking style 28
Government) (2018)
The effect of organizational and professional
Rezaei et al. Organizational commitment and professional
identity on the professional skepticism of 45
(2018) commitment
independent auditor
Providing a model for understanding the
Valiant $ Safari
professional skepticism of auditors with content Independence and impartiality 40
Gerayeli (2018)
analysis approach
Studying the effect of audit management by
Safipour Afshar
managers to detect distortions by auditors in terms Characteristics of managers 29
et al. (2018)
of the auditor's professional skepticism
The relationship between ethics, experience and
professional competence of auditors with audit Daryaei & Azizi
Ethics, experience, professional competence 30
quality (according to the moderating role of (2018)
professional skepticism)
Comparison of professional skepticism, risk taking
and professional competence among male and Nazari (2018) Gender 30
female auditors
studying the relationship between the auditor's
temperament and professional skepticism in Kargozar (2018) Hot temper or cold temper 30
auditing
The effect of knowledge transfer on the skepticism
Bahrami (2018) knowledge transfer 40
of auditing profession
Identifying the factors affecting the professional Eshrestaghi auditors experience, auditors level of education,
45
skepticism of auditors of financial tribunal (2017) organizational level and gender of auditors
The effect of ethics, experience and competence on
Khajevand Ethics, experience and qualifications, conditions of
auditing quality considering the moderating role of 35
Jafari (2017) participation in the studying course, type of industry
professional skepticism from the perspective of

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 International Journal of Finance and Managerial Accounting / 333

CASP
Title Author (year) Identified factors
score
senior auditors of auditing institutions
Personality characteristics include: extroversion,
The relationship between five-factor characteristics Azizzadeh
adaptability, openness and acceptance of experience and 30
and auditors' professional skepticism Haroozi (2017)
responsibility
The relationship between auditors' personality Azizzadeh
Individual characteristics 30
characteristics and professional skepticism Haroozi (2017)
The role of thinking styles, moral values and
behavioral deviations in the level of professional Gholamrezaei
Thinking style and moral values 45
skepticism of auditors &Hasani (2019)

Studying the effect of ethics, experience and

professional competence of auditors on the quality Ethics, experience and professional competence of
Azizi (2017) 35
of auditing, considering the moderating role of auditors
professional skepticism.
Designing an Interpretive-Structural Analysis
Valian et al.
(ISM) model of factors affecting auditors' Independence and impartiality 50
(2018)
professional skepticism
work experience and professional knowledge and skills,
audit level, gender, professional competence and
membership of the certified accountants society, field of
study, education level, gender, internal control system
Auditors' understanding of the concept of Tahriry et al
of studying unit, auditor's knowledge of the industry, 20
professional skepticism in auditing work (2016)
Independence of auditor, good reputation of audited
entity, rulesuits against audited entity, audit time
pressure, audit fees, possibility of rulesuits against
auditor.
Studying the relationship between two dimensions
Rajabalizadeh Internal controls of the investigated unit and audit
of skepticism and neutrality of professional 27
et al. (2015) standards
skepticism with auditor's professional judgment
Explaining the factors affecting the professional Search for Knowledge, self-confidence, interpersonal
Hosseini et al.
skepticism of auditors by relying on individual understanding, audit firm ownership, respondents' age 48
(2015)
dimensions and their employing period.
Studying the effect of employer's confidence about
Mahmoudian Characteristics of managers of the investigated unit and
using of professional skepticism in the auditor's 30
(2012) internal controls
judgment
Age, work experience, gender, marital status, the
organizational rank of auditor and the size of audit firm,
the management ability of owner, the management
reputation of the owner, the accountability of
management, the religious beliefs of the management,
the observance of ethical norms by management, the
benevolence of the management. The internal control
Analyzing the auditors' point of view according to
system of owner company, the capital structure of
the factors affecting their trust in the management Zafarzadeh
owner company, the profitability of owner company and 35
of employer and the documents provided by (2017)
the auditing records of owner company, as well as other
her/him
issues including the existing unusual pressures on the
activity and manager of owner company, the high risk
of type and field of activity of owner company, existing
ambiguity especially in association with continuation of
the activity of owner company, there is a commonality
and relation between the management of owner and
auditor

The average CASP score of 39 Persian articles is 27 and the highest score was 50. I did not consider the
35.53, which indicates high validity of the research table of Iranian articles.
tools (31 to 40). The scores of articles ranged from 27
to 50. In other words, the lowest score of articles was

Vol.8 / No.30 / Summer 2023

334 / Develop a qualitative model of professional skepticism in auditing financial statements

English sources studied professional Step 5: Step 5 is the analysis and synthesis of
skepticism qualitative research findings in meta-synthesis method.
116 articles were found after controlling different sites During the analysis, subjects or themes are searched
(Elsevier, Science Direct, Emerald, ProQuest, that have become stable among the studies included in
Research Gate, Google) 27 articles were rejected due meta-synthesis. Sandelowski and Barroso entitle this
to their title, 48 articles were rejected by studying the method "thematic study". In this method, first the
abstract, and 5 articles were rejected by studying the researcher considers all factors extracted from studies
text of research and finally 36 articles were accepted as as codes, and then he categorizes them in a similar
follows. concept by considering the meaning of each of these
The average score of CASP of 36 articles is 36.91, codes (Dianati, 2018).
which indicates high validity of research tools (31 to In this research, first all factors extracted from
40). The average validity of all 75 English and Persian articles are considered as codes and then they are
sources is 36.22, which indicates high validity of categorized in a similar concept by considering the
research tools (31 to 40). concept of each of the codes which are briefly shown
in table 5.

Table 3: Professional skepticism components of English articles with CASP scoring

CASP
Title Author (year) Identified factors
score
The Relationship of Professional Skepticism to the
Risks of Auditing and Internal Control, and the Hamshari et al.
Components of audit risk 45
Discovery of Fraud and Core Errors in the Financial (2021)
Statements in Jordan
Research Insights- Auditor Professional Skepticism
Brazel and
Part II: Mindset, Prompts and Environment and Components of audit risk 45
Schaefer (2019)
Contextual Factors
Kusumawati A
The effect of auditor quality to professional
Syamsuddin Auditor quality 47
skepticism and its relationship to audit quality
(2018)
Grounding the professional skepticism construct in Nolder and Behavioral characteristics, social
45
mindset and attitude theory: A way forward Kadous (2018) characteristics
Knowledge management: The effect of knowledge
Rodgers et al.
transfer on professional skepticism in audit knowledge transfer and work experience 40
(2017)
engagement planning
Neutral and presumptive doubt perspectives of Cohen et al.
The type of auditor's perspective 35
professional skepticism and auditor job outcomes (2017)
Auditor skepticism and financial crises: The Nigerian Out and Elias Behavioral characteristics, social
30
factor (2017) characteristics
The Influence of Ethics, experience and competency
Arumega et al
toward the quality of auditing with professional Ethics, experience and auditing skills 45
(2016)
auditor skepticism as a Moderating Variable
The Influence of Information Order Effects and Trait
The information systems of considering
Professional Skepticism on Auditors’ Belief Yankova (2015) 40
company
Revisions
Alwee Hussnie et
Re-Validation of Professional Skepticism Traits Culture in every country 32
al (2015)
The auditor's ethical characteristics, the
auditor's experience, the auditor's professional
Effectively Applying Professional Skepticism to
Coppage & Shastri and academic competence and the auditor's
improve Audit Quality. The Meaning of Professional 35
(2014) motivation on the professional Skepticism of
Skepticism
auditing standards and the existing rules in the
country in association with auditor's

Vol.8 / No.30 / Summer 2023

 International Journal of Finance and Managerial Accounting / 335

CASP
Title Author (year) Identified factors
score
responsibilities as external factors of corporate
governance characteristics of the unit under
consideration. Including the internal control
system of the company, the characteristics of
the board of directors and the audit committee,
and the available documents
The auditor's characteristics include the
auditor's behavioral and ethical characteristics,
Research On Auditor Professional Skepticism – the auditor's experience, the auditor's
Literature Synthesis and Opportunities for Future Hurt (2013) professional and academic competence and the 50
Research auditor's motivation, and the validity or
invalidity of the evidence of unit under
consideration and the external environment.
Audit risk, judgmental nature of auditing,
Enhancing Auditor Professional Skepticism Glover (2013) independence and impartiality, reducing audit 45
risk
Audit risk, audit risk mitigation, audit team
Auditor Objectivity and Skepticism – What’s Next? Franzel (2013) 45
composition, evidence validation
Inducing Professional Cognitive Dissonance to
Mocadlo (2012) training audit institute 30
Increase Auditors Professional Skepticism
The Effects of Auditor Rotation, Professional
Bowlin et al.
Skepticism, and Interactions with Managers on Audit Auditor rotation 30
(2012)
Quality
An Experimental Investigation of Delayed Persuasion
Understanding the complexity of work of the
During Analytical Procedures: Are Auditors Brewester (2012) 35
unit considered by auditor
Susceptible to the Sleeper Effect?
Auditing Complex Estimates: Understanding the Griffith et al.
The behavior of managers 30
Process Used and Problems Encountered (2012)
Professional Skepticism: The Effects of a Partner’s
Carpenter & The opinion of auditing institution about
Influence and the Level of Fraud Indicators on 30
Reimers (2012) considered unit Management style of auditors
Auditors’ Fraud Judgments and Actions
Plumlee et al.
Training Auditors to Think Skeptically Training auditors 30
(2012)
The Role of Professional Skepticism, Attitudes and
Nolder (2012) Auditor's feelings 30
Emotions on Auditor’s Judgments
Effects of ethical context and Machiavellianism on Shafer & Wang
Behavioral characteristics 30
attitudes toward earnings management in china (2011)
Introverted and extroverted personality, the
The Role of Personality and Motivation in
Rosman (2011) degree of support from the director of auditing 35
Professional Skepticism When Tone at the Top Varies
firm, the management style of audit directors
Encouraging Professional Skepticism in the Industry Auditor's experience, auditor's knowledge
Grenier (2011) 35
Specialization Era about the industry
The effect of benchmarked performance measures and
strategic analysis on auditors’ risk assessments and Knechel (2010) Auditor intelligence 35
mental models
Planning and adjustment of auditing programs,
Development of A Scale to Measure Professional validation of evidence, using alternative
Hurt (2010) 45
Skepticism solutions, planning and adjustment of auditing
programs, validation of evidence
Professional skepticism of auditors: across cultural Endrawes & Society's culture, the value of respect for
35
experiment. Monroe (2010) auditors in society
The effects of ingratiation and client incentive on Robertson (2010) Managers' relationship, auditor's experience 40

Vol.8 / No.30 / Summer 2023

336 / Develop a qualitative model of professional skepticism in auditing financial statements

CASP
Title Author (year) Identified factors
score
auditor judgment
The development and validation of a new Dahling et al.
Self-interest and selfishness 35
Machiavellianism scale (2010)
The effect of documentation structure and task
Agoglia et al.
specific experience on auditors’ ability to identify Auditor experience 30
(2009)
control weaknesses
The auditor's characteristics including the
auditor's behavioral and moral characteristics,
the auditor's experience, the auditor's
A model and literature review of professional
Nelson (2009) professional and academic competence, the 45
skepticism in auditing
auditor's motivation, and the validity or
invalidity of the evidence of unit under
consideration.
Aggressive Financial Attention to Evidence of
Reporting and
Rose (2009) Industry-specific auditing experience 35
Intentional Misstatement Judgments: Effects of
Experience and Trus
The Influence of Skepticism and Previous Experience
Popova (2006) Previous audit work experience 30
Auditor Judgments on
Auditor acceptance of dysfunctional audit behavior:
Donnelly et al.
An explanatory model using auditors’ personal Behavioral characteristics, auditing program 30
(2003)
characteristics
Experimental investigation of ethical standards and
Ghosh & Crain
perceived probability of audit on intentional Individual characteristics, work discipline 35
(1996)
noncompliance
Anchoring and adjustment in probabilistic inference Joyce & Biddle Auditing experience and skills, behavioral
40
in auditing (1981) characteristics

table 4: Coding factors affecting professional Skepticism

Factors affecting
Axial coding Secondary factors open coding
professional Skepticism
C1 Professional competence C01
C1 Behavioral characteristics C02
Individual characteristics
C1 Gender C03
C1 Temperament C04
C2 Corporate governance C05
Characteristics of C2 Auditing risk C06
considering unit C2 Characteristics of managers C07
C2 Industry or service characteristics C08
C3 management style C09
C3 planning of auditing C10
Characteristics of auditing
C3 The size of the institution C11
firm
C3 Education C12
C3 Independence C13
C4 Economic conditions C14
Environmental factors C4 Rules and standards C15
C4 society culture C16

Vol.8 / No.30 / Summer 2023

 International Journal of Finance and Managerial Accounting / 337

Step 6: quality control and content analysis:

credibility means concepts such as defensibility, Table 5: Characteristics of respondents
believability, verifiability and even reflectivity of Respondent characteristic Number
research results in a qualitative research. In this Certified auditor 7
research, it is necessary to prove whether the Auditor 11
conducted research is reliable and valid. The validity Auditing professor 2
of the questionnaire of this research is done through Total 20
Shannon Entropy method in such a way that the results
and findings of the research are provided to the Cohen's kappa coefficient (kappa index) is used to
masters of this field to study and comment, and the determine the reliability of components affecting
point of their views and modifications will be applied. professional skepticism which have been coded. If the
In this case, it can be stated that the questionnaire has value of this coefficient is upper than 0.6, it is reliable.
appropriate validity. For this research, 20 experts In the following, first the coding table of two
familiar with specialized auditing topics were used, evaluators and then Table of Kappa coefficient
and the characteristics of respondents are described in calculations for the components of professional
the following table to determine the importance of skepticism are provided.
each of the components of professional skepticism:

Table 6: Coding of two evaluators

codes Secondary factors Encoder1 Encoder2
C01 Professional competence 1 1
C02 Behavioral characteristics 1 1
C03 Gender 1 1
C04 Temperament 1 1
C05 Corporate governance 2 2
C06 Auditing risk 2 3
C07 Characteristics of managers 2 2
C08 Industry or service characteristics 2 2
C09 management style 3 3
C10 planning of auditing 3 3
C11 The size of the institution 3 3
C12 Education 3 3
C13 Independence 3 3
C14 Economic conditions 4 4
C15 Rules and standards 4 4
C16 society culture 4 4

Table 7: Kappa coefficient calculations for the components of professional skepticism

Encoder 2
Dividing Multiply the
Cross-table not Category Category Category Category
Total sum by corresponding
selected 1 2 3 4
total lines
0 0 0 0 0 0 0 0
Category 1 0 4 0 0 0 4 0.250 0.063
Category 2 0 0 3 1 0 4 0.250 0.047
Category 3 0 0 0 5 0 5 0.313 0.117
Encoder1
Category 4 0 0 0 0 3 3 0.188 0.035
total 0 4 3 6 3 16 0.262
Dividing
0.000 0.250 0.188 0.375 0.188
sum by total
Value of agreement
PAo 0.938 kappa = Pi = (PAo – PAE)/ (1 – PAE )
between two evaluators
Expected value of
PAe 0.262
agreement
Pi Kappa coefficient 0.915

Vol.8 / No.30 / Summer 2023

338 / Develop a qualitative model of professional skepticism in auditing financial statements

According to the Kappa coefficient which is upper environmental factors are the last one. In the
than 0.6, the components of professional skepticism following, each of these cases will be explained.
model have the required reliability. Therefore, the final model of professional skepticism
is provided as follows:
Step 7: Providing the findings, in this stage of meta-
synthesis, the findings obtained from previous steps
show that four main factors were identified for
professional skepticism. These factors are: (1)
individual factors, (2) environmental factors, (3)
factors related to the considered unit and (4) factors
related to the auditing firm. In the following, Shannon
Entropy method is provided which performs data
processing in terms of content analysis. In entropy
method, the greater the value of an index, the more
important that index is. To rank the components of
professional skepticism using Shannon Entropy, they
ask to score in the form of numbers 1 to 20 to assess
the importance and rank each factor. The responses of
20 relevant experts are entered to an Excel
spreadsheet, then the responses are normalized. In
order to normalize, the score of each factor is divided
by the sum of the numbers of that factor and the
corresponding rank w is obtained. In table 8, the rank 5. conclusion
of each factor is presented. The purpose of this research is to study the theoretical
concepts of auditing in order to achieve a professional
Table 7: Ranking the main factors of professional skepticism model in auditing using a meta-synthesis
skepticism by Shannon entropy method approach. The special nature of this research
characteris characteris methodology and using meta- synthesis qualitative
Individual
tics of tics of environme
characteris strategy in order to develop the model and validate
considered auditing ntal factors
tics professional skepticism model is a new affair in the
unit firm
researches of this field, which has been paid less
35.50
Ej 8.8022 8.9483 8.9658 8.7937 attention in the past and is the most important
99
difference between this research and the previous ones.
W
0.2479 0.2520 0.2525 0.2476 In qualitative research concepts and categories that
i
have been paid less attention before they are identified,
and each of them can be a topic for further research, in
As results show, there are four factors affecting addition to this fact that the subject under studying is
professional skepticism, the characteristics of auditing discussed carefully. The final model provided in order
firm have the most impact on professional skepticism to use in the field of auditing, estimation of
and it is in the first place, the reason is that professional skepticism in the auditing of financial
professional skepticism originates from auditor's mind statements by auditing organization (merging rules and
in the first step. The auditing firm affects its auditor by regulations in association with professional
its policies and approaches. In the second place, the skepticism), the community of certified accountants
characteristics of considered unit affects professional (quality control and monitoring auditors' work),
skepticism, and this issue is also due to this fact that auditing institutions that are members of the society of
the weakness and strength of internal controls and certified accountants of Iran and auditors should be
other related matters are originated from considered used in practice. In order to do so, 75 Iranian and
unit, and these items affect the attitude of auditors. foreign articles were studied in order to identify the
Individual characteristics are in the third place and factors affecting the professional skepticism of

Vol.8 / No.30 / Summer 2023

 International Journal of Finance and Managerial Accounting / 339

auditors. The evidence obtained from this research, the are: rules and standards, economic conditions, society's
opinions of experts and professors support this claim culture. Standards have an effect on auditors' attitude,
that indicators such as individual characteristics, and auditors' professional skepticism becomes stronger
characteristics of considered unit, the and weaker based on rules and standards. The
characteristics of auditing firm, rules and economic conditions affect the activities of companies,
regulations and standards have affect professional as well as the social culture that will cause the auditors
skepticism the most. improving their level of professional skepticism based
The characteristics of auditing firm include: on it. According to the meta- synthesis method which
firm size, auditing plans, independence, training, and is used, the results of this research are derived from the
management style. Professional skepticism originates studies of other researchers, so they are completely in
from the auditor's mind in the first place, the auditing line with the previous researches. Despite the fact that
firm effects auditor's mind with its policies and in last ten years, professions have paid attention to the
methods. According to the characteristics of auditing issue of professional skepticism in auditing and many
firm, many factors affect the professional skepticism academic research have been done in this field,
of auditors. As findings show, the size of firm is the researchers are advised to consider selected
most important factor, which is because the size of a indicators in the research in order to study required
firm affects the professional methods and power of infrastructures and existing challenges for professional
employees and their professional skepticism. Also, it is skepticism in the auditing of financial statements. As it
auditing planning and independence that affects was found, the characteristics of auditing firm affected
professional skepticism, because the degree of on professional skepticism the most, therefore,
independence will increase the auditor's motivation to auditing firms should consider all the issues that will
find more distortions. Management style due to its be the reason of better opinion of auditors. They
effect on company's approach, auditing planning due should pay attention to preserve professional
to using appropriate auditing methods and training are competence in addition to acquire professional
the components of auditing firm which affect competence. Auditing firms should have appropriate
professional skepticism. Large auditing firms that have planning to establish reasonable professional
an efficient management style, design strong internal skepticism between auditors and consider this issue in
controls and will definitely use more powerful all of their affairs. Auditors should be in line with the
financial software, and will also pay more attention to firm’s policies in terms of their professional
training and planning for their employers, these things skepticism. In addition, firms should always have
result in accomplishing appropriate auditing by an continuous programs to improve the management
independent auditor with professional skepticism, style, proper planning of auditing, independence and
which will ultimately result in right judgment and high training of auditors, and go forward to increase the size
quality auditing. The characteristics of considered of the firm. Because by increasing the size of firm,
unit include: corporate governance, industry or service they will do bigger things and this issue have to be
characteristics, managers' characteristics, and audit paid a lot of attention.
risk. It affects professional skepticism, which is also
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