The Effect of Psychological Biases on External Auditor’s Professional Skepticism Overconfidence Bias, Anchoring Bias, and Availability Bias

الملخص

Despite their professional recognition, auditors’ failure to exercise an appropriate level of skepticism continues to be a global issue. This study aimed to prove potential psychological barriers and traps that lead to biases and skeptical behaviors. We examined the potential existence of three psychological biases in auditors’ professional skepticism in particular overconfidence, anchoring, and availability. The application of professional skepticism is also necessary for effective auditor decision-making." Indeed, the foundation of sound auditor decision-making is the right application of professional skepticism throughout the judgment process. To conduct our research, we designed a questionnaire containing thirty questions. The questionnaires were distributed to 300 public and private auditing institutes. In total, we could rely on 158. It has been found out that the three psychological biases can affect auditors’ professional skepticism. The existence of overconfidence bias will lead auditors to believe that they are doing a better job of auditing than they truly are. Show how auditors' anchoring bias exists. This bias leads to improper adjustment of auditors’ expectations, especially numerical ones. When auditors do not adjust their assessments and estimates sufficiently, they cannot exercise an appropriate level of professional skepticism when they perform. The results also show that availability bias exists among auditors. There is a relationship between the three psychological biases and auditors’ professional skepticism.