Professional judgment in accounting and auditing decisions
The increasingly complexity of the worldwide business environment requires that firms provide information via financial statements and disclosures that are significant and relevant to a wide range of decision makers. Accounting and auditing professionals are the main actors called to guarantee that the information provided is useful to both existing and potential users. However, the contribution of accounting and auditing professionals to the creation of the information and its audit requires subjective professional judgment.
Accounting professionals make judgements when recognizing and measuring transactions, as well as when they select what information to disclose, how to report it, and the level of aggregation. There needs to be adequate detail for the information to be useful, but information overload must be considered.
Auditors make professional and ethical judgments when assessing the accuracy of the information and the disclosures. They need to consider the application of accounting principles, rules and standards as well as interpret relevant ethical requirements.
The use of professional judgment is more intuitive in settings like interpretations of standards, risk assessment, and the definition of accounting and auditing procedures. A critical area of professional judgment in accounting and auditing is to ascertain materiality. This concept is key to improving the decision usefulness of corporate reporting based on the target audience. Establishing whether accounting information is material is a matter of judgement and a range of factors and circumstances, including both quantitative and qualitative factors, as well as the nature of the information reported.
From an accounting perspective, the question is not only whether an information item is material, but how it becomes material, with consideration of the social context within which a firm operates. From an auditing perspective ascertaining materiality is a combination of tasks and interpersonal interactions which covers each phase of the audit process.
Overall, the application of professional judgment in accounting and auditing processes is significant and of utmost importance to many constituents, hence it needs to be clarified. This includes enhancing our understanding of the requirements, attitudes, parameters, procedures and factors that influence professional judgment.
International accounting and auditing standards frequently remind us of the concept of professional judgment, although without clearly defining it. Despite such guidance, there is a wide variety of concepts and approaches (e.g. intuitive vs structured professional judgement).
There have been judgment-related studies published especially in the context of auditing, however the subject of professional judgments is still somewhat of a black box and further research is needed (e.g. Brown et al., 1993; Gao and Zhang, 2019).
In this special issue of the Journal of Accounting and Public Policy we invite scholars and researchers to submit papers exploring facets of “Professional judgment in accounting and auditing decisions”.
This call is broadly defined to include research that addresses topics across all domains of accounting and auditing, covering a wide range of issues and processes related to the use of judgments, with a preference to the application of materiality.
Quantitative, qualitative, and theoretical research approaches may be employed, and authors are encouraged to draw on different theories to explore the rationality of professional judgment across alternative perspectives. Simulation and experimental methods are also encouraged.
Examples of topics that may be addressed include, but are not limited to:
❖ the impact of culture on the application of professional judgment
❖ the influence of regulation on professional judgment
❖ the ethical implications involved with professional judgment
❖ personal attitudes and types of professional judgment
❖ the perception of risk and professional judgment
❖ determinants of materiality judgments
❖ how professionals judge materiality in their decision-making process
❖ interplay between corporate governance and professional judgment
❖ interplay between approaches to corporate reporting and professional judgment
❖ the impact of professional judgment on business management
❖ judgements regarding the inclusion and measurement of environmental, social and governance (ESG) and corporate social responsibility (CSR) informationResearch could include aspects of the following:
❖ social construction;
❖ cultural theories;
❖ behavioral approaches;
❖ rationality in psychology and economics;
❖ decision making perceptions.
We call for original and unpublished research manuscripts across different theoretical backgrounds and settings. Manuscripts addressing financial reporting, sustainability reporting, governance, auditing, information systems, management accounting, enterprise risk management and social and environmental accounting and reporting, in the for-profit, public and non-profit sectors, are considered of relevant interest.
Guidelines for authors
Manuscripts should be submitted by 2024, 15st of February.
All submissions must adhere to the format and style guidelines of the Journal of Accounting and Public Policy. The review process for the special issue will consist of papers being subject to an initial review by the co-editors of the special issue and to blind reviews by two anonymous referees. The editor of the Journal of Accounting and Public Policy will have oversight of the final papers submitted.
Papers for the special issue may be submitted through the Editorial Manager electronic platform. You can access the platform through this link:
Alessandra Allini, professor of financial accounting, Department of Economics, Management, Institutions, University of Naples Federico II.
Marco Maffei, professor of financial accounting, Department of Economics, Management, Institutions, University of Naples Federico II.
David A. Ziebart, professor of accountancy, Gatton College of Business and Economics, University of Kentucky.
This special issue is associated with the Workshop “Professional judgment in accounting and auditing decisions” that is being held in Naples (Italy), University Federico II on the 10th of November, 2023.
The Workshop offers the opportunity to discuss in advance papers prepared by scholars interested in submitting their manuscripts to this call. Please note that this is an open call for the special issue of the journal and is not restricted to attendees at this workshop. Vice versa, presenting workshop authors will be encouraged to submit their papers and will receive comments and feedback in time to review their research to meet the special issue deadline.
Applicants to the Workshops are required to submit a full paper to email@example.com by 2023, 30th of September.
Authors will be notified of acceptance by 2023, 20th of October.
Presenting authors of accepted papers should register by 2023, 25th of October.
Registration Fee: 100 Euro
Papers submitted to the Workshop will be subject to a blind review process. Moreover, all presenters will be allocated a discussant who will provide the author(s) with written feedback in addition to leading the discussion of the paper following the presentation. Presenters may be asked by the scientific committee to act as a discussant for a related conference paper.
Venue: the Workshop will take place at University of Naples Federico II, Via Partenope, 36, Centro Congressi.
For information please go the following link:
2023, 30th of September: submission of papers for the Workshop
2023, 20th of October: paper acceptance
2023, 25th of October: registration deadline
2023, 10th of November: workshop
2024, 15th of February: deadline for submission to the special issue
2025, publication of the special issue